Fuelling Entrepreneurial Productivity in Nigeria: The Contribution of Bank Loans.

Abstract:

The study examined the effect of bank loans on entrepreneurial productivity in Nigeria. Based on an ex-post facto research strategy, secondary data were gleaned from the bulletins of Central Bank of Nigeria and National Bureau of Statistics, covering the period from 2008 to 2022. Descriptive statistics was applied to summarize the key variables under study. In addition to the descriptive analysis conducted, Jarque-Bera test of normality, Breusch-Godfrey Serial Correlation LM Test, Harvey test of heteroskedasticity and Ramsey RESET test for linearity were conducted to assess the validity of the ordinary least square (OLS) regression used in hypotheses testing. The finding from the validated OLS estimates revealed that entrepreneurial productivity in Nigeria is significantly fueled by bank loans to small and medium scale enterprises (β = N115.16; p-value = 0.006672). In conclusion, banks play a pivotal role in enhancing the productivity of entrepreneurial ventures by facilitating easier access to credit. Therefore, we recommend that the government should implement policies that reduce barriers to credit for SMEs, such as lowering interest rates on loans and providing loan guarantees. This will help more entrepreneurs access the financing required to enhance their productivity.