ABSTRACT

This study  investigates  the effect of microfinance  banks on the growth  and sustenance of selected small and medium  scale enterprises   (SMEs)  in Nigeria. The  study  centered  on  some  selected  microfinance   banks  and  small  and medium scale enterprises in Enugu State.  The objectives  were to find out the extent to which the present recession in Nigeria   has affected the provision of financial  services  by microfinance  banks,   to determine   the  level   at which nonfinancial   services   provided  by  MFBs    affect  SMEs   sustenance  and  to examine   the  influence   of financial  laws   on the  growth  and  sustenance  of SMEs.  The data collected  were both from primary  and secondary   sources. The   primary   source   were   from  the   questionnaire   administered   to  the respondents   and  received  while  the  secondary  data  were  obtained    from library  materials,   textbooks,  magazines,   and seminar papers  on the topic   of the study and the internet. The secondary data were used  for literature review. The  findings  from  the  research  established  that  the  present  recession    in Nigeria has  affected the provision of financial  services    by MFBs  which was in  line with Apriori  expectations  based on the responses  of the respondents. Nonfinancial     services   which   include    social     capital    development      and manpower  development  provided  by MFBs can have a significant  effect on the  performance   and  sustenance  of  SMEs.    Among  the  recommendations made by the researcher includes  the following;   SMEs are advised to identify other  sources  of  fund  other  than  that  given  by  MFBs  since  the  present recession  has  a significant  effect  on the provision  of financial   services  by MFBs to SMEs.  More so,  the government is advised to enact policies  that will enhance  the  growth  and performance  of SMEs  as these  policies   has  been shown  to significantly   affect the sustenance of SMEs.