The Impacts of Interest Rate Fluctuations on the Growth of Small and Medium Enterprises (SMEs) In Accra

Kisseih, Kwame Godsway

doi:10.6007/ijarafms/v7-i2/2788

Cited by 3 publications

(4 citation statements)

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“…Ordinarily, the financial capacity and volume of assets, as well as turnover rate, influence the volume of loans that commercial banks are willing to lend to an enterprise . In addition, the size and profitability of a firm dramatically determine the volume of loan that is accessible (Cernat et al, 2014;Kisseih, 2017), and a well-developed financial system is capable of attracting substantial trade inflows (Baliamoune-Lutz & Ndikumana, 2007). Therefore, the assumption is that firms that can access more loans will ordinarily have a reasonable turnover rate and asset base.…”

Section: Model Specificationmentioning

confidence: 99%

The effect of trade liberalization on SMEs performance in Nigeria

Olagunju

Olakanmi

Osakede

2023

Problems and Perspectives in Management

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Small and medium enterprises (SMEs) are vital for achieving sustainable development. However, it remains unclear whether engagement in international trade-oriented policies improves SMEs operations, particularly in Africa, where concluded arrangements are made to partake in the African Continental Free Trade Agreement (AfCFTA). This study examined the role of trade liberalization on SMEs performance in Nigeria using the Central Bank of Nigeria’s statistical bulletin and the World Development Indicators from 1981 to 2019. The ARDL model showed that a 1% rise in trade openness improves SMEs performance by approximately 2% but only in the short run. For the control variables, a 1% increase in labor force participation reduced SMEs performance by about 6% in the short run and increased it by approximately 9% in the long run. The results also showed that a 1% rise in gross fixed capital formation in the short run reduced SMEs performance by approximately 5%. The results showed an inconclusive short-run effect of the exchange rate and taxes on SMEs performance. With a 1% increase in the exchange rate, SMEs performance improved by approximately 0.04% in the long run. Similarly, a 1% increase in taxes improves SMEs performance by approximately 2.90% in the long run. Findings suggest a positive effect of trade liberalization on SMEs performance and support the operation of AfCFTA in achieving sustainable development. Policy efforts should focus on productive investment strategies and using locally sourced inputs to raise the competitiveness of SMEs.

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Section: Model Specificationmentioning

confidence: 99%

The effect of trade liberalization on SMEs performance in Nigeria

Olagunju

Olakanmi

Osakede

2023

Problems and Perspectives in Management

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“…Berdasarkan informasi pada (tabel 5 dan 6) menunjukkan bahwa hasil yang sama dimana baik pinjaman modal yang direalisasikan oleh bank umum dan suku bunga mempengaruhi pada perkembangan UMKM di Indonesia. Hasil ini sesuai dengan penelitian yang dilakukan oleh (Kisseih, 2017) dimana pinjaman dapat menggairahkan pelaku usaha dalam menjalankan usahanya. Oleh sebab itu, dengan adanya pinjaman modal, pelaku UMKM dapat mengembangkan usahanya dan menjadikannya dalam wujud alat, bahan dan jasa, dan tenaga kerja sebagai bagian dari produksi dalam memperoleh keuntungan (Amonoo et al, 2003;Eça et al, 2022).…”

Section: Pembahasanunclassified

“…Lebih lanjut informasi pada (tabel 5 dan 6) juga menunjukkan bahwa suku bunga memberikan pengaruh yang negatif pada perkembangan UMKM di Indonesia. Hasil ini sesuai dengan penelitian yang dilakukan oleh (Kisseih, 2017dan (Thabet et al, 2021 yang menyatakan bahwa suku bunga yang diberikan oleh pihak perbankan sangat memberatkan bagi pelaku usaha dalam mengembangkan usaha yang dijalankannya. Hal ini menunjukkan bahwa pelaku usaha menganggap dengan adanya suku bunga maka pengembalian pada pihak bank umum akan menjadi beban.…”

Section: Pembahasanunclassified

Peranan Pinjaman Modal yang Diberikan oleh Bank Umum pada Perkembangan Usaha Mikro Kecil dan Menengah di Indonesia Selama Pandemi Covid-19

Rediyono

2023

j. manaj. STIE. Muhammadiyah. Palopo

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Beginning in 2020 until now, all countries are experiencing the COVID-19 pandemic, which has made the economy enter a crisis phase, and Indonesia is no exception. At the start of the pandemic, the Indonesian economy experienced its lowest phase since the 1998 monetary crisis. All economic sectors experienced an extraordinary impact from the pandemic, including the micro, small, and medium enterprises sector. Seeing that the auxiliary sector during the 1998 financial crisis was declining, the government issued a policy of providing low-interest loan capital for micro, small, and medium enterprises. This policy yielded results with an increase in business actors in the micro, small, and medium sectors. Seeing these developments, this research wants to see how the role of capital loans and loan interest can develop micro, small, and medium enterprises every month from 2020 to July 2022. Using the autoregressive distributed lag (ARDL) method, this study finds that both in the short term and in the long term, providing capital will increase the number of micro small and medium enterprises. Conversely, interest rates actually have a negative effect because of the imposition of returns by business actors.

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“…Another constraint might also be the bank lending rate. A research carried out by Kisseih (2017) on the impact of interest rate on SMEs growth showed a relationship between SMEs assess to finance and lending interest rate such that the affinity to assess finance was dependent on the lending interest rate, where a high interest rate will discourage the SME from assessing the available loans thereby impacting negatively on the SME output. Government infrastructural financing is another factor that can improve on SMEs output.…”

Section: Introductionmentioning

confidence: 99%

Does small and medium scale enterprises output drive economic growth in Nigeria?

Edijala, Eloho Oghenekome,

Uchebenu, Ikechukwu,

Obi Callistar Kidochukwu

2024

Int. j. adv. economics

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Small and medium scale enterprises (SME) have been identified as major player in the economic growth of countries around the world through their productivity. This study investigated the possibility of the SME output driving economic growth in Nigeria. Using the time series data of the variables; Gross domestic product growth rate (GDPGR), output of SME (OPSME), loans from commercial banks to SME (LCBSME), cost of lending (COL) and Government capital expenditure on infrastructure (GCEI), extracted from the World Bank development indicators (WDI) and the relevant CBN statistical bulletins, the study applied the Autoregressive distributed lag (ARDL) bounds testing and Error correction model (ECM) to establish a relationship among the variables. The stationarity of the variables was established using the augmented Dickey Fuller (ADF) unit root test. The study revealed that the lagged values of the loans given by the commercial banks to the SME as well as the cost of lending were statistically significant in explaining economic growth which SMEs output is not statistically significant. The study also showed negativity on the lagged value on commercial bank loans to the SME implying that the previous loans are not sufficient and effective enough to drive growth in Nigeria. The positive coefficient of SMEs output implies that it impacts growth positively. Hence, we conclude that SMEs output drives economic growth in Nigeria, although its impact is insignificant. It was recommended that government should empower SMEs related agencies to grant loans to SMEs at a much reduced interest rate or cost of loan. SMEDAN and other institutions should sensitize the SME in the informal sector on the need to register with government so as to benefit from other source of finance regardless of commercial banks. Keywords: Economic Growth, SMEs, Business, Nigreria.

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The Impacts of Interest Rate Fluctuations on the Growth of Small and Medium Enterprises (SMEs) In Accra

Cited by 3 publications

References 0 publications

The effect of trade liberalization on SMEs performance in Nigeria

The effect of trade liberalization on SMEs performance in Nigeria

Peranan Pinjaman Modal yang Diberikan oleh Bank Umum pada Perkembangan Usaha Mikro Kecil dan Menengah di Indonesia Selama Pandemi Covid-19

Does small and medium scale enterprises output drive economic growth in Nigeria?

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