Nneka Maris Chidiebere-Mark, Nicolas Oguoma, Robert Ugochukwu Onyeneke, Ada Henri-Ukoha
Abstract
This study evaluated the performance of small and medium-scale agro-based enterprises financed by selected commercial banks in
Imo State, Nigeria. It identified the dominant agro-based enterprises in the study area; estimated the adequacy of funds disbursed
to them by selected commercial banks; determined factors that influenced the disbursements and the relative risk in financing them.
A combination of purposive and random sampling techniques was adopted in selecting the respondents (commercial banks and
small scale and medium scale agro-based enterprises) for the study. Questionnaire and interview schedule were the main tools for
data collection and data collected were analyzed using descriptive and econometric tools. The result showed that the mean amount
disbursed to small-scale agro-based enterprises was N533, 833.33 ($3558.89) while a mean of N1, 813,021 ($12086.81) was
disbursed to the medium scale enterprises. The multiple regression coefficient for interest rate (X3), experience (X4) and repayment
rate(X6) were positive and significant at 1% while category of enterprise (X5) was negative and significant at 5% implying that
these variables are important factors influencing the amount of loan disbursed to small-scale agro-based enterprises in Imo State
while interests rate (X3) and repayment rate (X6) were positive and significant at 1% ; coefficient for age (X2), experience (X4)
and category of enterprise (X5) were negative and significant at 5%, implying that these variables are important factors influencing
the amount of loan disbursed to medium scale agro-based enterprises in the study area. The risk in financing medium-scale agrobased
enterprises was higher than that for the small-scale agro-based enterprises. The main constraints faced by agro-based SMEs
in obtaining loans were mainly insufficient collateral (100%), and high interest rate (87.45%). It is therefore recommended that
commercial banks should make more credit accessible to agro-based SMEs and at better conditions and cheaper lending rate to
encourage their increased production and expansion.
Key words:
Factors influencing; small & medium-scale enterprises; agro-based; commercial banks; imo state; Nigeria.