THE ROLE OF COMMERCIAL BANKS IN FINANCING SMALL AND MEDIUM SCALE ENTERPRISES (SMEs) IN BENIN.

ABSTRACT

The study examined “the role ofCommercial Banks in financing Small and medium Scale Enterprises (SMEs) in Benin.” It sought to: determine how SMIEIS enhances SME's access to the capital market; ascertain how SMIEIS has affected the financing of SME's; and investigate the extent to which SMIEIS has stimulated activities in the SMEs sub-sector. The survey research design was adopted. The population of the study consisted of three selected Small and Medium Enterprises in Benin metropolis. Double stage sampling technique was used and research data were analysed using descriptive and inferential statistics. Descriptive statistics used were frequency tables, and percentages, while the Chi-Square test served as the inferential statistic. The research findings were:There is a significant relationship between the Small and Medium Industry Equity Investment Scheme (SMIEIS) and SME's access to the capital market; there is a significant relationship between the Small and Medium Industry Equity Investment Scheme (SMIEIS) and SME's financing; and there is a significant relationship between the Small and Medium Industry Equity Investment Scheme (SMIEIS) and the stimulation ofthe activities of SME's.In view of the problem definition and research findings, the need for policy makers and bank regulatory authorities formulate policies to strengthen the SMIEIS to continue to support the SMEs and thus enhance the chances of leveraging the benefits accruable to the economy form a vibrant SME sector were suggested, among others.