Effect of Contributory Saving Group Finance Sources and Loan Shark Finance Sources on the Performance of Small Businesses in Yola Metropolis, Adamawa State

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Authors: Mohammed Zhulqarnaini Mustapha and Hauwa Modu Kumshe 

Abstract

This study investigates the effect of Contributory Saving Group Finance (CSGF) and Loan Shark Finance (LSF) on the performance of small businesses in Yola Metropolis, Adamawa State. Small businesses play a critical role in local economic development, yet they often lack access to formal finance. Consequently, many entrepreneurs depend on informal finance mechanisms, such as contributory saving groups and loan sharks. A quantitative research design was adopted, using structured questionnaires distributed to 150 small business owners across various sectors. Data were analyzed using descriptive statistics and regression analysis. Findings show that CSGF positively and significantly influences business performance, while LSF has a detrimental effect. The study concludes that informal cooperative finance fosters business sustainability, whereas predatory lending practices hinder growth. It recommends the promotion of CSGFs and regulatory action against exploitative lenders.

Keywords: Contributory Saving Groups, Loan Sharks, Small Business Performance, Informal Finance, Financial Inclusion

2025 - NIJAF - 17 - 106 Mohammed & Kumshe.pdf

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