Developing countries have been faced with different economic constraints that have impeded their growth and development potentials. In Nigeria, the reduction in formal sector employment and the high unemployment rate, which pose severe economic and social challenges, have become matters of urgent national concern. This study uses secondary data collected from 1991Q1–2020Q4 to examine the Impact of SME credit access on employment generation in Nigeria. It utilizes the Autoregressive Distributed Lag (ARDL) estimation technique. The results show both the short and long-term effects of SME credit access on employment generation in Nigeria. The outcome also showed that access to SME credit has a positive and statistically significant impact on creating employment. Therefore, the study recommends that banks should be obliged to offer much-needed funds to SMEs with little or affordable collateral. The government should take regulatory measures to keep commercial banking loan rates competitive and not unnecessarily exorbitant. Furthermore, the government should implement effective monitoring and evaluation mechanism to ensure that development financial institutions meet their mandates and objectives. In addition, the government, chambers of commerce and industry, and other non-governmental organizations should hold regular seminars for potential and existing small and medium-sized firm operators on how to plan, organize, direct, and control their operations to make them more productive as job creators.

Keywords: credit accessibility; informal sector; Job creation; Small business finance; and employment

JEL Code: E24, E51, O16