ABSTRACT

The study investigated the relationship between microfinance units and SMEs performance in Nigeria for the period of 35 years (1981 to 2015). The study adopted the time series data using the OLS estimation technique to analyze the data. The model was estimated using a linear specification methodology. It was discovered that microfinance unit has a significant effect on SMEs performance in Nigeria. Based on this, it is recommended that Microfinance banks should be encouraged and supported given that its finances are significantly related to SMEs productivity which has been proven to be a good determinate of economic growth in Nigeria.