Entrepreneurship is as old as Nigeria
and had contributed to the growth of the economy. Presently in Nigeria,
SMEs assist in promoting the growth of the country’s economy, hence Commercial
Banks and all the levels of government at different times have policies which
promote the growth and sustenance of SMEs.
project examined the role of commercial
banks to the development of scale industries in Nigeria. It also identifies the
marketing problems of SMEs and entrepreneurships in Nigeria, direct financial
assistance to SMEs and the establishment of finance institutions to support
SMEs. It identifies the roles of SMEs in Nigeria’s development and growth.
It discusses the entrepreneurial thoughts, problems and advance practical
Survey design was employed with the use of a well
structured questionnaire. Respondents were selected based on simple random
sampling technique. Hundred (100) staff
of commercial banks were sampled.
Two hypotheses were formulated and tested with the
use of Chi-Square analysis. The analysis resulted to rejecting both hypotheses
and hence accepting the two alternate hypotheses.
Based on decisions of the tested hypotheses
conclusions were reached that Commercial Banks contributes
towards performance of Small scale business enterprises and The availability of
credit facilities contributes to the survival of small business enterprises. Recommendations were proffered to SMEs, Commercial Banks and the Nigerian
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
1.2 Objectives of the Study
1.3 Statement of the Problems
1.4 Research Question
1.5 Statement of Hypothesis
1.6 significant of the Study
1.8 Scopes and Limitation
1.9 Organization of Work
1.10 Definition of Terms
TWO: LITERATURE REVIEW
2.2 Sources of Fund to the Small Scale
2.3 Operation of Government Programmes for
2.4 The Role of Commercial Banks
2.5 Problem of Small Scale Enterprises
Associated with Commercial Banks
Problems Associated with the Government
2.5.3 Problems Associated With Small
3.2 Sources of Data Collection
3.3 Study Population
Sample Size and Sampling Technique
of Research Questions
of Research Hypotheses
of Data Analysis
3.8 Validity and Reliability of
the Research Instrument
3.9 Limitations of the Research Method
CHAPTER FOUR: DATA PRESENTAION AND ANALYSIS
Analysis Of Personal Characteristics of the
Analysis Of Response of
Respondents to The Problem Areas.
4.3 Testing of Hypotheses
4.3.1 Test of
4.3.2 Test of Hypothesis Two
CONCLUSION AND RECOMMENDATIONS
The expected impact and potential contribution of
Small-Scale enterprises on broad and diversified production base as well as
their accelerated effect in achieving macro objectives pertaining to full
employment, income distribution and the development of local technology makes
the existence of small-scale enterprises most inevitable. They are particularly
most conducive for diffusion of management skills and stimulation of indigenous
However, we need to examine what really are
Small-Scale enterprises and how does a firm or Company qualifies to be one.
Definition of Small-Scale enterprises is not
constant, it depend on a large extent on a country's level of development. What
was a large-scale in 1950 may now be regarded as small-scale today. Probably
due to differences in policies focus different institutions in Nigeria
apply various definitions, which are considered below.
Central Bank of Nigeria in its credit guidelines to
banks in case of Commercial banks, small-scale enterprises are those with
annual turnover not exceeding N500.000.
In the Federal Ministry of Industries' guidelines
to Nigerian Bank of Commerce and Industry (NBCI), small-scale enterprises are
defined as those with total cost not more than N500.000. (Excluding cost of
land but including working capital. The NBCI in its regular operation has
adopted the definition of small-scale enterprises as those with cost of capital
not in excess of N750.000 (excluding cost of land but including working
The Centre for Industrial Research and Development
(CIRDO at Obafemi Awolowo University, lie Ife, defines as small-scale those enterprises
with total assets in Capital equipment, plan* and working capital not exceeding
N250.000 and employment not more than 50 full time workers.
The Nigeria Industrial Development Bank (NIDB)
defines as small-scale, enterprises with project cost (Investment and Working
capital) not exceeding N750.000.
There is also the problem of whether the
"Small-Scale Industry" can be used for manufacturing and trade. For
the purpose of this work, both will be used interchangeably. Small-scale
enterprises therefore comprise of: family business, sole trader. Artisans, coltage
industries, small shops, mechanic workshops, etc.
These types of industries can be classified into
three categories as follows:
1. Organised non-manufacturing firms, such as
those involved in transportation, repair shops, construction and other service
2. Non-organised firms such as artisans.
3. Small manufacturing firms.
1.2 STATEMENT OF THE PROBLEM
The need for small-scale enterprises in acting as
catalyst to the development of the Nigerian economy cannot be overemphasized.
They assist in the development of local technology, they provide an effective
means of stimulating indigenous entrepreneurship and lastly, small-scale
enterprises provide greater employment creation per unit of the capital
Despite the immense contribution of small-scale
enterprises, they have most of the time failed:, due to inadequate working
capital, which restricts the productive capacity of small-scale industries
thereby leading to their demise. They suffer from insufficient funds in funding
their business operations especially the purchase of raw materials.
These small-scale enterprises are also restricted
the access to institutional credits. They are unable to meet the lending requirement
of the commercial banks due to improper record keeping and inadequate capital
base. They are therefore made incapacitated and most of the time thrown out of
business due to financial stagnation.
it is on this note that this research work tends
to examine the role of commercial banks to the development of small scale industries in Nigeria
and proffer suggestive solutions to this problems
1.3 PURPOSE OF THE STUDY
The purpose of this research study is to identify
the problems hindering the development of small-scale industries, especially
those associated with commercial banks. It will also identify some suggestion
and recommendation on the ways these problems can be overcome.
It will also identify ways which the role of
commercial banks in the development of small-scale enterprises can be improved.
research in the process of analysis of data, suggested the following questions.
Do commercial banks contribute towards
organizational performance of Small Scale business?
What are the roles of small business
enterprise in economic development?
To what extent is the availability of credit facilities contributing to the
survival of small business enterprises?
What is the impact of commercial banks
on the performance of small business enterprises?
5. To what extent, have commercial bank been
funding the small scale enterprises?
6. To what extent, the sources of funds that are commonly used by small scale
7. Can funds from commercial
banks alone play significant role in the development of small-scale
8. how did
government monetary policies influence the services of commercial banks towards
1.5 RESEARCH HYPOTHESES
Ho: Commercial Banks do not contribute towards
performance of Small scale business enterprises
H1: Commercial Banks contributes towards
performance of Small scale business enterprises.
Ho: The availability of credit facilities do not
contribute to the survival of small business enterprises.
H1: The availability of credit facilities
contributes to the survival of small business enterprises..
1.6 SIGNIFICANCE OF THE STUDY
The importance of small-scale enterprises in the
promotion of economic development has -always been at the forefront of
development strategies. This, in the second development plan (1969 - 1974) 6dth
the Federal and State government move to actively support and promote the
development of small-scale industries in this National Development Plan (1975 -
1980), government explicitly stated the main objective of the programme for the
development of smallscale industries as the creation of employment
opportunities, mobilization of local resources, reduction in rural urban drift
and more even distribution of industrial enterprises in different parts of the
country. In the budget speech by General Sani Abacha, the Head of State
emphasized that the development of small-scale industries would be encouraged
At the end of this research work, anybody that is
opportuned to come across it should be able to know:
1. Importance of small-scale enterprises to
the development of the Nigerian economy.
2. Identify problems hindering the development
of small-scale enterprises especially those associated with commercial banks.
3. Ways in which these problems can be solved.
4. Identify ways in which role of 'commercial
banks is the development of small scale enterprises can be improved.
The fact that small-scale enterprises have the
potentials of creating employment and reducing unemployment, increasing the
production of exportable goods, make it more relevant to Nigeria that is having major
problems in the area of unemployment, export and balance of payment.
1.7 RESEARCH METHODOLOGY
For the purpose of achieving the objectives of
this study, data would be collected from both primary and secondary sources.
The primary source will entail gathering of
information from industrialists using questionnaires 'and direct. interview
where necessary. While the secondary source will entail extensive use of
Central Hank of Nigeria (CBN) annual reports, journals and publications and
textbooks, relating to the small scale industrial sub-sector of the economy
Date collected from all sources will be analyzed
using tables and percentages for these will allow for easy analysis of data.
1.8 SCOPE OF THE STUDY
The study will focus mainly on the role of
commercial banks in the development of small-scale enterprises in Nigeria.
Since the banking sector is one of the major institutions in the process of
economic growth, it is important to study the role of a major unit of the
banking sector, i.e.; commercial banks in the promotion of smallscale
enterprises and the focus would be in Nigeria.
OF THE STUDY
The small scale industries sampled does not
represent a comprehensive and true view of all the small-scale industries in Nigeria.
This is as a result of our inability to reach all the small-scale, industries
concerned. As a result, only a sizeable number of small-scale industries in Lagos state were been used
and generalization made using these industries.
There is also time constrain as this study is
limited to a specific short period of time.
The issue of finance cannot be over-looked as we
lacked the sufficient financial resources needed for a thorough research.
OBITAYO K. M. Government Industrial
Policies in Respect of Small & Medium Enterprisesiln Nigeria BULLION Vol. 15 No. 3, Central Bank of Nigeria, Lagos
OLASHCRE O. Role of Commercial Banks
in Financing Small & Medium Enterprises in Nigeria.
The Nigeria Accountant, July/Sept. 1985
SOLE E. I. K. Small Scale Industries
in Nigeria: Concepts,
Appraisal of Govemment Policies & Suggested Solutions to Identified
Problems Economic and Financial Review, Vol. 24 No. 4, Central Bank of Nigeria, Lagos.
OYEJIOEA. & SOYODEA Commercial
Banking in Nigeria
Unibadan Publishing Consulting, 1986