Author ORCID Identifier

Date of Award

Spring 5-6-2022

Degree Type


Degree Name

Doctor of Business Administration (DBA)



First Advisor

Dr. Wesley Johnston

Second Advisor

Dr. Danny Bellenger

Third Advisor

Dr. Kofi Dadzie


Several researchers have studied the catalytic influence of small and medium enterprises (SMEs) on many countries' economies. Its underwhelming impact on the Nigerian economy has also attracted some attention. This research aims to examine the effect of the financial system on SMEs' access to financing and recommend changes to the financial system that will enhance SMEs' access to funding in Nigeria. Thus, the research adopted a mixed-method approach. The quantitative analysis section used 18 years of aggregate national data sourced from the Central Bank of Nigeria (CBN) to determine the relationship between the financial system, the channel of distribution (the financial institutions), and SME access using regression analysis. In addition, 1,590 SMEs registered with the Small and Medium Enterprises Agency of Nigeria (SMEDAN) in the three out of the six geographical zones of the country were surveyed based on density, spread, and randomization. The reliability and validity of the collected data were measured using exploratory Spearman rank correlation and Chi-square techniques. The qualitative analysis involved six semi-structured interviews with financial institution operators and regulators in Nigeria, using NVivo's thematic analytical tools to draw the relationships from the interviewees' perspectives. Metrics such as interest rate spread, bank concentration, bank overheads, credit to the private sector, information asymmetry, and risk perception were tested to establish the influence of the financial system on SMEs' access to funding. The key findings from the empirical evidence include the direct and significant effect of interest rate spread, number of bank branches, and credit to the private sector. SMEs' access to funding inhibiting factors includes business collaterals, high lending rates, and verifiable business financial information. At the same time, the promoters are the length of existence of the business, legal status, turnover or revenue, number of employees, and owners' characteristics. The study shows that policy guidance that provides credit registry, credit guarantee, insurance, movable asset registry, dedicated or re-focused SMEs lending institution, SME ranking will reasonably de-risk SMEs' risk assets portfolio and ameliorate credit rationing effect through the financial intermediation channel of distribution. In addition, financial institutions and SME owners can employ the findings to improve SMEs' risk assets quality and access to funding success, respectively. Consequently, this empirical work establishes the relevance of channel of distribution theory (Levine, 2005) and the effects of credit rationing (Yu & Fu, 2021) on SMEs' access to financing using the bank-based approach from the Nigerian perspective, and the emerging economies in general. The study incorporated the mediating role of financial institutions (Deposit Money Banks – DMBs and Non-Bank Financial Institutions – NBFIs) proxied by current and savings account balances and moderating role of credit rationing measured by borrowing interest rate. The application of this unique theoretical model and the resultant empirical integrated framework should potentially create a new domain of discussion for future researchers into SME funding in emerging markets.


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