<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The study uses a market-oriented approach to investigate the relationship between the financial system and SMEs access to finance in Nigeria between 1995 and 2019. Both indicators from the capital and money markets are used as independent variables while some macroeconomic variables such as inflation rate, interest rate and exchange rate are also used. The study made use of Auto-Regressive Distributed Lag to explore the long and short-run relationship and the result shows that the capital market has a more significant impact on SMEs access to finance than the money market. Variables such as inflation rate, exchange rate and interest rate all have a significant influence on access to finance by the SMEs. it is recommended that the money market as an important aspect of the financial system in Nigeria should be made to devote more credit to the SMEs sector as it has shown from this study that the bulk of the credit going into the private sector from the money market might not go into the SMEs sector. The inflation rate should also be controlled as well as reducing the lending rate and guide against unreasonable currency devaluation to promote access to finance by the SMEs in Nigeria.</p>
</abstract>

The study uses a market-oriented approach to investigate the relationship between the financial system and SMEs access to finance in Nigeria between 1995 and 2019. Both indicators from the capital and money markets are used as independent variables while some macroeconomic variables such as inflation rate, interest rate and exchange rate are also used. The study made use of Auto-Regressive Distributed Lag to explore the long and short-run relationship and the result shows that the capital market has a more significant impact on SMEs access to finance than the money market. Variables such as inflation rate, exchange rate and interest rate all have a significant influence on access to finance by the SMEs. it is recommended that the money market as an important aspect of the financial system in Nigeria should be made to devote more credit to the SMEs sector as it has shown from this study that the bulk of the credit going into the private sector from the money market might not go into the SMEs sector. The inflation rate should also be controlled as well as reducing the lending rate and guide against unreasonable currency devaluation to promote access to finance by the SMEs in Nigeria.

Financial System and SMEs Access to Finance: A Market-Oriented Approach

Studia Universitatis „Vasile Goldis” Arad – Economics Series

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Financial System and SMEs Access to Finance: A Market-Oriented Approach"}

The study uses a market-oriented approach to investigate the relationship between the financial system and SMEs access to finance in Nigeria between 1995 and...

Financial System and SMEs Access to Finance: A Market-Oriented Approach

Published Online: Jul 23, 2021

Page range: 21 - 36

Received: Feb 01, 2021

Accepted: May 01, 2021

DOI: https://doi.org/10.2478/sues-2021-0012

Keywords
SMEs, Finance, Money market, Capital market

© 2021 Akinwande Ademosu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Financial System and SMEs Access to Finance: A Market-Oriented Approach

Published Online: Jul 23, 2021

Page range: 21 - 36

Received: Feb 01, 2021

Accepted: May 01, 2021

DOI: https://doi.org/10.2478/sues-2021-0012

KeywordsSMEs, Finance, Money market, Capital market

© 2021 Akinwande Ademosu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
SMEs, Finance, Money market, Capital market