BANK RECAPITALIZATION AND SMALL AND MEDIUM SCALES ENTERPRISE IN NIGERIA

BANK RECAPITALIZATION AND SMALL AND MEDIUM SCALES ENTERPRISE IN NIGERIA

Abstract

This study looked at small and medium-sized businesses and bank recapitalization in Nigeria. There aren’t many financial institutions that can meet the long- and medium-term lending needs of the economy’s firms. SMEs are not an exception to this rule, and they suffer greatly from a lack of funding for growth and expansion necessary for the nation’s economic existence. Chi-square analysis was used to tabulate the acquired data. The statistical program for social sciences (SPSS) was used to analyze the field data in order to improve data collecting and produce precise and useful study-related information. Results of this study demonstrate that increased funding for SMEs is a result of bank re-capitalization. It is clear that lending programs exist for small- and medium-sized businesses. It is clear that before making a loan, the bank must do a feasibility analysis of the proposed project. Small and medium enterprises equity investment schemes (SEMEEIS) have been demonstrated in organizations to positively impact SSE and the economy at large. Similar to that, the loan that was given to it helped the company expand. Market expansion has resulted from bank recapitalization. Banks adhere to the CBN’s standards, which provide that they must reserve 10% of their profit before tax for SSEs, in order to provide SSEs with the minimal amount of credit. The study comes to the conclusion that the recapitalization program implemented in Nigeria significantly increased bank capital as well as restored customer confidence, which in turn improved commercial transactions. To maintain the effectiveness of the banking and recapitalization policies in the Nigerian banking sector, the report advises The Central Bank of Nigeria (CBN) to establish a stronger banking supervisory department. To make financing more affordable, interest that scares away people with good business ideas should be decreased to a manageable level.It is important to eliminate any administrative obstacles that prevent operators of small and medium-sized businesses from accessing funding. All other commercial banks should urgently be required to adhere fully to banking norms and regulations by the Central Bank of Nigeria. In order to prevent investing in unproductive projects, prospective business operators should do in-depth feasibility studies to assess the profitability of any proposed business.