Small and medium scale enterprises are many in our economy and plays the vital role of providing specialized services to the customers of the large scale enterprises. Moreso, it is a source of income or employment for greater percentage on Nigerians. It becomes paramount that financing of the small and medium scale enterprises to the agenda of the financial institutions. But are they at all in their agenda? What are their relationships with regards to financing?
It is the aim of this research to find out the role of commercial banks as the financing of small and medium scale enterprises, taking the Union bank PLC as a reference point. To delve into the matter, the research work has five chapters.
Chapter one is the general discussion of the small and medium scale enterprises from different perspectives. As a further discussion, there was the statement of problems of the study , the need of the study, the scope, limitations and the definition of terms.
Highlighted is chapter two are the review of related literature as carried out by authors and researchers.
Chapter three of this researcher work deals with the design of the study, the data collection method. In other words, the ways through which the questionnaires were distributed to the respondent were discussed.
In the fourth chapter of the research work, the data collected were analyzed and interpreted.
Finally, the summary of findings, conclusions and recommendation are made in chapter five.
It is the belief of the researcher that the recommendations if strictly adhered to by the entrepreneurs and financial institutions will ensure their mutual survival and growth.
TABLE OF CONTENTS
CHAPTER TWO REVIEW OF RELATED LITERATURE
FINDING RECOMMENDATION AND CONCLUSION
i BIBLIOGRAPHY
ii QUESTIONNAIRE
iii LETTER OF TRANSMITTAL.
The world as it is today is categorized into two broad groups namely the industrialized bud the non industrialized nations represent those whose economy have been made vibrant by the participation of industries small scale and medium scale and activities. This has never ceased to be the wish of any government that was a capitalist or a mixed economy.
However, owing to the differences in the strength of entrepreneurs, the industries are grouped into three, viz. the small-scale industries (SSI), the medium scale industries (MSI) and the large-scale industries (LSI) of industries that abound in many countries of which Nigeria is one. The services of these industries are indispensable even to the large firms and the need for expansion is always top on their agenda.
This is where financial institutions come, in, particularly the commercial banks. The short fall in the personal financial of the entrepreneurs are augmented by the financial institutions. However, it is a prominent situation today whereby one funds the bridge unable to cross to the other side of the river. In Nigeria, as in many other developing countries, there is the death of financial institutions, which cater for long and medium term credit needs of business operations. It suffices here to say that the entrepreneurs suffer a great deal in their bid to establish themselves in the ever-dynamic business environment
Nigeria is a nation endowed with abundant human and national resources that have yet been fully tapped. The issue remains that her pace towards economic development has not records with other naturally endowed nations. While some sectors of the economy have recorded some significant growth, others continue to lag behind in spite of increase financial allocations, resulting in uneven development and the attendant drift the rural –urban drift.
Government effort to check the above annualized have not been fruitful, rather the problem seem to be on high rise with every effort in certain cases. The last straw that broke the carnels back was the down turn of oil prices, for the growth in oil production coupled with high sales in the 1970s, has turned the economy from a production oriented one 5to an import and export one. It was when the oil glut was witnessed in 1981 that our economy planners recognized the need to reverse the trend. Hence the concept of diversifying the economy is the establishment of small scale industries. Again, the importance of these industries to the economic survival of the country cannot be over emphasized. They have moved from the sub-existence level of indigenization to period to a position of importance in the country’s industrialization process.
Nigeria as a capitalist economy with diverse and populous entrepreneur entrepreneurs in an attempt to bring about focused and religiously dedicated entrepreneurs in the many small scale industries their level of operation have to move into a capital intensive stage. To do this, a reasonable amount of capital is needed. That nature of capital needed in many cases is beyond the financial institution capacity of the entrepreneurs who set up the business.
The major alternative for provision of such capital is the financial institutions. Among the financial institutions operations in the country, the commercial banks is one the major sources of credit to various sector of the economy. However, it is a common knowledge that getting financial support from the commercial banks has been greatly unorganized for building indigenous entrepreneurs and even for those who have been in the manufacturing business for a long time.
The role of bank in financing small-scale enterprises is a quest anyday as the researcher seeks to determine the role of banks in being the bridge between the small scale enterprises. This as well will as the yardstick for determining the actual achievement of the lending banks (commercial banks) in terms of size of loans, accessibility of credit, the frequency of lending, technical; assistances, etc. That small-scale enterprises have benefited appreciably from banks in terms of capital provision is a question which its answer will surface at the and of the research.
Practically, the major problems of small scale and medium scale industries consist of finance, organization. To be undertaken in this research is banks performance with other research is banks performance with other sources open to small scale industries to find out which source of industries to find out which source of credit is are most useful and important to small scale enterprises.
In view of the problem of small-scale industrialist, the objective of this study is to evaluate the role of banks in financing small-scale industries in Nigeria. The specific objectives are:
To identify the problems encountered by the industrialist in obtaining finance from banks.
To appraise the situation and make recommendation on how to improve the banks.
To highlight the extend to which the commercial banks have helped to finance small-scale industries and problems hindering such.
To create attractive opportunities for investment in Nigerian industries and provide outlets for production investment of Nigerian savings.
To conduct research into other aspects of banking operations like acceptance of tem deposit and provision of loans to Nigerians.
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