Effect Of Capital Structure Of Small And Medium-Scale Agro-Enterprises On Access To Microfinance Bank Credit In Surulere Local Government Area, Ogbomoso, Oyo State, Nigeria

This study examines the effect of capital structure on the access of small and medium-sized agro-enterprises (SMAEs) to microfinance bank credit in the Surulere Local Government Area, Ogbomoso, Oyo State, Nigeria.SMAEs are vital for food security, employment, and rural development but often face challenges in securing credit due to their capital structure.Specifically, the study explores the relationship between debt-equity ratio, financial performance, and access to credit.A total of 80 respondents were surveyed using stratified sampling, with both descriptive and inferential statistics applied.Regression analysis revealed that education level and household size negatively impacted profit, while savings had a positive effect.Additionally, a higher debt-equity ratio was associated with increased credit access.The major challenges identified by the respondents include high interest rates, stringent collateral requirements, long processing times, limited loan amounts, and lack of financial documentation.The findings suggest that adopting strategies to improve the return on investment, such as strategic marketing to increase sales and treating agro-enterprises as serious business ventures rather than side occupations, can improve access to credit.Overall, capital structure plays a significant role in determining the creditworthiness of SMAEs, influencing their ability to secure financial resources for growth and sustainability.