Challenges faced by small and medium enterprises (SMEs) in accessing credit facility from commercial banks: the case of NMB Plc.

This study on challenges faced by Small and Medium Enterprises (SMEs) in accessing credit facility from commercial banks was taken to find out factors, which challenge SME in accessing credit facility and also to identify remedial measures. The study focused on challenges facing SMEs in accessing credit facility from commercial banks with specific reference to the National Microfinance Bank Plc. The specific objectives of the study were to establish the extent to which a capacity to prepare business plan, borrowing process, collateral and interest rate affect borrowing capacity of the SMEs. A total of 100 respondents were selected. The study employed both secondary and primacy data collection methods. Both qualitative and quantitative tools of analysis were employed to analyze data. The responses of the participants were analyzed using computer based program MS Excel. The results show that among the challenges facing SMEs in accessing credit facilities are high interest rates charged by banks as well as conditions set by commercial banks in the borrowing process such as, requirements of collateral and business plan to address the challenges faced by SMEs in accessing credit facilities from financial Institutions, the study recommends that bank should start offering credit management training to SMEs in order to help them to repay loans and the government should support banks which offer credit facilities to SMEs. Banks should also conduct awareness campaigns among SMEs on credit facilities available.