The Role Of Commercial Bank In Small Scale Business Financing

THE ROLE OF COMMERCIAL BANK IN SMALL SCALE BUSINESS FINANCING

ABSTRACT

This study is aimed at finding out the role of commercial banks play over the small scale industries and the problem the small scale industries encounter. This study, has been divided into five (5) chapters thus: Chapter one is the introduction sitting out the background of the study, the research highlighted that the performance of small scale industries are financed by commercial banks and other financial institution this study is paramount importance because it helps to discover the problem facing the small scale industries in the course of financing themselves. Chapter two is a review of related literatures, it started by the definition of the small scale industries the definition by the small scale, the institution involved assistance provided by commercial banks to small scale industries government policies for promoting small and medium scale industries etc. Chapter three decals with the research design and methodology improved in the study. Here data were collected from secondary sources. Chapter four, the research state the finding or result collected in the course of this research work. Finally chapter five stated the conclusion and recommendation of the study.

 

         

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

Title Page                                                                         i

Approval Page                                                                 ii

Dedication                                                                       iii

Acknowledgement                                                           iv

Abstract                                                                          v

Table of contents                                                             vi

CHAPTER ONE    

Introduction                                                                    1

1.1   Background of the study                                        1

1.2   Statement of the problem                                       4

1.3   Purpose objective of the study                                5

14    Significance of the study                                 6

1.5   Limitation of the study                                           7

CHAPTER TWO

2.0   Literature review                                                     9

2.1      The concept of small scale industry                       9

2.2      Financial institutions involves in development

 of small scale enterprise                                        13

2.3      Assistance provided by commercial banks to

small scale industries                                             22

2.3.1        Types of credit commercial banks grant to

small scale enterprises                                           23

2.4      Government policies for promoting small and

medium scale industries                                        26

2.5      Government roles in encouraging small

scale industry                                                         30

2.6      The effect of government policy on small

enterprise                                                                32

2.7       Problems of small scale and medium scale

enterprise in Nigeria.                                              33

CHAPTER THREE

3.0   Research design and methodology                         37

3.1       Source of data                                                        37

3.2      Location of data                                                      37

3.3      Methods of data collection                                      38

 

CHAPTER FOUR

4.0   Findings                                                                  39

CHAPTER FIVE

5.0   Conclusion/Recommendation                                41

5.1   Conclusion                                                              41

5.2   Recommendation                                                    42

Bibliography                                                           47

 

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

The concept of dependent has occupied as central place in the economic development over the year, basically as a manifestation of the various attempts by the developing world-to chart new economic strategies which would relieves then of economic dependence on their former colonial master, in Europe. Today the concept of dependent continues to be misunderstood in its fundamental ramification and has remained difficult in large sections of the developing world. In Nigeria, neither the mixed economy approach, appeal to have responds to the dictates of economies dependent.

However, in pursuit of dependent in the developing world like Nigeria, the central government enacted called “enterprises promotion decree” when there was need for small scale enterprises owned and managed by Nigeria to be promotion of economic development strategies. Many developing countries have failed to adopt this strategy owing to their believed that it is a relatively slow process of industrialization, but in the recent time is due to the scarcity of foreign exchange, attention has been to be focused once again on developing of ingenious without the development of small scale industries in Nigeria the nations request for industrialization will certainly remain forever at a state.

Furthermore several financial institution are invested in entrepreneurship development in Nigeria in ways some of then are set up by the government for specific functions. There man functions are to provide findings relied from financial consequences of uncertainty and advisory services for business enterprises public and private. The government plays the role of financial companies.

Some of these institution include Nigeria bank for commerce and industry (UBCI) Nigeria Agricultural and development bank (NDB) people bank of Nigeria (PBU). The commercial sourcing for fund and enough fund cannot be mobilized from friend and relations the next things that comes to mind is to try the banks. The commercial banks for instance is the center to the leading market and makes the greatest number and rarity of want. The commercial are very conservative in leading the commercial banks look at many things apart from the ability of entrepreneur to provide the needed collateral and may be interested by looking at the feasibility report. The experience of the entrepreneur his personal credit records profit potentials.

More, so apart from the banks, financial institution like the insurance companies provide relief from financial loss and especially from fear of loss is perhaps is one of the fastest growing industries in Nigeria. It is the important for the entrepreneur who want to be free from uncertain loss in threat of loss to have adequate insurance.

Finally the role of bank in the development of small scale enterprise cannot be over emphases due to the role it plays in the country over the small scale industries

1.2  STATEMENT OF THE PROBLEM

Some financial institution in Nigerian are involved in entrepreneurship development in many ways. Some of them are set up by the government for specific function while others are set up by private organization. They provide funding relief from financial consequences uncertainty and advisory services for business enterprises etc stile on this, there is problem of development in small scale industries. Why is it that our small scale industries are not yet developed despite all the functions performed by financial institution in Nigeria. Could it be that the credit granting for entrepreneurship development from banks are not adequate for funding them. The answer to this question will come in the subsequent chapter of this research work

1.3   PURPOSE OBJECTIVE OF THE STUDY

For the purpose of this research the researcher has come with the following objective

(1)        To know what small scale industries is all about.

(2)        To know specific function perform by the government in developing small scale industries.

(3)        To know some of the financial institution involved in the development of small scale industries in Nigeria.

(4)        To know some of the assistance provided by commercial bank in the area of small scale industries.

(5)        To know some of the government policy for promoting small and medium scale enterprises.

(6)        To know some of the government role in encouraging small industries.

(7)        To know the affect of government policies on the small scale industries.

(8)        To know the problems of scale and medium scale industries.

Finally to give solution or suggestion on how to tackle the problems of small scale enterprises in Nigeria.

14   SIGINIFICANCE OF THE STUDY

This research work will be great importance to so many beneficiaries, specifically to both private and public owners of business. Individuals who are into small scale business will equally benefit and also those who enter into the business of small scale industries will equally benefit from this research work.

        How ever, financial institution will equally benefit are returns from small scale industries will deposited in their custody. When profit are generated effective utilization of this research work.

1.5  LIMITATION OF THE STUDY

The research has already said that the scope of the research work is limited to commercial banks and the reasons for this had been given. The limitation that is tucked about here will be taken to mean the problem already and will still be encountered by the researcher. It is always said and believe that, nothing good comes easy and with out pains no gains.

        The research is at present undergoing and still anticipates more of economic problems. The research of this nature should normally required a lot of money which an average student just cannot afford especially with the present economic situation in Nigeria.

        However, with the little financial support from my parent and aids from friends and well-wishers, even relatives. I hope to aver-come, this constraint.

        On the other hand, time factor is another problem confronting the researcher in this study. A regular full time under-graduate. Student especially of institution of management and technology who carries the normally semester load does not have the full necessary time required for a research work of this kind he attends lectures from Monday to Friday. However with deviation and commitment and by the specially grace of God, I hope I will succeed.