A look around us will reveal that that our economy consists of people whose material needs and wants are satisfied by numerous business organizaiton especially in the manufacturing sector we can comfortably count on the roster of business organizations both locally and internationally famous such as lever brothers Plc Nigeria bottling company (NBC) Plc Pfizer Plc UAC etc.

American writers have pointed out that the world view of the UAS as a “land of industrial grants” a national of big operation is misplaced of all manufacturing industries in USA 89% Employs fewer than 100 people and 65% have fewer than 20 employees.  In all developed and developing countries all over the world the greater proportion of their productive sector are mainly of small sizes. It then becomes imperative to point out that grant industries with their mass production not with standing it is the small scale industries not withstanding it is the small scale industries that from the backbone of every nations economy.

To some writers (Cofie, 2012; Ahiawodzi and Adade, 2014), the SMEs sector can do better with respect to its current contribution to GDP growth. Invariably, the sector can grow faster and better contribute to employment in Awka metropolis. These arguments are indirect ways of saying that the sector is not realizing its full potential logically as a result of some constraints. Ackah and Vuvor (2011) are among several writers who have acknowledged that some of these constraints are challenges faced by SMEs in having access to credit facilities from financial institutions ( banks, micro-finance firms, savings and loans companies among others), which are the sector’s financiers.

In the microfinance and SMEs literature, several challenges are identified as militating against access to credit facilities among SMEs. Some of these challenges are: SMEs lacking collateral security; poor records keeping; poor credit rating as a result of poor savings history , and stringent lending criteria used by financiers (Ackah and Vuvor, 2011; Cofie, 2012). The fact is

that small firms have been found to have less access to external finance and to be more constrained in their operation and growth (Galindo and Schiantarelli, 2003).

Small and Medium Enterprises (SMEs) are viewed as a key driver of economic and social development in the African context. They represent a large number of businesses in a country, generate much wealth and employment and are widely considered to be vital to a country’s competitiveness. SMEs are hailed for their pivotal role in promoting grassroots economic growth and equitable sustainable development (Pelham 2000). SMEs tend to be large in number, accounting for about 90 percent of all enterprises in many African countries and over 80 percent of new jobs in a given country (Reinecke, 2002).

In Awka metropolis, Nigeria the small business sector has both the potential and the historic task of bringing millions of people from the survivalist level including the informal economy to the mainstream economy. According to the last comprehensive survey conducted in 1999, the sector was estimated to employ over 50 percent of the working population (accounting for 2.3 million people). As much as majority of the SMEs in Nigeria operate informally, there are over 35,000 formal SMEs that employ over 40 percent of the working population.

Recognizing the critical role small businesses play in the Awka metropolis, Nigeria economy, the government through Nigeria Vision 2020 envisages the strengthening of SMEs to become the key industries of tomorrow by improving their productivity and innovation. However, it is generally recognized that SMEs face unique challenges, which affect their growth and profitability and hence, diminish their ability to contribute effectively to sustainable development. The International Finance Corporation (IFC) (2011) has identified various challenges faced by SMEs including lack of innovative capacity, lack of managerial training and that these and other challenges have been consistently found in researches conducted in both

developed and developing country contexts, making them strongly confirmed constraints faced by SMEs in the global SMEs industry. However, these challenges have been found in previous studies (Adjei, 2012; Cofie, 2012) only from the perspective of SMEs. Zairani and Zaimah (2013) are of the view that this situation is unwholesome and poses a major gap in the literature because some of the challenges faced by SMEs in accessing credit are best identified from the viewpoint of financiers. Thus they contend that a holistic framework of challenges associated with access to financial resources among SMEs in any jurisdiction comes from two sets of people: (1) employees of financial institutions; and (2) SMEs (i.e. SME owners and employees).

According to African Development Bank Group Report (2012) Small and Medium Enterprises are the best candidates to achieve inclusive growth in Africa as they contribute significantly to the income generation and joint creation. However, financial access is consistently reported as one of the major obstacles to SME’s growth and development. Only 20 percent of African SMEs have a line of credit from a financial institution. There has been a growing recognition of the importance of the role that Small and Medium Enterprises (SMEs) play in the economic development globally and Nigeria in Particular. Small and Medium Enterprises (MSEs) are lifeblood of most economies. To be successful in this and other business sectors, finance plays a major role. As far as SMEs are concerned as part of business enterprises, they need finance to start up, expand, diversify and for working capital of the business firms. Without finance, no one business enterprise can achieve its objectives. Finance is the backbone of SMEs and any other business enterprise (McKernan & Chen, 2005). Both in the developing and developed world experience, inadequate education and skills, technological change, poor infrastructure, scanty market information and lack of access to credit.

The catalytic roles of micro and cottage businesses have been displayed in many countries of the world such as Malaysia, Japan, South Korea, Zambia, and India among other countries. They contribute substantially to the Gross Domestic Production (GDP), export earnings and employment opportunities of these countries. SMEs have been widely acknowledged as the springboard for sustainable economic development (Osotimehin, Jegede, Akinlabi, & Olajide, 2012). Apart from the fact that it contributes to the increase in per capital income and output, it also creates employment opportunities, encourage the development of indigenous entrepreneurship, enhance regional economic balance through industrial dispersal and generally promote effective resource utilization that are considered to be critical in the area of engineering economic development (Oboh, 2004; Odeh, 2005).

In almost all economies of the world especially in developing countries in Africa, micro and small enterprises are crucial and are a key factor for sustained growth and development. SMEs play pivotal roles in creating dynamic, market oriented economic growth, employing the growing workforce in developing countries, alleviating poverty and promoting democratization.

Though, small business owners often have more information about the potential of their own businesses, in some situations it can be difficult for business owners to articulate and give detailed information about the business as the financiers want (Aryeetey et al., 1994). In addition, some small business managers tend to be restrictive when it comes to providing external financiers with detailed information about the core of the business since they believe that information about their business may leak through to the competitors (Winborg and Landstrom, 2009).

Lack of planning, improper financing and poor management have been reflected as the main cause of failure to small enterprises to obtain credit has been revealed by (Longenecker et al., 2006). This is yet to be evaluated in the context of a growing self-employment environment and SMEs platform such in Nigeria. Though shortage of credit facility has ever being identified as one of the most serious constraints, facing SMEs and hindering their development in Millennium Goals Reports. Hence, a necessity for this study.

The main objective of this study is to examine the challenges faced by SME’s in accessing credit in financial institutions of Awka metropolis. Others are:

i.             To determine the access to finance/Capital which represent the greatest problem confronting SMEs in Nigeria

ii.             To ascertain first hand, the opinions, feelings, and the pulse of some key SME operators as well as professionals in the SME sub-sector of the economy with respect to the unhealthy state of SMEs in Nigeria.

iii.             To assess the top three greatest problems facing SMEs in Nigeria Management, Access to Finance/Capital and infrastructure in descending order of intensity

In view of the consequence of SMEs in obtaining credit facilities from financial Institutions, it is necessary to formulate some research question which will enable the researcher prefer solution to the identified problems.

i.             What access of finance/capital does not represent the greatest problem confronting SMEs in Nigeria?

ii.             What management does not represent the greatest problem facing the manufacturing sub- sector of SMEs in Nigeria?

iii.             What are the problems faced by SME’s in Nigeria Management, Access to Finance/Capital and infrastructure in descending order of intensity?

In order to enable the researcher confirm the greatest drawback for SMEs in Awka metropolis, Nigeria and fully appreciate their respective relevant significance, he had to postulate the following hypotheses:

i.             H0: Access to finance/Capital has no significant relationship with the greatest problem confronting SMEs in Nigeria.

ii.             H0: Management has no significant relationship with the greatest problem facing the manufacturing sub-sector of SMEs in Nigeria.

The study will be significant to the policy makers-especially in the Ministry of Industry and Trade to understand the challenges and prospects of enhancing SMEs to accessibility to financial credit not only Nigeria.

Additionally, to other researchers, the study will be useful since it will add knowledge to other researchers intending to study about SMEs financial credit accessibility, their strategies and operations. To Small and Medium Scale Enterprises, the present research will build an understanding of the challenges and prospects of SMEs in regard to financial credit markets. This will provide them with a high range choices, opportunities and knowledge of the challenges that are being faced by business entrepreneurs, especially the small and medium enterprises.

The current study provides a way forward on how SMEs should be able to adapt themselves across changes in Nigeria and Global arena in this era of competitive business and economy. Furthermore the study germinates a clear view for researchers in the future to have a background for them to extend towards new frontiers of the study for the future-best of SMEs growth and operations.

Critical policy issues will benefit the current and future government and policy makers in understanding the challenges and needed solution for SMEs to serve socio-economic issues. To other sectors of the economy, a better understanding of SMEs and financial credit operations provide a chance for stakeholders and other sectors to utilize resources more rationally through linking the sectors of the economy efficiently. Awka metropolis, Nigeria needs SMEs for a common man livelihood and also linkage in the sectors development SMEs perspectives need to be understood clearly.

The outcome of this study will be a little guide for the SME’s on how to overcome the problem of accessing credits from financial institutions.

The research will also serve as a source base to other scholars and researchers interested in carrying out further research in this field in future. The study therefore will extend the frontiers of the existing literature by emphasizing the challenges inhibiting SME’s in accessing credit from the financial institutions in Nigeria.

The study focused on the study of challenges inhibits SMEs in accessing credit in financial institution in Awka metropolis, Nigeria which was used for the researcher’s analysis. All references therefore relate to Awka metropoliss financial institutions in Nigeria. The structured questionnaire will

be sampled in three (3) selected companies of SME’s in which One hundred and twenty (120) respondents will be administered. The collected samples will be analyzed with statistical package; secondary sources will also be used for review of related literature.

Various bodies, organizations and institutions have defined SMEs differently depending upon their purpose, objective and use.

For this research, the following definitions have been adopted:

i.             Micro Enterprise: A firm, whose total cost including working capital but excluding cost of land is not more than ten million naira (N10,000,000) and/or with a labour size of not more than thirty (30) full-time workers and/or a turnover of less than two million naira (N2,000,000) only.

ii.             Small Enterprise: An enterprise whose total cost including working capital but excluding cost of land is between ten million naira (N10,000,000) and one hundred million naira (N100,000,000) and/or a workforce between eleven (11) and seventy (70) full-time staff and/or with a turnover of not more than ten million naira (N10,000,000) in a year.

iii.             Medium Enterprise: A company with total cost including working capital but excluding cost of land of more than one hundred million naira (N100, 000,000) but less than three hundred million naira (N300, 000,000) and/or a staff strength of between seventy-one

(71) and two hundred (200) full-time workers and/or with an annual turnover of not more than twenty million naira (N20, 000,000) only.

iv.             Large Enterprise: Any enterprise whose total cost including working capital but excluding cost of land is above three hundred million naira (N300,000,000) and/or a

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