ABSTRACT
This work desires because of the need to know
the importance of impact of Commercial Bank lending to small-scale industries
both internal and external. The chapters one of this works lead us to the
introduction of this work, the definition of small—scale and its instruments.
They role the play and the Commercial lending securities. The chapter two led
us to the definitions of the term used by small-scale industries in borrowing
from the Commercial Banks The chapter three talks about the techniques use
small scale industries and how the techniques are being carried out. The
chapter four of this topic is talking about the presentation and analyzing of
data i.e. (how small-scale industries are presented in the society and how
people react to it whether positive or negative while the chapter five is all
about summary, conclusion and recommendations.
TABLE
OF CONTENTS
Title
Page - - - - - - - - i
Approval
Page - - - - - - - ii
Dedication - - - - - - - iii
Acknowledgement - - - - - - iv
Abstract - - - - - - - - v
Table
of Contents - - - - - - vi
CHAPTER
ONE
1.0
introduction - - - - - - 1-2
1.1
back ground of the study - - - - 2-3
1.2
statement of research - - - - 4
1.3
objective of the study - - - -- 5
1.4 research
question - - - - - 6
1.5
significance of study - - - - - 6-7
1.6 Scope of Study - - - - - - 7
1.7 Limitation of the Study - - - - 8
1.8 Definition of the Study - - - - 8-9
CHAPTER
TWO
2.0 Literature Review - - - - - 10
2.1 Introduction - - - - - - 11-13
2.1
The Concept of Small-Scale Industry - - 13
2.2
Objective of Small-Scale Industries - - 14
2.3
source of funding for small scale industry - 15-16
2.4 The
uniqueness of commercial bank lending 16-17
2.5
impact of commercial bank lending - - 17-18
2.6
forms of bank lending - - - - 18
CHAPTER
THREE
3.0 Research
Methodology - - - - 19
3.1 Introduction - - - - - - 19
3.2
Research Design - - - - - 20
3.3
Sources/Method of Data Collection - - 20-23
3.4 population and sample size - - - 23
3.5 sample techniques - - - - - 24
3.6 validity and reliability of measuring
instrument 25
3.7 Method of Data Analysis - - - - 25
CHAPTER FOUR
4.0
Presentation of Data and Analysis of Data - 26
4.1 Introduction - - - - - - 26
4.2
Data Presentation - - - - - 27-32
4.3 Analysis of Data
4.4 Interpretation of Results - - - - 32-34
CHAPTER
FIVE
5.0
Summary, Conclusion and Recommendations 35
5.1
Summary Findings - - - - - 35
5.2
Conclusion - - - - - - - 36-37
5.3
Recommendations - - - - - 37-38
References
- - - - - -- - 39-40
Questionnaire
- - - - - - - 41-42
CHAPTER
ONE
10 INTRODUCTIONS
From
observation, I have come to the understanding of one general thing in mind set
of people (i.e.) whenever the word “small” is mention, the minds of people race
to something or a picture not big, less important, not up to standard in
nature. This is the same in business, once small scale industry is being mention;
people looked down on it, yet forget to understand that every big thing starts
small.
However,
studies of modern economics have shown that it is difficult to maintain a
balance and sustainable economic growth by depending only on large business
organization. Small and large businesses are known to contribute significantly
in building a solid and vital economic base in both developed and developing
countries. Over the years, studies of management have often concentrated on
large organization with strict formed and impersonal relationship. The reason
for this obviously includes the high prevalent risk resulting from huge capital
investment and large-scale operation. In Nigeria, the term small-scale
business has got several definitions. The reason is that different countries
are at different level of developrnient, operating within different economic
conditions.
According
to bank of Commerce and Industry (NBC), small-scale business is a firm whose assets
does not exceed N750,000.OO, while Central Bank of Nigeria defines small-scale
enterprise as a firm whose assets does not exceed N 25 Million annually.
Therefore,
we will examine the uniqueness and the level of Commercial Bank credit to
small-scale industries, and then find out how adequate this credit has been in
solving the financial problems of small-scale industries.
BACKGROUND
OF STUDY
Osubor
and Okafor (2006) a Commercial Bank may be defined as a financial institution
which deals in money and credit and which some of which are repayable on demand
by cheques. Commercial Banks are limited habitability companies established for
profit as owned by shareholders. Commercial banks are the nations most
important financial institution. They are unique on the performance of service
and are distinguished.
Due
to the type of economic we find ourselves, the kind of leadership we have and
lack of trust among each other, Commercial Banks are now known for their
restrictive credit policy. This policy has made it rather impossible f -al ca1 industrial
foobiajn kins, which they require Tor their expansion and growth of their
business and economy. In a situation where loans are approved, the problem may
either be that the amount is not adequate or that the time of disbursement of
loan is not consistent with the time the loan is needed.
Commercial
Bank lending on small-scale industries have not been adequately faced. This is
because of their high interest rate on bank loans, their requirement for
collateral security and their understanding towards small-scale business.
1.2
STATEMENT OF PROBLEMS
Just
as human being are face with challenges every day, likewise business and
organizations will attempts of modernization of many primary industries1 standard
of operation have moved into the capital intensive stage for new industries to
be able to go into operation they need reasonable capital. There comes the
Commercial Bank.
The
application of Commercial Banks lending policies has denied the small-scale
industries the opportunity of using bank facilities for their growth. These
problems hindered the development of small-scale business in Nigeria they
include:
The
willingness of Commercial Banks in lending to the small-scale business.
Lack
of trust in small-scale business owners.
>
The inadequate assets base for securing loan and advances from banks.
1.3
OBJECTIVES OF THE STUDY
Due
to the type of economic we find ourselves, the kind of leadership we have and
lack of trust among each other, Commercial Banks are now known for their
restrictive credit policy. This policy has made it rather Impossible for
small-scale Industry to obtain loans, which they require for their expansion and
growth of their business and economy. In a situation where loans are approved,
the problem may either be that the amount Is not adequate or that the time of
disbursement of loan is not consistent with the time the loan is needed.
Therefore, the reason of this work Is to find out:
To
which level of Commercial Bank credit to small- scale industries.
To
the adequacy or inadequacy of Commercial Banks credit to small-scale
industries. To which extent is the Commercial Bank credit to small-scale
Industries. To offer solution and recommendation where necessary.
1.4
RESEARCH QUESTIONS
- What
are the main thing that brought about the uniqueness of the Commercial Bank?
i.e. the Impact of lending to small business.
- What
role can we say, the Commercial Bank has played In the growth of small-scale
industries? ) Is there any differently encountered by small-scale business in
obtaining loans from Commercial Bank?
- Development
of this small-scale Industry, are they playing any role in the growth of the
economy.
1.5
SIGNIFICANCE OF THE STUDY
The
objectives of the study include:
- EMPLOYMENT
GENERATION: Small business, provide self employment to majority of people
in our society. Thus, enabling them to become earners and responsible members
of the society.
- ENTERPRENEURSHIP
DEVELOPMENT: Small- scale businesses provide the training ground for
businessmen. Experience and skill development Is running successful small
business could be gainfully employed on large scale industry set ups.
- INDUSTRIALIZATION
OF RURAL AREAS: Small- scale Industries located on rural areas provides,
the base of industrialization. Because of low level of infrastructural facility
requirements small-scale industries survive easily In rural areas.
- LESS
FOREING EXCHANGE REQUIREMENT: Small-scale business requires less or no
foreign exchange. Most of their equipment are locally fabricated.
- RELATIVELY
LOW CAPITAL OUTLAY: small businesses do not require huge capital outlay
comparatively. At the same time they provide quick payback. They also provide a
degree of flexibility as they can easily adapt to changing in economic
conditions.
1.6
SCOPE OF STUDY
The
study will cover the activities of Lagans Venture, mind the glass and
Commercial Banks. This is necessary for the purpose of conveniences in cost and
information getting and time factors. The above Organization are located at No. 3 Ekerinah St. Aba and 186 Azikiwe Road Aba
respectively.
1.7 LIMITATION OF THE STUDY
For
efficient and effectiveness of the research work there are normally some
limitations on the work.
COST:
Also, due to high cost in everything cost becomes one of t him limitation of
the study.
1.8
DEFINITION OF TERMS
BANKING
LENDING: This Is a system by which Commercial Banks and other
financial institution extend credit facilities to their customers for the
purpose of business transaction, expansion and growth.
BANK LOAN: This is a fixed
amount lent by a bank to a customer on an agreed time on specific terms.
BANK
UNIQUENESS: This Is what differentiates Commercial Bank
from other Institution and that Is the ability to work with every other field
with out discrimination.
COLLATERIAL
SECURITY: These include an asset deposited with a bank as a replacement
in case of default from the customer.
SMALL-SCALE
INDUSTRY: In the 1991 credit guideline (Monetary Policy Circular
No 25), the Central Bank of Nigeria states that small enterprise for merchant
and Commercial Bank loans is defined as one whose capital investment does not
exceed N5 Million (excluding land arid working capital) or whose turnover is
not more than (N 25 MillIon annually).
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