1. INTRODUCTION

The small and medium Enterprises have long been recognized the world over as the key driver of economic growth and development. This is because SMEs have provided the mechanism for stimulating indigenous enterprise in many countries by creating employment opportunities, training entrepreneurs, generating income, aiding the development of local technology and providing a source of livelihood for the majority of low-income households which enhances pro-poor economic growth in many countries. Having globally acknowledged, SMEs is required to lubricate the engine of socio-economic transformation of developing nations’ economies by improving per capita income, export earnings and stepping up of capacity utilization in key industries ( Obasan and Arikewuyo, 2012). With the Nigeria’s quest to grow the economy, the sustained growth of the SME sub-sector is even more germane. Thus, in contributing meaningfully to inclusive economic growth, access to finance SME has become critical, especially as they rely on Deposit Money Banks and other financial institutions to raise funds for investment. Deposit money banks, also known as commercial banks, are financial institutions that provide services, such as accepting deposits, giving business loans, mortgage lending, as well as channelling of funds from surplus to deficit units for even development of the economy (Uzonwanne, 2015).  The financial system of Nigeria is largely dominated by the banking sector, especially the deposit money bank which provides the bedrock for economic growth. Their credit component constitutes a major link between the monetary and the real sectors of the Nigerian economy, and their role is seen by many financial experts as a catalyst for economic growth and development.

1. STATEMENT OF THE PROBLEM

Over the years, the government of Nigeria at different levels have in one way or the other involved in the financing and development of Small and Medium-scale Enterprises (SMEs) through establishment of SMEs enhanced-financing institutions. These include the Nigerian Industrial Development Bank (1962), Small Scale Industries Credit Scheme (1971), the Nigerian Bank for Commerce and Industry (1973), the Mandatory Bank’s Credit Allocation to SMEs Scheme (1992) and the Bank of Industry established in 2001. Furthermore, the Central Bank of Nigeria also intervened by establishing several schemes for SMEs financing such as, the Refinancing and Rediscounting Facility, N200 Billion Restructuring/Refinancing Scheme,  N200 Billion Commercial Agricultural Credit Scheme (2009) and of recent, establishment of N200 billion Small and Medium-scale Enterprises Credit Guarantee Scheme (SMECGS) in 2010. Besides government and the CBN, other private institutions in Nigeria also came up with SMEs’ credit support schemes, one of such was the Small and Medium Enterprises Equity Investment Scheme (SMEEIS) established in 2001 largely by the contributions of Bankers’ Committee. Commercial banks in the country were mandated by CBN to drive and allocate credit facilities of the above named institutions to SMEs’ beneficiaries for the advancement of economic growth. However, there is general believe that loans from banks are not enough to promote SMEs sub-sector. This triggered some scholars to dig deep to unravel the truth, one of such was a survey conducted recently by (Mordi, Anyanwu, Adebusuyi, Odey, Amoo, Mbutor, Adebayo, Akpan, Igue, Ibeagha, Belonwu, Zimboh in 2014) which revealed that commercial banks loans to private sector businesses which SMEs is one of them, have not yielded the much-desired result needed to drive the sub-sector to actualize its objectives. In the same vein, Sagagi, (2006) in his study noted that there is a negative relationship between amount of total credit given out by the lenders institutions to private businesses and the actual amount allocated to SMEs. This is one of the reasons SMEs is said to have contributed minimally to GDP even when the nation’s GDP had increased to a tune of $509.9billion as at 2014 (CBN, 2014).