PERCEPTION OF SMALL AND MEDIUM SCALE ENTERPRISES OPERATORS IN ABIA STATE, NIGERIA ON NIGERIAN INCENTIVE-BASED RISK SHARING SYSTEM FOR AGRICULTURAL LENDING (NIRSAL) BANK FINANCING ON ENTERPRISE DEVELOPMENT AMONG

Abstract

The study assessed perception of small and medium scale enterprise operators in Abia State, Nigeria on Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Bank financing on enterprise development. The study was guided by the following specific objectives; described the socio-economic characteristics of respondents, level of awareness of NIRSAL operations to enterprise development, level of perception of NIRSAL financing among SMEs, level of NIRSAL financing needs among SMEs operators, factors influencing NIRSAL financing needs and constraints to enterprise development and financing among SMEs operators. Data were collected through a structured questionnaire.  Simple random sampling technique was adopted in selecting ninety (90) respondents. Data were analyzed using statistic tools such as Percentages, Mean, Frequency tables, Regression model, Analysis of Variance (ANOVA). The results of the study revealed that majority of the respondents were male (51%), young (X=39yrs), single (56%) and educated (70%). In addition, majority (77%)) of the respondents were experienced in business, indicating that they had adequate practical knowledge to promote their functionality and financial prosperity for the development of their enterprises. The result revealed that respondents were aware of NIRSAL operations ( =2.33) and perceived NIRSAL bank financing as good with mean level of NIRSAL financing accessed as N 4, 800,000. The Ordinary Least Squares regression model showed that business experience (p<0.10), membership of cooperative(p<0.01) training from NIRSAL (p<0.05) and loan processing costs (p<0.01) were significant factors influencing NIRSAL financing needs among SMEs operators. Major constraints to enterprise development and financing among SMEs were non-price regulation, inadequate capital, multiple taxation and government regulation. The study therefore recommends that loans application and approval process at NIRSAL microfinance bank should be enhanced in order to increase outreach of financial services to SMEs.