Determinants of financial assistance and credit accessibility of Small and Medium Enterprises: A study of textile stores in Gombe metropolis

Abstract

This study examines the determinants of financial assistance on credit accessibility of Small and Medium Enterprises (SMEs), particularly textile stores within Gombe metropolis. The study aimed to determined how firm age, firm size, firm ownership structure, owner’s educational level and collateral influence credit accessibility of textile stores in Gombe metropolis. Quantitative research method was used and survey research design was employed to guide the study paradigm. The population of the study is 362 registered SMEs in the textile business. The sample size of 190 was arrived-at using Taro Yamane. A total of 210 questionnaires were distributed, 202 were retrieved but 193 were found valid for analyses. Statistical Package for Social Sciences version 23 was used to achieve descriptive statistics and other inferential statistics analyses. The findings shows that firm age and educational level have negative and significant effect on credit accessibility of the SMEs; ownership structure revealed a positive and significant effect on credit accessibility of the SMEs. While the findings of firm size show a positive but insignificant effect on SMEs access to finance. However, the result of collateral on credit accessibility reveals a positive but insignificant effect on the SMEs. Therefore, the study recommends that firms should invest in strategies that counterbalance the negative effects of ageing, such as innovation and adaptability; firms should also consider strengthening their ownership structure to have an improved business outcome; firms should balance educational qualifications with practical experience when hiring or training management teams. Finally, collateral is not a key driver of SMEs credit accessibility, so SMEs should focus on more impactful factors like good governance.