ABSTRACT
This research examines the role of commercial Banks to finance
small-scale industries using Unity Bank Plc as a case study, questionnaire were
administered to company staff collection of data and analysis of data were
used. Also testing of hypothesis chi-square formula was used because it enables
the researcher to know the relationship existing between the variance tested.
The researcher recommends among others that proper financing of small-scale
industries could boost management effective and efficiency with accurate and
timely decision making.
TABLE OF CONTENT
Title page
---------------------------------------------------------------------i
Certification------------------------------------------------------------------ii
Dedication--------------------------------------------------------------------iii
Acknowledgment------------------------------------------------------------iv
Table of
content------------------------------------------------------------v-vi
Abstract ----------------------------------------------------------------------vi
CHAPTER ONE: INTRODUCTION
1.1
Background to the Study-------------------------------------------1
1.2
Statement of the Study---------------------------------------------2
1.3
Research Question --------------------------------------------------3
1.4
Research Hypothesis --------------------------------------------------
3
1.5
Purpose of the Study ---------------------------------------------------4
1.6
Scope of the Study -----------------------------------------------------4
1.7
Significant of the Study------------------------------------------------5
1.8
Limitation of the Study------------------------------------------------5
1.9
Operational Definition of Terms ------------------------------------6
CHAPTER TWO: LITERATURE
REVIEW
2.1 Introduction
------------------------------------------------------------9
2.2 Origin of Banking
-----------------------------------------------------10
2.3 Types of
Banks----------------------------------------------------------11
2.4 Definition of Commercial Banking
--------------------------------12
2.5 Functions of Commercial
Banks------------------------------------13
2.6 Importance of Commercial
Banks----------------------------------16
2.7 Internal Problems Faced by Commercial Banks-------------18
2.8 Solution of the Problem--------------------------------------------20
CHAPTER THREE: INTRODUCTION
3.1 Research Design -----------------------------------------------------27
3.2 Population of the Study--------------------------------------------27
3.3 Sample/Sampling Techniques-------------------------------------27
3.4 Data Collection/Analysis-------------------------------------------28
CHAPTER FOUR: DATA PRESENTATION AND
ANALYSIS
4.1 Presentation of Data--------------------------------------------------30
4.2 Data Analysis----------------------------------------------------------36
4.3 Interpretation----------------------------------------------------------31
4.4 Discussion-------------------------------------------------------------41
CHAPTER FIVE: SUMMARY
5.1 Introduction-----------------------------------------------------------43
5.2 Summary of Finding-------------------------------------------------43
5.3 Conclusion------------------------------------------------------------43
5.4 Recommendation-----------------------------------------------------44
Reference
Appendix I
Appendix II
CHAPTER ONE: INTRODUCTION
1.1
BACKGROUND TO THE STUDY
For many developing
countries in Africa, Nigeria inclusive, rapid development means rapid
industrialization. Nigeria as a developing country needs a maximum increase in
its standard of living for this to be accomplished, there has to be
co-ordination between government financial policies and implementation on one
hand and practice of our financial institution.
Various countries have
adopted different approaches when it’s comes to process of industrialization.
For a programmatic rapid industrialization, the government of Nigeria has
adopted several policies that will enable forceful and productive small-scale
industries.
The guest for small-scale
industry came about as a result of numerous problems such as lack of capital,
balance of payment problems etc. The Nigeria government is making a generous
effort to encourage investment in small-scale sector of the economy.
In respect of the above,
the research work will critically examine the development of small-scale
industries growth using Unity Bank Plc as a case study.
1.2
STATEMENT OF THE PROBLEM
In Nigeria a lot of
handicap is evident when establishing small-scale industry due to some
important parameters, which are considered necessary if small-scale industry is
to grow and function efficiently.
One of the problems is
shortage of capital for the development of small-scale industries. The much
need financial support from the financial institution in Nigeria is a veritable
instrument for sustainable small-scale industrial development. This could be
achieved through a consistent granting of soft loans will less stringent
collateral security of something near interest free funding of viable project.
However, higher demand for collateral security and higher loan interest has
constituted a major hindrance to the development of small-scale industry in
Nigeria.
1.3
RESEARCH QUESTIONS
i.
Are
Commercial Bank faced with problem of poor organization.
ii.
Does
inadequate capital deter Commercial Banks from growth?
1.4
RESEARCH HYPOTHESIS
For the purpose of an in
depth study, the research adopted the following hypothesis stated in a null and
alternative format.
Hypothesis (I)
Ho: Commercial Banks are not faced with the
problem of poor organization.
Hi: Commercial Banks are faced with the
problem of poor organization.
Hypothesis (II)
Ho: Inadequate capital for Commercial
Bank to operate will not make it difficult for them to grow.
Hi: Inadequate capital for Commercial
Bank to operate will make it difficult for them to grow.
1.5
PURPOSE OF THE STUDY
The provision of sufficient
and less expensive finance to business needs to be addressed. Here, this study
is aimed at achieving the following objectives.
Ø To list the various source of finance
available to small-scale industries.
Ø To examine the role of Commercial
Banks in reaching the need of small-scale industries.
Ø To know other better ways of
obtaining financial assistance by small-scale business through borrowing from
Commercial Banks and other financial house.
1.6
SCOPE OF THE STUDY
The study will entail
Commercial Banks operations. How Commercial Banks can be improved upon and what
they can do to reduce their over-growing bad and doubtful debts. This study
will concentrate on Unity Bank Plc, Auchi as a case study. We shall also review
small-scale business such as sole proprietorship and partnership.
The contribution of
Commercial Bank in financing small-scale industries. The limitation and
recommendation to overcome these limitations.
1.7
SIGNIFICANCE OF THE STUDY
This study is significance
in that it will help provide the right information to existing and intending
investors in the small and medium scale sector of the economy. The study will
help to expose the merits and demerits of utilizing the services of financial
institution in Nigeria. It will also assist the entrepreneurs investing in
small-scale business outlet. The study will also help the government to map out
plans and programmatic strategies on how to assist small-scale business to
grow.
1.8
LIMITATION OF THE STUDY
The problem faced by the
researcher is that of acceptance especially when dealing with certain group of
people, one requires a lot of explanation and persuasion to get the
co-operation of such respondent. Another problem faced is the non-challant
attitude of bank official to release certain document and information.
Inadequate
finance is another obstacle faced by the researcher in the course of writing
this study works.
1.9
OPERATIONAL DEFINITION OF TERMS
(i)
Commercial Banks:
These are Banks, which understand all forms of banking business. They
lend money to the general public and accept deposits as well.
(ii)
Bank:
A Bank is a business firm where money is received and paid, loan
negotiated and generate financial business transaction.
(iii)
Loan:
This is a
bulk of money given by bank to its customers or others that meets the bank
lending policies. It is a form of credit facilities to customers of the bank.
(iv)
Bank Overdraft: This is a Banking facility, which allows a customer overdraw
his account over and above what it contained. That is, a customer is allowed to
draw a cheque for a sum of money above his normal account balance and it is
only applicable to current account holders.
(v)
Sale Proprietorship: This is a kind of business
organization which is owned and managed by a sole individual.
(vi)
Investment: These are individuals who borrow money from Commercial Banks
to set-up a business with a view of making profits.
(vii)
Small-scale Industries: These forms of business organization
would limit to sole proprietorship and the partnership where capital is
provided by the organizer of the business.
(viii) Special Directive: This is an instruction by the Central Bank of Nigeria (CBN) to the
Commercial Bank regarding the size and the direction of bank lending due to the
economic situation.
(ix)
Creditors: This is a form of current liability whereby customers of
small-scale industry are indebted financially to the Commercial Banks.
(x)
Cheque: This is a written document instructing a bank to pay a given
sum of money to a named person or bearer at a specific period of time.
(xi)
Commercial Papers: This is an unsecured money instrument of promissory note
issued or sold in the money market.
(xii)
Bank Acceptances: This is used for companies engage in foreign trade.
(xiii) Trade Credit: This is the facility which is given
by the supplier in the normal course of business to a buyer to postpone payment
for a specified period of time.
(xiv) Discounted Bill: This is when a holder of a bill
decides to sell the bill at a price lower than the actual value, usually to a
bank or a discount house.
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