Microfinance Banks’ Credit and The Performance of Micro, Small, and Medium Scale Enterprises in Lagos State, Nigeria

Micro, Small, and Medium Enterprises (MSMEs) are economy-boosters in most countries across the globe. The availability of capital to MSMEs is crucial for growth and survival. This study investigates the relationship of Micro-Finance Banks’ (MFB) credit with the growth of MSMEs in Lagos state, Nigeria. Three hundred copies of structured questionnaires were administered to a purposively selected sample of MSMEs owners/managers that had accessed loans from MFBs in Lagos state. Two hundred and ninety copies of the research questionnaire were retrieved and analyzed with descriptive statistics and Pearson chi-square statistics. The results show that credit facilities from MFBs are not only positively related to the productivity of MSMEs but also significantly contribute to their expansion. Furthermore, the non-monetary services of MFBs are related to the growth of MSMEs. This study concludes that credit facilities from MFBs are positively related to the growth of MSMEs in Lagos State. The study recommends that funds should be made available to MSMEs at a business-friendly lending interest rate