Impact of Credit Accessibility of Small Businesses Profitability

Abstract

This study examined the impact of credit accessibility on profitability of small businesses. The impact of Legal formation, Age of firm, Industry and Reputation are assessed on the profitability of small businesses. This was with the view of examining the effect of credit accessibility on profitability among small businesses in Osun East Senatorial District (Ife/Ijesa). To achieve this, the study relied on primary data which was collected through structured questionnaire administered to 600 small businesses owners in Osun East Senatorial District (Ife/Ijesa) but only 580 were retrieved. The data was analyzed in accordance with the research objectives and hypotheses. In the course of the study it was found that majority of small businesses find it difficult to seek for credit facility from formal financial institutions only to resort to informal source of finance that attract high cost of interest and unsuitable lending policies that mob the profit of these just coming up businesses.The study conclude that Government of Nigeria are advised to look into financial distress of small businesses and enact policies that will ensure that this targeted business have access to short and medium terms credit and soft lending policies to encourage them to fulfill their objective of economic growth and industrialization through the Central Bank of Nigeria.