IMPACT OF ACCESS TO FINANCE ON SMALL BUSINESS GROWTH AND SURVIVAL IN KATSINA STATE, NIGERIA

Abstract

This study examines the impact of access to finance on small business growth and survival in Katsina State, Nigeria, where financial constraints disproportionately hinder SME development. Using a quantitative survey of 120 small business owners selected through stratified random sampling, the research analyzes key variables—financial access, growth indicators (revenue, employment, assets), survival rates, constraints (interest rates, collateral, bureaucracy), and institutional support—through descriptive and inferential statistics (Pearson correlation, regression, ANOVA) in SPSS. Findings reveal a strong positive relationship between financial access and both business growth (r = 0.612, p < 0.01) and survival (β = 0.512, p < 0.05), though high collateral demands (mean = 4.01) and bureaucratic hurdles (mean = 3.80) limit formal credit uptake, particularly among women and rural entrepreneurs. While government interventions improved outcomes for beneficiaries (78% survival vs. 61% for non-beneficiaries), low participation rates (31.7%) highlight implementation gaps. The study validates the Pecking Order Theory and Credit Rationing Theory in Nigeria’s northern context, recommending collateral reforms, digital financial inclusion, and streamlined policies to enhance SME sustainability. These findings contribute to literature on regional SME financing and provide actionable insights for policymakers aiming to bridge financial inclusion gaps in underserved markets