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ABSTRACT
Following the implementation of the structural Adjustment Programme from 1986, the country has witnessed the introduction of a number of reforms in the financial sector. The outcome of the reforms measures has not been without some unwanted effects, some heavily taking their toll on SMEs. The experience of Nigeria’s financial sector reforms required more investigation in view of problems that have trailed the process. In the wake of the liberalization, the economy has suffered excessive increase in interest rates, wide-spread bankruptcies and collapse of SMEs, rising rates of inflation and unstable exchange rate of the Naira. The instability in the exchange rate of the naira coupled with the high rate of interest rates and inflation have had adverse implications on SMEs. This Project work examines the impact of CBN reforms towards financing small and medium scale enterprises in Nigeria. The objectives of this study are to examine: the extent to which CBN reforms influences the financing of small and medium scale enterprises in Nigeria; the extent to which financing of small and medium scale enterprises affect their productivity in Nigeria. Data was obtained from the CBN statistical bulletin. The method of data analysis is the co-integration of statistical technique. From the findings, it was discovered that: there is a significant relationship between CBN reforms and the financing of small and medium scale enterprises in Nigeria; there is a significant relationship between CBN reforms and bank size in financing small and medium scale enterprises in Nigeria and there is a significant relationship between SMEs financing and output of SMEs in Nigeria. Therefore, it is recommended that: for the SMEs to be able to play its vital role in the development process as the engine of growth and development in the economy, the government should provide basic infrastructural facilities such as electricity, good roads, water supply, security and create stable macroeconomic environment for SMEs to operate; there is need for adequate publicity and information with respect to the existence of agencies and programmes which target SMEs development; Entrepreneurs should be encouraged to participate actively in capacity building workshops and training to improve their managerial capability; government should extend credit guarantee scheme for agriculture under the agricultural Credit Guarantee scheme (ACGS) to cover SMEs as this will reduce the risks being faced by banks in availing finance to SMEs and geared them towards improving credit ratio to the sub-sector; there is need to evolve other means of financing SMEs and the Central Bank of Nigeria and the Federal Government should exercise close monitoring of Commercial Banks to ensure that the intervention fund released for SMEs sector are strictly utilized by those entrepreneurs practically in the sector.
