EFFECT OF MICROFINANCE BANKS ON THE GROWTH OF SELECTED SMALL AND MEDIUM SCALE ENTERPRISES IN MAKURDI METROPOLIS, BENUE STATE Adamu Garba Department of Business Administration, Nasarawa State University, Keffi, Nasarawa State ABSTRACT This study examined the effect of microfinance banks on the growth of selected small and medium scale enterprises in Makurdi Metropolis, Benue State.The study was anchored on Pecking Order theory. The researcher used both primary and secondary sources from a population of 960 and a sample of 282 respondents obtained by the use of a structured questionnaire. The data collected were analyzed using descriptive statistics such as frequency, simple percentage and the relationship between the variables of the model was tested using multiple linear regression analysis. The result of the regression analysis indicates that a positive relationship exist between Credit by Microfinance (CMF) Job Creation (JOC) of selected SMEs in Makurdi Metropolis and the relationship is statistically significant (p<0.05). A positive relationship exist between Credit by Microfinance and Business Expansion (BEX) of selected SMEs in Makurdi Metropolis and the relationship is statistically significant (p<0.05). A negative relationship exist between Savings Mobilization and the Growth of Small and Job Creation (JOC) of selected SMEs in Makurdi Metropolis and the relationship is not statistically significant (p>0.05). A positive relationship exist between Savings Mobilization (SMB) and Business Expansion (BEX) of selected SMEs in Makurdi Metropolis and the relationship is statistically significant (p<0.05). It was concluded that micro finance does enhance the job creation and expansion capacity of small business in Nigeria. It was recommended among others that microfinance bank should adopt similar strategies adopted by deposit money banks in deposit mobilization because it is by so doing that they will be able to grant quality loans to entrepreneurs which will lead to job creation in the economy. Keyword: Microfinance, Bank, Growth, SMEs, Benue, Nigeria 1.0 INTRODUCTION The Small and Medium Scale Enterprises is considered as the engine that drives the economy of any nation as it provides opportunities for the countless millions of unemployed people to productively engaged in one venture or the other. The contribution of Small and Medium Scale Enterprises to employment generation, improvement in the standard of the life of the people has been globally acknowledged. As beautiful as this role of Small and Medium Scale Enterprises is in bringing about the much needed improvement in the society. majority of the Small and Medium Scale Enterprises (SMEs) in Nigeria are still at a low level of development, especially in terms of number of jobs, wealth and value creation. This is because 65% of the active population, who are majorly entrepreneurs, remain unserved by the formal financial institutions (Abiola and Salami, 2011). Journal of Advance Research in Business Management and Accounting ISSN: 2456-3544 Volume-5 | Issue-7 | July, 2019 1