Impact of Employment on Access to Credit of Non-agricultural Household Enterprises in Nigeria

This study examined how employment and other microeconomic variables, such as spendings on transport, rent, salaries and wages, and other business cost, as well as enterprise location are influencing access to credit of non-agricultural household enterprises in Nigeria. The study departs from other existing studies in two main ways. First, this study decomposed non-agricultural household enterprises into urban and rural enterprises in order to provide deeper policy insights. Second, unlike the bulk of existing studies that used linear regression techniques, this study used the binary logistic regression technique since access to credit, which is the dependent variable, is dichotomous. Cross-sectional data from Nigeria’s 2019 General Household Survey (wave 4) were used. The results show that employment impacts positively and significantly on access to credit by non-agricultural household enterprises. Spendings on transport and other business costs showed significant negative impacts on access to credit by non-agricultural household enterprises, while the roles of other factors, like spending on rent, enterprise location, and spending on salaries and wages, remained predominantly insignificant. We, therefore, stressed the need for policymakers and leaders in Nigeria to work together and exploit job creation as a channel for promoting access to credit and overall enterprise performance in Nigeria.