Effect of Microcredit Availability on the Performance of Micro Enterprises in Abia State, Nigeria

Abstract

The study assessed the effect of microcredit availability on the performance of micro enterprises in Abia State, Nigeria. The study’s objectives were; determine the socioeconomic characteristics of respondents, determine the level of credit availability to microenterprises, determine the factors influencing the level of credit availability, and determine the effect of credit availability on microenterprise performance. The study adopted a proportionate sampling technique in selecting 90 micro entrepreneurs. Primary data were collected from the respondents using a structured questionnaire. Data collected were analyzed using simple descriptive statistics such as means, percentages, frequency distributions, OLS Regression, Analysis of Variance (ANOVA). The study found that 99.6% of respondents, regardless of access to microcredit, were primarily involved in food-based microenterprises. Most were educated, married, experienced, and part of cooperative societies, but only 42% had access to credit, possibly due to compliance with credit terms and the viability of their businesses. A positive and significant relationship was identified between credit availability and microenterprise performance, with 70% of respondents having the socioeconomic characteristics suitable for microcredit. Membership in cooperatives also aided access to credit. The study recommended prioritizing individuals with the necessary qualifications in credit programs to enhance microcredit utilization and support microenterprise development and sustainability

Key Words: Microcredit, Availability, Performance, Micro Agro-enterprises