EFFECTS OF MICRO-CREDIT ON SMALL-SCALE BUSINESS PERFORMANCE IN YEWA DIVISION OF OGUN STATE

This study examined the effects of micro-credit on small-scale business performance in Yewa Division of Ogun State. The study examined how micro- credit impact on the performance of Small Enterprises in Yewa Division of Ogun State, Nigeria. The specific objectives are to; describe the socio-economic characteristics of the respondents; examine the cost and return structure of the respondents; analyse the effects of credit available on the business performance of the micro-entrepreneurs; determine the factors affecting the credit size in the study area; and identify problems encountered by the entrepreneurs.  Descriptive statistics and econometrics (Tobit and multiple regression analysis) were employed as tools for the analysis. The investigated through the survey of 120 respondents which were randomly selected using multi-stage random sampling technique. Copies of well-structured questionnaire were administered to entrepreneurs sampled. Results showed that the average age of the respondents was 43 years and majority was female (about 66 percent). About 77 percent of the respondents were married with an average household size of 5. A very few number (3.3%) of the respondents had tertiary education.  The study also revealed that the average monthly income of the respondents that was N50,635.14. The Tobit analysis revealed that loan repayment period, family size years in business, and monthly income were the key determinants of business performance. On the other hand, volume of credit available to respondents is affected by repayment period, business experience, monthly income and interest on loan. Based on the findings and judging from the frequency ratings of the respondents, Bureaucracy of the lender, Education level, Afraid of default payment, and Unprofitable scale of operations are the major challenges facing the operation of entrepreneurship business. It was therefore recommended that: Micro entrepreneurs must try and source for loan from more than one source. This will lead to an increase in the volume of loan obtained and also increase in the proportion of loan used for business activities and the interest on loan should be reviewed in such a way that the end-users will be able to service the loan and also have some margin on the net returns