ABSTRACT
A small and medium scale
enterprise are many in our economy and plays the vital role of providing
specialized services to the customers of the large scale enterprises. More so,
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 First 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 ONE
1.1 Introduction
1.2 statement
of
problem
1.3 objective
of the
study
1.4 significance
of the
study
1.5 scope
limitation and
delimitation
1.6 limitation
of the
study
1.7 definition
of terms
CHAPTER TWO REVIEW OF
RELATED LITERATURE
2.1 Historical
background of small scale
industry
2.2 Importance
of small scale
industries
2.3 The
major forms of financial
assistance
2.4 The
role of banks
finance
CHAPTER THREE
3.1 Research
design and
methodology
3.2 Research
design
3.3 Election
of Data
3.4 Sources
of
Data
3.5 Research
Instrument
CHAPTER FOUR
4.1 Data
presentation
4.2 Analysis
and presentation of
responses
4.3 Test
of
hypothesis
CHAPTER FIVE
FINDING RECOMMENDATION
AND CONCLUSION
5.1 Summary
of
Findings
5.2 Recommendation
5.3 Conclusion
Bibliography
APPENDIX
CHAPTER ONE
1.8 INTRODUCTION
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 1980s, 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.
1.9 STATEMENT
OF PROBLEM.
The role of bank in
financing small-scale enterprises is a quest any day 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.
1.10 OBJECTIVE
OF THE STUDY
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:
i. To
identify the problems encountered by the industrialist in obtaining finance
from banks.
ii. To
appraise the situation and make recommendation on how to improve the banks
iii. To
highlight the extend to which the commercial banks have helped to finance
small-scale industries and problems hindering such.
iv. To
create attractive opportunities for investment in Nigerian industries and
provide outlets for production investment of Nigerian savings.
v. To
conduct research into other aspects of banking operations like acceptance of
tem deposit and provision of loans to Nigerians.
1.11 STATEMENT
OF HYPOTHESIS
In the process of
carrying out this study, the following assumptions were made:
a. The
small-scale industrialists frequently apply for overdrafts from commercial
banks.
b. The
small scale industrialists frequently apply for loans from commercial banks
c. An
increase in bank interest will result in a decrease in industrial production.
I.5
SIGNIFICANCE OF THE STUDY
The significance of the study is to evaluate the extent to which the
small-scale industrialists have been able to obtain the assistance of banks in
capital funding of their business. The research will be importance in that it
will provide data for future studies in the subject. Thus, the study will be of
benefit to students, who will live to carry out research on related topic in
future, it will make their work easier because already a foundation has been laid.
Industrialists will benefit because the research
project will reveal any problems in relationship between the banks and the
small scale industrialists when there problems are revealed it will aid small
scale borrowers ti obtain loans easily without much problems.
Banks will benefit
because the actual size they play in financing of small-scale industries will
be revealed. This gives them the reason to ask federal government for loan,
when they have needed for that.
Individuals will also gain because when banks give loans to industrialists, the
needs of the people are provided if not fully but to an extent that a good
number of people benefit.
1.6
SCOPE
This topic “The Role of Financial institutions in Enhancing Small – Scale
Enterprises” (A case study of First Bank PLC) is very vast but for purpose of
manageability, and financial constraints, it has therefore been restricted or
limited itself to banks in Enugu state. In choosing the banks the researcher
has limited his research to those areas of the banks or operations of the
institutions that enhance economic emancipation of Nigeria and used inference
drawn upon to apply to other development financial institution. This has been
so because the research assumes that all-financial institution are saddled with
the sole responsibility of enhancing even growth in the economy and assisting
the small scale industries.
I.8
DEFINITION OF TERMS
Some of the words used in this research work have their meanings in the English
usage but are given contextual meaning in this research work. The words or used
will be given their contextual meanings:
Small Scale Industry: - Bearing in mined the literary
meaning of small-scale
industry, different authors have different views of what a small-scale industry
is. According to Kerelu F.N. (1990), a small-scale industry is one whose paid
up capital falls within the range of N750.000. The Nigeria Bank for
commerce and Industry (NBCI) which currently plays an active role in the
promotion of small scale industries defines a small scale industry as one
employing up to N500, 000. In most cases, the varied definitions
appeared the definition and the stage of development in which the definition
was employed. Generally, a small-scale industry is defined, as one which is
owned and managed by one or two persons, influenced by the family in decision
making, has no undifferentiated organizational structure, market share is small
and employs less than fifty (50) persons. The National Economic Reconstruction
Fund (NERFUND) defines small-scale industries as one whose annual turnover is
less than five hundred thousand Naira (500,000) as a small-scale industry. To
National directorate for Employment (NDE) defines small scale industry to
include projects with capital investment of below five hundred thousand naira
(500,000) and a staff strength of three (3) persons.
Role: For the purpose of this study role should mean
and
includes all parts
played and exhibited by financial institutions.
Loans: This is the transfer of fund from one economic
entity to another who
must be repaid with interest over a stipulated period of time.
Credit: The word credit comes form a Latin word “Cred”
meaning “I believe”. It
means the ability to command the capital of another in return for a promise to
repay as specified in the future.
Finance: This is concerned with available money and
capital goods for
investment in industries to boost production.
Industrialisation: This could be defined as a strategy
through which more
industries are encouraged to spring up.
Money: Money can be defined as anything which i9s
generally acceptable in
a given society or locality as a means of exchange and for settlement of debt.
Short Term Loan: This is a source of fund, which has a
short period of maturity
usually less than a year.
Period of Maturity: This is the time in which money
borrowed is due for
repayment to the lender with the accrued interest if any.
| Department | Business Administration and Management |
| Project ID Code | BAM0349 |
| Chapters | 5 Chapters |
| No of Pages | 103 pages |
| Methodology | Chi Square |
| Reference | YES |
| Format | Microsoft Word |
| Price | ₦4000, $15 |
|
|
|
| Contact Us On | +2347043069458 |