ABSTRACT

The study examined the influence of debt financing options on financial performance of manufacturing firms in Nigeria. The study specifically examined the effect of; short-term debt, long-term debt and debt financing on financial performance of microfinance institutions in Abia State, Nigeria. Data for the study were sourced through the use of annual reports of the sampled micro finance banks. The collected data were analysed using multiple regression analysis. Result of the analysis revealed that Short-term debt has significant effect on financial performance of microfinance institutions in Abia State, Nigeria. Long-term debt has significant effect on financial performance of microfinance institutions in Abia State, Nigeria. It was also observed that high interest costs, adverse credit rating and Cash flow difficulties are challenges of debt financing facing microfinance institutions in Abia State, Nigeria. based on the findings, the researcher recommended that there is need to establish the external debt structure modification, the borrowing decision and planning in order to raise the funds, government policy should maintain according to debt management goals. As we know that the financial performance is dependent on investments in form of increasing assets for the new generation of Nigerian because from our study the hypothesis is proved, and it is creating value in the financial performance ultimately in economic development.