Problems Of Financing Small Scale Enterprises In Nigeria

Problems Of Financing Small Scale Enterprises In Nigeria

Chapter One Preface

Background Of The Study

Finance has been linked as one of the major factors for the development of small scale diligence in Nigeria. For the establishment of a small scale business in Nigeria, the first factor to be considered is the vacuity and source of fund for setting up the assiduity, small scale business is an association that can be measured by colorful characteristic and some of these are its deals volume, capital investment, power structure and the member of paid workers.

Small scale artificial sector occupies a veritably significant place in the artificial sector of this country there are principally two broad orders of small scale assiduity. The first are those carried out by fresh tradesmen and crafters, some of them might need backing to moderise their chops. Tools and ways of product. The alternate are those carried out by groups of small manufacturing enterprises which produce a variety of consumer and sample patron goods.

The small scale assiduity has been given different description by different people and authorities at different times. still, the position of capital employed remains a applicable criterion for relating the small scale artificial operation. Grounded on the general stir in the third National development plan 1976 – 1980, a small scale assiduity means an artificial undertaking involving total investment of over to but not exceeding one hundred and fifty thousand( 150,000).

Small scale diligence are given different delineations both by NBCJ and CBN policy the Central Bank of Nigeria grounded on the civil government 1988 budget defines a small scale assiduity in case of Merchant Banks as one with limit of capital investment of two million Naira( N2m) capital cost of land, or one with a maximum turn over of five Million Naira( N5m) and for the marketable banks, it’s an enterprises with periodic development not exceeding five hundred thousand naira( N 500,000).

also, the small scale diligence division of the civil ministry of commerce and assiduity defines a small- scale assiduity “ as establishment with capital investment holding totaling two hundred and fifty thousand naira( N 250,000) with between 50 – 150 workers ”? But judging from the recent artificial policy guideline, small scale unites means diligence with capital disbursement of between one hundred and two hundred thousand naira( N 100,000 and N 200,000) banning land and structure but including working capital.3

Having examine the colorful delineations with respects to the conception of small scale business, it’s supposed necessary, for the purpose of this study to give a introductory frame by espousing a more common description. Small scale assiduity can be defined as one which I singly possessed and operated.

For numerous centuries our people had been involved in the operation of small- scale business. The art of trade by trade is an illustration if small scale business which had been in actuality indeed before the arrival of large pots. In our traditional secreties where the head of a house hold cultivates some crops for use and also sells the remaining to those who need them can be looked at as a small scale business, though a crude form of small scale operation. Since he has to maintain the ranch invest some capital in the form relations or brought from the request, he buys or produces his husbandry tools and also hires labour for the planting and harvesting of the crops, he’s intentionally engaging in a small scale business.

There are thousands of business units operating in the country moment with the maturity being in the small scale business order – they’re generally possessed by a single existent known as trade procurement and some of the cooperation business are operated on a small scale base. Some will end up in ruin, others will end when the proprietor get a letter job away some small scale business short having problems from their very morning due to the quantum of capital invested by the proprietor. This is because incontinently the uniting capital is used up, the business is finished.

Statement Of The Problem

Small scale business aren’t suitable to take business gambles with high yielding capabilities because of the multitudinous problems in carrying acceptable fund this fiscal problems hampers all important objects of the business, its growth and survival. This study is aimed at relating these problems and determining to what extent these problems could be answered for the overall weal of small business in the state in particular and the nation in general.

also, it’s an attempt to know why despite all the good programs formulated by the government for the backing of small scale assiduity they still have problem of growth and development. It’s stopgap that by the end of the whole study the problem facing small scale artificial credit backing in the country will be linked and possible result proffered.

Purpose Of The Study/

This study is principally aimed at the following

i) To examine the backing of small scale diligence in general and an aid to profit maximization and increase in the position of employment.

ii) To accomplish a general evaluation of, and assess to what extent the government and other fiscal institutions have helped through the provision of fiscal backing to the assiduity.

iii) To make suggestions and recommendations that would be useful in working the linked problems