MICRO CREDIT INSTITUTIONS AND THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMEs): A STUDY OF POULTRY FARMERS IN KUJE, ABUJA, FCT

Despite the increasing importance of SMEs in industrial development, access to finance has remained one of the major challenges facing them, especially in less developed countries. This therefore calls for the study of the impact of microcredit on the performance of Small and Medium Enterprises among poultry farmers in Kuje Area Council, Abuja, Nigeria. This research seeks to evaluate how microcredit institution services influence the performance of SMEs in the poultry farming industry. This study is supported by the Pecking Order Theory, postulating that "firms prefer internal finance over external options due to the potential costs associated with and expected ramifications from external finance, including threats to firm stability.". The study adopted a cross-sectional survey design and sampled 282 respondents from 952 targeted poultry farmers in Kuje Area Council, Abuja using structured questionnaires. Data analysis was done using descriptive statistics, regression analysis, and correlation tests. From the analysis done, it was found that all the independent variables significantly influenced SME performance. Microcredit had a positive and significant effect on SME performance (B = 0.273, β = 0.289, t = 7.820, p < 0.001), indicating that increased access to microcredit loans enhances business operations. Micro savings showed a strong positive relationship with performance (B = 0.573, β = 0.499, t = 11.396, p < 0.001), demonstrating that savings programs contribute significantly to business sustainability. In fact, entrepreneurial education and training further enhanced SME performance at B = 0.199, β = 0.210, t = 5.109, p < 0.001, to further press that skills development is important in managing the business. This regression model was highly explanatory, given that R² = 0.921 and the adjusted R² = 0.920, meaning the model explained more than 92% of the variance in SME performance. The study concludes by noting that credit facilities, especially loans, training, and savings, have a vital role in increasing the performance of SMEs in the poultry industry in Kuje. Thus, the findings call for concentrated microcredit policies and programs on access to finance with capacity building for SME operators. It is therefore recommended that microfinance institutions in Nigeria should further increase their loan offerings, training programs, and promote savings schemes for SME growth and economic development.