This paper assesses the impact of Small and Medium Scale Industry (SMI) loans in terms of general objectives of these loan schemes. It is argued that these loans have benefitted the SMI sector but have not been used to their maximum potential or achieved all their objectives. It is also observed in this paper, that despite the availability of these credit schemes, small businesses still find it difficult to expand. This research paper also examines the shortcomings of these SMI loan schemes, and proposes various solutions for these problems.