The research work studied the financing of small and medium scale enterprises in Nigeria with special focus on the role of commercial banks. While the future of the Nigerian economy resides in the development of SMEs, the major problem confronting small and medium scale enterprises in the country is finance.
Regression analysis was employed in the data analysis. Due to the linearity nature of the model formulation, ordinary least square (OLS) estimation method was adopted. The variables employed include: gross domestic product, loan granted to small scale industries by commercial banks and the interest rate.
The result of the analyses showed that the small and medium enterprises do not play crucial role in economic development of Nigeria. It was also found that Nigerian banks has been giving less and less priority to small and medium enterprises in their credit composition.
Some of the recommendations made in this study are that commercial banks should give priority to SMEs, government should create and enabling environment where businesses can strive. Government should restructure BOI and BOA in order to make them effective and efficient.