CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
For any economy to remain afloat in its bid for survival in today’s globalization, deregulation and liberalization of markets, it needs to have an efficient business financial to direct the allocation of its resources, capital markets and institutions, of which the development is an integral part of paramount importance in a dynamic economy as Nigeria.
Capital market is a market for securities (Equity or debt), where business enterprises and government can raise long-term funds. It is also defined as a market in which money is provided for period of longer than a year, as the raising of short term funds take place on market e.g. Money market. The capital market includes stock market (equity securities and bond market, debt). Securities and Exchange Commission (SEC) oversees the capital market in their designated jurisdiction to ensure the investors are protected against fraud among other duties.
Nigeria is still grapping with the problems of low earnings with its attendant balance of payment problems, weak technological industries base resulting in massive importation of machinery and raw material, high rate of unemployment.
Actually, the economic turn down which started in 1978 is very much with us. The decline in Gross Domestic Product (GDP) from N26.9 billion in 1984 to N3.6 billion in 1985 marked the beginning of importation of the world’s cast away goods into our country making Nigeria a dumping ground.
Small scale business is the only way to boost export and redress the gloomy of balance of payment deficit.
Nigeria government recognized this fact in 1971; small scale industries credited scheme was introduced and followed up with the establishment of Nigeria Bank for commerce and industry in 1978. The Central Bank of Nigeria also introduced its small scale business.
Despite all these measure, it is still obvious that small scale business problem is funding. And the actual fact, the growth of the small scale business still centre on proper funding which is missing today.
Capital market is seems as an alternative way of raising funds. The enhancement of an advance and vibrant capital market can lead to utilization of financial resources. The developed capital market also provides access to the foreign capital for domestic industry. In this way, capital market plays a constructive role in the over-all development of an economy generally.
1.2 SIGNIFICANCE OF THE STUDY
Capital market has a great interest to the researcher which will help in increasing g my knowledge and skills. Also, this sector of the economy is one of the important factors and also plays a significant role in the natural economy.
A developed, dynamic and vibrant capital market can immensely contribute for speedy and economic growth and development.
