Microfinance Banks Credit and the Performance of Small and Medium Scale Enterprises (SMEs) in Rivers State

This study examined the impact of microfinance banks credit on the performance of small and medium scale enterprises (SMEs) in Rivers State. The study adopted survey research design. The population of five hundred and eighty (580) registered small and medium scale enterprises in Port Harcourt Local Government Arae of Rivers State. Using Taro Yamane formula, the study sample size consisted of two hundred and thirty-seven (237) small and medium scale enterprises in Port Harcourt Local Government Arae of Rivers State while stratified sampling technique and simple random sampling technique were used to select the sample. The study made use of primary data and structured questionnaire as the data collection instrument. Descriptive statistical techniques (frequencies, simple percentages, tables, charts, mean scores) were used to analyse the demographic data of the respondents and the research questions while regression analysis technique was used to test the hypotheses at 95% level of confidence (0.05 significant level). The data analysis was based on 220 valid questionnaires returned. The key findings of the study showed that microfinance banks credit has a positive and significant impact on the output, profitability, business expansion, liquidity and market share of small and medium scale enterprises (SMEs) in Rivers State. Based on the findings, the study therefore concluded that microfinance banks credit has a positive and significant impact on the performance of small and medium scale enterprises (SMEs) in Rivers State. It was recommended among others that government should incentivize microfinance banks through tax rebates for maintaining a certain percentage of their loan portfolio for small and medium scale enterprises (SMEs). This will enhance credit flow, enabling small and medium scale enterprises (SMEs) to boost production and profitability.