Corporate Governance, Social Capital, and Access to Development Finance in Nigerian Small and Medium Enterprises

This study investigates the joint effects of corporate governance quality and social capital on access to development finance among small and medium enterprises in Nigeria. Access to affordable long-term finance from development finance institutions including the Development Bank of Nigeria, the Bank of Industry, and state-level funds remains a critical constraint for Nigerian SMEs seeking to scale operations. Existing research has largely examined governance or social capital separately as determinants of financing access; this study addresses the gap by exploring their interactive effect. Drawing on resource dependence theory, social capital theory, and financial contracting literature, this study posits that governance quality amplifies the positive financing effect of social capital, enabling SMEs that combine strong relational networks with formal governance structures to access development finance on more favourable terms. A structured survey is administered to 240 SME owners and managers across the South West, North Central, and South East geopolitical zones, supplemented by interviews with fifteen development finance institution loan officers. Path analysis using structural equation modelling tests the proposed mediation and moderation relationships. The study contributes an original interactive model to the governance-finance nexus literature for Nigerian SMEs. Findings will guide development finance institutions and business support organisations in designing governance-linked financing products. Keywords: corporate governance, social capital, development finance, SMEs, structural equation modelling.