Assessing the Impact of Bank Credit Accessibility on the Performance of Small and Medium Enterprises in Osun State, Nigeria

This study assessed the impact of bank credit accessibility on the performance of Small and Medium Enterprises (SMEs) in Osun State, Nigeria. SMEs are critical to economic development, yet their growth is constrained by limited access to formal credit. A descriptive survey research design was adopted, with data collected from 400 SME owners and managers selected through stratified random sampling across major commercial areas in Osun State. A structured questionnaire measured variables on a five-point Likert scale, while data were analyzed using descriptive statistics and multiple regression analysis at a 5% significance level. Findings revealed that bank credit accessibility significantly influences SME performance, particularly in terms of profitability, productivity, and business expansion. Descriptive results showed a high level of agreement that credit access enhances production capacity (mean = 3.68) and business expansion (mean = 3.98), while high interest rates (mean = 3.83) and collateral requirements (mean = 3.95) were major constraints. The regression analysis indicated that credit accessibility variables jointly explained 55.1% of the variation in SME performance (R² = 0.551), and the model was statistically significant (F = 78.420, p < 0.001). Collateral requirements, loan accessibility, and repayment flexibility were the strongest predictors of SME performance. The Durbin-Watson statistic of 1.912 confirmed model reliability. The study concludes that while bank credit significantly enhances SME performance in Osun State, restrictive lending conditions continue to limit its effectiveness. It recommends simplified loan procedures, reduced collateral requirements, improved financial literacy, and expanded credit guarantee schemes to strengthen SME financing and promote sustainable economic growth.