Financial schemes to boost small and medium sized enterprises. Sources of finance by the Nigerian government: A commentary

This paper draws on documentary evidence to examine the various schemes implemented by the Nigerian government through the Central Bank of Nigeria (CBN) to alleviate the challenges of access to finance by small and medium sized enterprises (SMEs) in Nigeria. The authors employ this commentary and inductive argument to evaluate how well the special financial institutions that were set up before and after the implementation of financial market liberalization policy have been able to achieve their objectives. Evidence suggests that most SMEs still struggle with access to finance. These SMEs do not only face banks stringent conditions as obstacles to loans procurement, but also high interest rate charges of commercial banks currently between 23-26%. The special financial institutions set by the government as a result of the schemes to help finance the SMEs sector, appears to have performed below expectation due to inadequate funding, misallocation of their limited resources, poor staffing and overlapping functions of the institutions.