understudy is concerned with the problems, prospects as well and the sources of
finance available to small-scale business. The main purpose of this study is to
identify the various sources of finance available the prospects and
difficulties experienced by small-scale business in Nigeria, and hence advance
some feasible solutions to them. Small scale business financing in Edo State
and in particular has been problematic as a result of some factors. While
officials of the financial institutions have always expressed preparedness to
assist these enterprise on their part have continually accused away financial
institution of shying away from the responsibility of financing small scale
business in Nigeria. Perhaps this research attempts to reconcile these
divergent views using Esan North East of Edo State as an example, with an
intended population of sixty (60), adopting the use of questionnaires and
direct interviews as a means of data collection and subsequent analyzing the
data using chi-square. It is found that small-scale business does not receive
financial assistance from financial institution and lack of awareness of firms
and sources of credit and finance constitute problem in securing credit.
Conclusively, the underdeveloped nature of the economy can be said to be
significant affected the case of obtaining credits. Finally the fact is that
both the private sector and public sectors has a poor financial awareness.
TABLE OF CONTENTS
of Contents vi
Chapter One: Introduction
Background to Study 1
Statement of research Problem 2
of the Study 4
of Hypothesis(es) 4
of the Study 4
of the Study 5
of the Study 6
of Terms 7
Two: Review of Related Literature
of Small-Scale Business 9
of Small Scale Business 11
Types of Small –Scale Business 13
Small-Scale Business 15
2.6 Sources of Fund for Small-Scale Business 16
of sourcing funds in small scale business 19
of small scale business in Nigeria 21
Chapter Three: Research
Method and Design
Population of the Study 23
Sample and Sampling Technique 24
Method of Data Collection 25
Method of Data Analysis 25
Presentation, Analysis and Interpretation
Presentation and Interpretation 26
of Findings 44
Five: Summary of Findings, Conclusion and Recommendation
of Findings 46
5.2 Conclusion 47
5.3 Recommendations 48
Appendix I 50
Appendix II 51
TO THE STUDY
The opportunities to achieve wealth and personal
gratification through small-scale business have come to occupy an important
economic and cultural role in our society. Little or know attention has been
given to the development of small-scale business in Nigeria. Member of new business are
starting each day in Nigeria.
But few eventually succeed.
However, this project work is mainly concern with
the problems and prospects of financing small-scale business in Nigeria. It is
therefore important here to discuss some of the financial problems the
investors come across some of the financial problems the investors encounter in
trying to set-up a small-scale business.
According to Kotler (1975), he said that before
commencing a business, the new business, and producer should be aware of the
need for finance (this cover manufacturing, production and the provision of
goods and services).
Generally, small-scale business in Nigeria involves considerable risk of one kind or another.
This simply means that even if the finance has
set-up, it is not always certain that the business will be successful.
The proceeding chapters of this project will
highlight some of the main problems of financing small-scale business in Nigeria and the
possible solutions to them.
1.2 STATEMENT OF RESEARCH PROBLEM
Small scale business like larger ones need finance
to start up the business and also to run the business that is running capital.
A capital look at the establishment of small scale
business in Nigeria particularly the rural areas have suggested that there are
problems facing the growth and the start up of a business especially the area
This problem is based on the role small scale
business has to play in the development of the nation. The economic situation
(which is not very stable), low income per capital limits the savings. However,
the fact remains that low capitalization cannot easily be completely
This study has been set up to examine some of the
problems and prospects of financing small scale business. To enable them
eliminate some of these problems facing the public government, a cursory look
on financing a small scale business will be examined.
1.3 OBJECTIVES OF THE STUDY
enable this study solve the problem highlighted above, the following served as
the objectives of the study;
a. To ascertain a possible solution to the
problems of finance in small scale enterprise
b. Identification and analysis of the various
sources of capital available for obtaining start up as well as expansion funds.
c. Recommendations for government investments
and the financial policies of small scale business in Nigeria.
1.4 RESEARCH QUESTIONS
other to realize the aim of the study, the following questions are deemed
a. Is there finance in small scale business in
b. What problem do you encounter in securing
credit in financial institution?
c. Does financial institution has impact in
the survival of small scale business.
1.5 HYPOTHESIS FORMULATION
is not a problem facing small scale business.
HI: Finance is a problem
facing small scale business.
1.6 SIGNIFICANCE OF THE STUDY
At this time of the nation, questions for economic
recovery and self-reliance, the role of small-scale business in this regard can
not be overemphasized. There is no doubt that the result of this research will
be useful to prospective and existing small-scale firms in Nigeria by equipping
them survival strategies in a period of economic hardship.
Both public and private sector hopefully find this
work useful in all areas of financial management. Moreover, potential investors and other
individual wishing to establish small-scale business will also see this work as
a useful guide.
Furthermore, the study shall be beneficial to the
commercial banks and other financial institution as a reference frame in the
formulation of credit policy guide-lines towards the financing of small-scale
business. Commercial bank and government will also benefit from this work since
it will help them to review their existing criteria for granting loan.
Finally, if they are properly applied, small-scale
investors would have a significant step towards self-reliance in industrial
OF THE STUDY
The scope of this study includes; Objectives,
sources of finance and problems of encounter
1.8 LIMITATIONS OF THE STUDY
The limitations to this study are;
was in fact the most limited factor and this constitute a major problem in
carrying out effective and efficient research, for this reason, the job is
is another problem of the researcher, because the time short for the completion
of the project work was not sufficient. This was done to the facts that with in
this short time Limit, others academic work were carried out side by side with
Finally, the school system has make it difficult for
student to go out in search for information by granting exert for student.
1.9 DEFINITION OF TERMS
following terms are gotten from published materials and journals.
Credit: A sum of money lends to somebody to be repaid with
Scale: A set of numbers or
standard for measuring or comparing.
is the money gained from trade
trade which any human done to either living, it could be permanently or
are difficulties in business that needs attention.
is the provision and management of money in a business enterprise.
needed to start a business
is a place where money are kept for the purpose of transaction.
property of a company owned by the company e.g building.
is the amount of debt, which a business owes e.g loan.
put money to a particular business in order to make profit e.g buying of share.
groups of employee in a business organization.
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