DEPOSIT MONEY BANKS AND THE GROWTH OF SMALL SCALE ENTERPRISES. A RESEARCH PROJECT TOPIC ON BUSINESS MANAGEMENT
ABSTRACT
This research work assessed deposit money banks and the growth of small scale enterprise. The objectives of this study is to examine the efficiency of SMEs in accessing adequate credit from DMBs in Nigeria, to determine the potential of DMBs’ credit in fostering SME growth; identify the challenges faced by SMEs in accessing finance from DMBs in Nigeria. Data were collected through questionnaire distributed to respondents. Simple percentages were used in presenting data while the chi-squared (X2) statistical technique was used to test the hypothesis. The result revealed that all the sampled investors in Small and Medium Scale Enterprises sourced their funds from personal savings, money lenders, thrift associations, friends and family members while a few sourced part of their working capital from banks. Equally it was observed that the factors that prevent SMEs from borrowing from Deposit Money Banks include lack of collateral, high interest rate, competition from other business, too many bureaucratic processes, poor financial plan, inability to pay previous loans and others. The work recommended that the Nigeria government should recognize the importance of SMEs and attach priority to the development of SMEs by encouraging the deposit money banks to assist them with loans because they constitute a major tool in boosting employment in the country. Also, For the deposit money banks to be more efficient under this area, the loan departments of every money deposit banks should assess each SMEs on its own merit to determine its viability and grant direct credit to each on the basis of the project’s viability without sacrificing credit standard.
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The role of commercial banks in the development of SMEs is vital to economic developments. It is acknowledged that the availability of financial capital is a pre-requisite for rapid development. Since efficient management of scarce resources are best facilitated by financial institutions (Myers, 1984). It therefore follows that banks have vital role. Things they do to small and medium scale enterprises among others by making their vast financial resources available for financial and promotes developments.
