Access to Formal Credit and Enterprise Performance in Nigeria: A Gender Perspective

Argumenta Oeconomica, Vol. 36(1), p. 191-224, 2016

Posted: 19 Dec 2016

See all articles by Emmanuel O. Nwosu

Emmanuel O. Nwosu

University of Nigeria - Department of Economics

Anthony Orji

University of Nigeria - Department of Economics

Date Written: 2016

Abstract

The main focus of this study is to ascertain the impact of access to formal credit on enterprise performance. The study uses Nigerian Enterprise Surveys data for 2010 to construct a direct measure of credit constraint. From propensity score estimations, the results show that access to formal credit matters and has a significant impact on enterprise performance indicators. Firms that are credit constrained have significantly lower output per worker, capital per worker, employment of labour and investment in fixed assets for expansion compared to firms that are not credit constrained. This is more pronounced for women-owned enterprises after adjusting for bias in the estimations and controlling for sampling weights. This suggests that one way to support the growth of enterprises in Nigeria is to make access to formal credit less stringent. Also, government and monetary authorities should support credit expansion policies for medium and small enterprises in Nigeria.

Keywords: Entrepreneurs, Gender, Credit, Constraint, Access, Performance, Propensity Score Matching

JEL Classification: O16, O17, P27

Suggested Citation

Nwosu, Emmanuel O. and Orji, Anthony, Access to Formal Credit and Enterprise Performance in Nigeria: A Gender Perspective (2016). Argumenta Oeconomica, Vol. 36(1), p. 191-224, 2016, Available at SSRN: https://ssrn.com/abstract=2886912

Emmanuel O. Nwosu (Contact Author)

University of Nigeria - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Enugu, 4100002
Nigeria

HOME PAGE: http://www.unn.edu.ng

Anthony Orji

University of Nigeria - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Nsukka, Enugu State 4100002
Nigeria

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