Determinants of Access to Entrepreneurial Credit: Examining Women Entrepreneurs in Sokoto State, Nigeria

This study was carried out to examine the determinants of women entrepreneurs’ access to credit in Sokoto State of Nigeria. Primary data were obtained from a sample of 343 women entrepreneurs via questionnaire and analysed using binary logistic regression. Out of the seven factors investigated, only five were found to influence women entrepreneurs’ access to credit in Sokoto State. These are cost of credit, collateral security, level of education, awareness of credit opportunities, and rigid terms and conditions. The other two, namely, credit union membership and proximity of credit facility were not found to influence women entrepreneurs’ access to credit in Sokoto State. Results showed that level of education and awareness of credit opportunities were positively related to women entrepreneurs’ access to credit whereas cost of credit, collateral security and rigid terms and conditions were negatively correlated with women entrepreneurs’ access to credit. Findings suggest that microfinance institutions and other sources of credit facilities should reduce the cost of credit and the demand for collateral security as well as simplify the prevailing rigid terms and conditions so that women entrepreneurs in Sokoto State can access credit. Awareness of credit opportunities should be raised and women entrepreneurs should also be encouraged to improve their level of education in Sokoto State in order to leverage the credit faculties available to them. Moreover, policy makers and relevant stakeholders have the responsibility to make informed decisions to positively address the determinants identified in this paper.


Introduction
In the face of serious unemployment and poverty issues in Nigeria, many studies have identified entrepreneurship as the way forward. Although, entrepreneurship is not projected as a panacea for Nigeria's unemployment and underemployment problems, it recognised to create jobs and reduce poverty. The important role of Micro, Small and Medium Enterprises (MSMEs) in job creation and poverty reduction in Nigeria has long been recognized.
Entrepreneurs are however faced with many different problems, and access to finance has remained atop all other issues when it comes to translating entrepreneurial intentions to thriving businesses. In a 2013 National MSME Survey jointly conducted by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and National Bureau of Statistics (NBS), it was highlighted that one of the main challenges confronting the operations of MSMEs in Nigeria is access to finance. Other identified challenges include poor infrastructure, inconsistency in government policies, poor support (business development services), access to market, multiple taxation and obsolete technology. Undoubtedly, there are many people who are engaged in microenterprise businesses in Nigeria but need access to credit facility. Statistics showed the total number of MSMEs in Nigeria to be 37,067,416 with microenterprises accounting for almost 99% of them, and employing a total number of 59,741,211 persons, representing 84.02% of the total labour force (SMEDAN and NBS, 2013). In spite of this substantial involvement of men and women in microenterprise activities in Nigeria, capital has always been an impediment to business growth and expansion of entrepreneurs (Olateju, 2018). As a result of the bottlenecks associated with accessing finance from conventional financial institutions, many entrepreneurs are often restricted to seeking microcredits, which are equally difficult to access. Evidence in literature suggests that women find it more difficult to access credit facilities than their male counterparts and this remains a huge challenge for women entrepreneurs in Nigeria (Nkamnebe, 2009). The following questions were raised in this research work: i.
Is there is any relationship between cost of credit and access to credit in Sokoto State? ii.
Is collateral security a determinant of access to credit in Sokoto State? iii. Is there any relationship between level of education and access to credit in Sokoto State? iv.
Is credit union membership a determinant of access to credit in Sokoto State? v.
Is there any relationship between awareness of credit opportunities and access to credit in Sokoto State? vi.
Is proximity of credit facility a determinant of access to credit in Sokoto State? vii.
Do rigid credit terms influence access to credit in Sokoto State? To achieve this, this article is structured into five sections. Section one is the introduction, followed by the literature review and hypothesis development in section two. Section three presented the methodology. Section four discusses the results followed by the recommendations and conclusions which were drawn in section five inferential statistics and therefore lack the power of predictive generalization.
In Nigeria, Metu, Nwokoye & Kalu (2015) had, in a related study, investigated the impediments to accessing finance for female micro entrepreneurs in Awka, Anambra State. Using bar charts and simple regression analysis, Metu et al found that lack of information, bottlenecks involved in accessing loan, high interest charged and stringent repayment terms are factors that significantly influence female micro entrepreneurs' access to finance in Awka, Nigeria.
In Nigeria also Wosowei (2015) examined the constraints to women entrepreneurs' access to microfinance services in Bayelsa State. Analyzing data collected from a sample of 150 respondents using descriptive statistics (mean scores) and exploratory factor procedure, she found that women entrepreneurs in Bayelsa State were faced with technical, management, economic, and social constraints in accessing microfinance services. In line with her findings, Wosowei recommended that reducing interest rate, relaxing strict conditions, bringing microfinance services closer to the people, and creating more public enlightenment for women entrepreneurs about microfinance services can improve access to microfinance services in the Bayelsa State.
Koko et al (2017) study of women entrepreneur's accessibility to growth capital and socioeconomic development in Sokoto State Nigeria, found that marital status, purdah, high semi-illiteracy and collateral requirement as significant determinant of accessibility to credit facility in Sokoto State.
Apparently, many factors influence entrepreneurs' access to microfinance. In the present study, therefore, we hypothesize that there is no significant relationship between cost of credit, collateral security, level of education, credit union membership, awareness of credit opportunities, proximity of credit facility and rigid terms and conditions and women entrepreneurs' access to credit in Sokoto State.

Methodology
The quantitative (descriptive) research design was adopted to quantify the relationships between access to credit and seven predictor variables in Sokoto State. A sample of 343 women entrepreneurs was selected from the population size of 3220 women entrepreneurs in Sokoto State using Krejcie and Morgan's (1970) sampling approach with a 95% confidence level, 5% margin of error and a population proportion of 0.5. This is a standardised procedure in line with Krejcie and Morgan. Given that there are 23 Local Government Areas spread across 3 senatorial districts in Sokoto State, both purposive and stratified random sampling approaches were used to identify the target sample of 343 active women entrepreneurs in Sokoto State from whom primary data were obtained via questionnaire. Logistic regression was used to determine the relationship between the dichotomous characteristic of access to credit (AC) and a set of seven predictor variables, namely, cost of credit (CC), collateral security ( where P(y) is the probability of women entrepreneurs accessing credit in Sokoto State; β0 is a constant term; βi is a vector of coefficients of independent variables Xk, and Xk is a vector of independent variables. This is written in terms of our variables as follows: Logit  Vol.11, No.8, 2019 β1 -β7 = Estimated coefficients of predictor variables

. (v)
As indicated above, the logistic regression model was statistically significant at 5% level of significance, χ 2 (7) = 57.14, p < .005. This means that the seven determinants examined had a combined significant effect on women entrepreneurs' access to credit in Sokoto State. The model explained 29% (Pseudo R 2 ) of the variance in access to credit. This predictive power is sufficient for a logistic regression model with a fairly large sample size as the one used in this study (Gujarati and Porter, 2009). When the predictor variables were evaluated for their individual contribution to the model, it was found that only 5 out of the 7 variables were significant in the model. The 5 variables are cost of credit, collateral security, level of education, awareness of credit opportunities, and rigid terms and conditions. The 2 variables with no significant contribution to the model are credit union membership and proximity of credit facility. These are explained below.

Hypothesis 1 (H01): There is no relationship between cost of credit and access to credit
Cost of credit and access to credit Result of analysis in Table 2 indicates that there is a significant relationship between cost of credit and access to credit (ρ = 0.002 < 0.05) at the 5% level of significance. The null hypothesis (H01) is therefore rejected. It was found that cost of credit was negatively correlated with women entrepreneurs' access to credit in Sokoto State. This means that if other variables are held constant, with a unit increase in cost of credit, the log odds of accessing credit would decrease by almost 63.5%, and vice versa. Consistently, with an odds ratio of 0.8801, a one unit increase in cost of credit would decrease the odds of accessing credit by a factor of 0. 8801. Cost of credit is therefore a negative determinant of accessibility of credit by women entrepreneurs in Sokoto State. This result is consistent with Gichuki, Njeru and Tiramba (2014) who identified high cost of repayment and high credit processing fees as challenges to accessing credit in Kenya.
and rigid terms and conditions, was examined. The study found 5 factors to be determinants of access to credit, namely, cost of credit, collateral security, level of education, awareness of credit opportunities, and rigid terms and conditions. Whereas, 2 factors, namely, credit union membership and proximity of credit facility were not found to be determinants of access to credit in Sokoto State at the 5% level of significance. Of the 5 determinants, three factors were found to be negative, viz. cost of credit, collateral security and rigid terms and conditions. This means that these 3 factors are rather inhibitors to women entrepreneurs' access to credit in Sokoto State. However, level of education and awareness of credit opportunities were found to be positively related to access to credit.
Since women entrepreneurs' access to credit in Sokoto State is constrained by these 5 factors, microfinance banks, policy makers and other credit givers are advised to reduce the cost of credit and the demand for collateral security as well as simplify the prevailing rigid terms and conditions so that women entrepreneurs can access credit in Sokoto State. Similarly, awareness of credit opportunities should be raised and women entrepreneurs should also be encouraged to improve their level of education in Sokoto State in order to maximise the potentials of credit faculties.
It is suggested that further studies may be carried out to observe the effects of these determinants on the accessibility to credit of the male entrepreneurs in Sokoto State. in addition, others States in North-western Nigeria may be incorporated into future research.