IMPORTANCE OF FINANCIAL INSTITUTION IN THE DEVELOPMENT OF SMALL SCALE
This extended essay aims to appraise
the importance of financial institution in the development of small scale
industries in Nigeria.
The aim is to ascertain the importance of financial institution and how these
financial institution support the growth and development of small scale
industry. And the problems of small scale industries that makes them efficient
and how they are solve through the hedge provided by financial institution
through quality loan at subsidies rate, insurance etc. It is necessary to give
financial support to small scale business because of their great function they
perform in the economy. Finally, the extended essay do not down that the
content of this essay will eliminate all the problem that small scale business
has been facing. Its however, hoped that the department will take cognizance of
some of this essay and on them accordingly.
TABLE OF CONTENTS
Title page i
Approval page iii
Table of contents vii
Background of the
Objective of the
Significance of the
Scope and Limitation 6
TWO: LITERATURE REVIEW
Literature review 8
enterprises defined 8
small business enterprise
the economy 13
Contribution of small
scale industries to economy 15
Problems of small
Function of financial
Lending policies of
commercial banks 22
THREE: SUMMARY, CONCLUSION AND RECOMMENDATION
Summary of findings 27
chapter defined the meaning of financial institution, how they perform their
function on the small scale industries and how they help them to regulate their
business. It tells us the meaning of the small scale industries and the
historical background of the small sale industries how they perform their
function in the development of the Nigeria economy.
1.1 BACKGROUND OF THE
due to mention the ways of entering into business venture by bringing already
established business while the other way is to start a new business. In other
case, the entrepreneur need some prior business depends on answering the
following question correctly:
Do I have the
financial requirement of the business intended to establish?
can I obtain the finance need for the establishment?
The availability of
collateral securities to obtain loan from banks.
is my financial record with banks?
What type of business
ownership do I involve myself?
Do I have the
experience for the management of my business?
How large is the
business going to be?
answer should be useful in determining how much working capital you will need.
Its most people apply the term small scale business to be the local corner
delegestore, bakers shop, road side machine etc. this may be accurate enough
for general use since small firms operation on this scale in Nigeria.
most of this small business fold up even before they gain acceptance some if
the problem that could course business failure whether it is necessary for
someone to go into business are –
Lack of Finance – Due
to the fact that finance are needed for initial capital as well working
capital. It is necessary to have enough finance to enable the business to give
a better stand due to lacks of collateral security to obtain loan from the
banks lead to the failure of some business.
Managerial Ability –
Some entrepreneur have now managerial ability that is they have low future
vision which make business to collapse.
Going into business
with little or no Experience.
Lack of Research –
Planning in without first resting the trouble water or a small scale.
Failure to keep
complete and accurate records which the business will require to successful
Failure to understand
changing economic conditions. Due to my observation the major problems of small
scale business is of finance. Because of lack of finance many business have
died with their aims and objectives without creating and impacts and the
society through the establishment of financial institutions some of the
problems have being solved.
1.2 OBJECTIVE OF THE
researchers of project without aim and objectives will be meaningless. The aims
of this extended essay is to find out the role of the financial institution in
the development of Nigeria
economy and to create awareness of sub-sector. The study will also find out
what contributed to the general failure of the small scale business and what
are the solution to the problems in term of financial economic sector and
1.3 SIGNIFICANCE OF THE
The significance of
this essay is to serve as a reference point to the researchers, caption of
industries government as well as students who are intended in knowing the
importance of financial institution in the development of small scale
The researchers have
acquired information about what small scale industries is, the importance and
the problem associated with small scale industries in Nigeria.
of this research work is to encourage small scale industries on how to promote
It also serve as a reference to the researcher that
discover the ways in which government contribute immensely for the development
of small scale industries.
1.4 SCOPE AND LIMITATION
researcher would focused on the study of small scale industries in Nigeria i.e.
problem facing the sector are of the constraint was that of time to scope with
both class work and that of project work. As a result of that, time was shared
between class works and project research works. Since project limiting is not
the course that quantify the research for the reward of national diploma in
lacks of financial resource serves as one of the limitation in carrying out
this research. The cost of transportation and other expensive activities
undertaken in carrying out this future studies on the subject.
so without financial support from the government there is no way that small
scale industries can progress.