Assessment of Project Monitoring Activities of Microcredit Agency on SMEs performance

Most Governments of developing countries have turned to setting up microcredit programs to give both financial and non-financial support to SMEs. However, weak project monitoring capacity of Microcredits institutions has continued to lead to poor loan utilisation, increases the risk of diversion of loans and ultimately high level of non-performing loans. This study seeks to assess the effect of project monitoring activities of the Ondo State Microcredit Agency on the performance of SMEs in the State. The study adopted Survey Research Design as primary data were used for the purpose of the study. This research work identifies and presents the project monitoring operations of Ondo State Microcredit Agency (OSMA) and their effects on the performance of SMEs. From a total population of 745 beneficiaries, 261 beneficiaries were selected based on Yamane sample size formula and they were retrieved from the list of all the beneficiaries in each SME category obtained from the agency. The research instrument adopted for collecting data from the respondents was a pre-tested and validated questionnaire. Questions were on a 5-point Likert scale, and multiple-choice type questions. Analysis of the results obtained were done using descriptive analysis and Partial Least Square-Structural Equation Modeling(PLS_SEM) was employed to test the hypothesis. The models specified by this study are significant at 5%. The results showed that two (control measure and fund utilisation) sub- constructs of project monitoring were significant while the other two (Business/Site visitation