Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.6, No.17, 2015 108 Effect of Loan Repayment on Micro Businesses’ Accessibility to Credit Financing In Gombe Metropolis, Gombe State, Nigeria Hanatu Elisha Barde Ministry for Local Government and Chieftaincy Affairs, Gombe State Mustapha Momoh Department of Management, University of Maiduguri, PMB 1069 Maiduguri, Borno State, Nigeria John Kwazhi Department of Accounting, University of Maiduguri, PMB 1069 Maiduguri, Borno State, Nigeria. ABSTRACT The study analyses the effect of loan repayment on micro investors’ accessibility to credit financing in Gombe Metropolis, Gombe state, Nigeria. In order to realise this objective, the researchers obtain loan performance documentation from the sampled banks in the study population. This enabled the researcher to identify those micro business operators that accessed bank credit facilities and the level of repayments of the disbursed funds in 2013and 2014 financial years. The researchers administered 140 copies of well-structured questionnaire and elicit relevant data from micro business operators within the study population. Relevant literature gathered from published books, journals, reports, newspapers and magazines were reviewed to conceptualise the study. Resultant data were presented and analysed by the use of Descriptive Statistics, charts, Paired Samples Correlation, Paired Samples t-test and Curve-fit Regression Model. The significant differences of loan repayments were identified and are found to be associated with credit accessibility within the period under review. The study reveals that loan repayment has a positive effect on micro investors’ accessibility to credit financing in Gombe Metropolis Nigeria. On this note, recommendations were made to enhance loan expansion by the financial institutions to micro investors as well as modality for prompt repayment of the borrowed funds. Keywords: Loan Repayment, Credit Accessibility, Micro Businesses, Performance Introduction Micro businesses usually operate in informal and semi-formal sectors in Nigeria. It is quite evident that micro businesses constitute the fountain head of vitality for economy growth and development in a country. This is obvious by virtue of their number, diversity, penetration in all sectors of productions and services. Micro businesses contribute enormously to employment and prosperity of the particular areas in which they operate (Adebusuyi, 1997). They constitute a greater percentage of all registered companies in Nigeria, and they have been in existence for a quite long time (Easien, 2001). Majority of the medium and large scale industries developed from cottage industries to small enterprises. Since micro businesses constitute the bulk of the private sector, economic growth can’t be achieved without the active involvement, promotion and development of micro sector of the economy. Indeed, this sector has attracted due attention in recent time, still there are formidable obstacles that inhibit them from growth and expansion. One of the most crucial and leading constraints is access to credit financing from the formal lending institutions. the banking sector have been reluctant to provide loans to micro entrepreneurs; on the one hand, they are unable to fulfil the bank’s lending requirements, and on the other hand, banks consider them as involving high risk factor, undependable and involve excessive administrative costs. Hence, they regard them as ineligible for provision of banking services. To solve the financing constraint of micro businesses, there is a need to review the perception and level credit financing that banks have accorded this sector of the economy. It is also very necessary to review currently the loan default problems between the banks and micro entrepreneurs and how this could affect future loan disbursement to the sector. An understanding of factors affecting loan repayment performance of micro business investors would help policy makers to formulate successful credit policies and programmes that enable them to allocate scarce financial resources to the development of micro sector of the economy. Such review serves as a yardstick for the bank to identify the major characteristics that distinguish credit worthy borrowers and defaulters so that it could act accordingly for future credit accessibility. The issue of the allocation of credit has profound implications both at the micro and macro levels. When credit is allocated poorly, poor investment projects are undertaken and the business resources are squandered, it raises costs to prospective borrowers, erodes the fund that would be available for future investment, reduces banks flexibility in redirecting available credit for investment purposes. In spite of the importance of loan in micro