Factors influencing credit access to small scale enterprises in the wake of Covid-19 pandemic in Nigeria

Abstract

Credit is an important tool that improves economic activities and it is essential to support and enhance its accessibility to SEs. This study examines the factors that determine credit access as well as improving the life quality of SEs in the wake of COVID-19 pandemic. Using survey data collected from 366 SEs in Kano metropolis from September to December 2020, both logit and ordered logit models are applied in the analysis using a stratified sampling technique. The result of logit regression in the first analysis reveals that both age and assets are positive and significant in determining credit access while the remaining variables are positive except education. In the second analysis, the result of ordered logit model shows that collateral, credit source, gender and interest are statistically significant in improving the quality life of SEs. The study recommends that policies and programs should be designed to reduce collateral requirement and disabuse misconception about women in credit lending. It should reduce the percentage of interest rate charged on credit loan to enhance credit market participation, thus improving SEs’ life quality after the pandemic in Nigeria.