Commercial Banks and Performance of Micro, Small and Medium Enterprises in Imo State, Nigeria

This study examined Commercial Banks and Performance of Micro, Small and Medium Enterprises in Imo State, Nigeria. The aim was to evaluate how commercial bank financing has influenced small-scale entrepreneurial development in Imo State using statistical analysis. The study used quantitative, ex post facto research design relying on secondary data. Data were sourced from Central Bank of Nigeria Statistical Bulletin, World Bank Data Base and the owner of the Micro, Small and Medium Enterprises. The study had commercial banks total loans and advances granted to SMEs in Imo State as independent variable while SME Contribution to Imo State GDP (%), SME Employment Generation (%) and SME Firm Survival Rate (%) were used as dependent variables. Descriptive Statistics, Pearson Correlation Analysis and Multiple Regression Analysis were used as data analysis methods. Descriptive analysis revealed that while bank lending to SMEs grew in absolute terms from ₦45.2 billion in 2014 to ₦70.2 billion in 2023, it remained less than 0.3% of total private-sector credit, highlighting a marginal share. Correlation and regression results confirmed that bank financing has a strong positive effect on SME contribution to GDP and a moderate effect on employment, but a weak and statistically insignificant effect on firm survival. This implies that while financing enhances SME growth and job creation, sustainability depends on broader factors such as infrastructure, inflation, and managerial skills. The study therefore concludes that financing is necessary but not sufficient for sustainable SME development, which requires a combination of credit access, supportive policies, and institutional capacity-building. The study recommend that Commercial banks should increase the share of credit allocated to SMEs and design flexible loan products tailored to their needs, while government should strengthen intervention funds and credit guarantee schemes to reduce bank risks.