Pages: (77-97 )
Abstract
Microfinance institutions were established to support the Mgrowth of Micro, Small and Medium Enterprises (MSMEs) in Nigeria, however, no significant progress has been recorded over the years as regards their financial contributions to MSMEs.This study examined the contributions of Microfinance Institutions on the growth of selected MSMEs in Ondo State. The study examined the collateral possessed by MSMEs access to finance, and the number of MSMEs that have benefitted from microfinance loans towards establishing the relationship between microfinance institutions and MSMEsgrowth.The study employed survey research design with the collection of primary data through the administration of structured questionnaire on a sample size of two hundred and eighty six (286) from a total population of one thousand and twenty seven (1,027) registeredMSMEs in Ondo State. Hypotheses were tested to establish whether there is a significant relationship between available collateral and access to finance to support growth and to find the relationship between Microfinance Institution and enterprise growth. Data collected were analysed by employing descriptive and inferential statistics. Correlation result revealed a positive correlation coefficient of (r= 0.714) between collateral and access to finance while the p-value was less than 0.01 level of significantthus, rejecting the null hypothesis one.There was also a positive relationship between the independent variable (microfinance institutions) and the dependent variable (MSMEs growth) with (r= 0.682) at the significant level of 0.05 and the second null hypothesis was also rejected. Policy recommendations were made based on the findings emanated from the study
Keywords: Growth, Microfinance institutions, Finance, MSMEs, Nigeria,