ABSTRACT
These research works aimed at examine the problem of financing the small and medium scale enterprises (SMEs) in Nigeria. The problems observed in the research work was that government should not involve in commercial and industrial enterprises, and also government should make favorable acquisition and allocation of funds to small and medium scale enterprises in Nigeria.
For the purpose of providing theoretical frame work and back-ground for the study, the researcher reviewed various literatures such as books, magazines, journals and unpublished past projects which directly related to the research work. Furthermore, a structured questionnaire was designed to collect data based on the review. . The role of government and financial institution, in the growth and development of the enterprises in Nigeria has not been encouraging in terms of capital.
Furthermore, keeping of financial records and maintain control would enable us to analyze performance and efficiency of production, to justify the use of fund and the ability to pay back and it would reveal the danger of high interest rate.
Base on the outcome, I therefore recommend that Nigeria government should intensify efforts in the growth and development of small and medium scale business by making adequate capital available and also making sure that the financial institutions comply by the directive given to the by lending at favourable minimum interest rate.
Furthermore, I recommend that adequate attention should be given to them (SMES) so that the benefits such as human, material and society development and unemployment reduction can be fully achieved.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND AND KNOWLEDGE OF THE STUDY
Financing Small Scale business involves the establishment and maintenance of business ventures. It will be ideal to make a brief analysis of what small scale business involves.
This ranges from services to manufacturing and repairs. One distinctive feature of small scale business is the capital adequacy which must be within the required minimum as required by the Company and Allied Matters Act of 1991 as amended and other legal requirements governing and regulatory various forms of business. Example, Bank and Other Financial Decree 1991 (BOFID) and Insurance Decree 1991.
v Service Venture: This encompasses professional services such as, Accountancy, Secretariat. Legal Services, it may also include liquidate and receivership, management constancy to mention but a few.
v Manufacturing Venture: This involves production of goods for local companies which may also involves the production of local equipment’s like form implements and machinery.
v Repairs and Maintenance: This plays a predominant role in the survival of both the repairs and maintenance plays a predominant role in the survival of both the large and small scale businesses. This ranges from the auto-mechanic and hi-tech maintenance, officer automation maintenance and repairs are not left out. The gathering pace of industrialisation in the North America and Western Europe in the early 19th Century, which had manifested to a gigantic venture, which the whole world cannot dare. In perspective is the Cable News Network (CNN) established by TED Turner in the United State of America, which started with about $5,000 Operating within a mini block of flat in the early ninety, could hardly manage the whole of the earth for its operations due to the rate of US expansion.
Growth in Nigeria Small Scale business has a restricted. Immediately after independent, the orientation of people towards work and earning a living with diverted to secure employment with the government or in the private sector; people were not encourage to establishing their own business and farming ventures were mainly subsistence.
Lack of education and enlightenment from the government is assured to have caused this problem. In the recent past, the unfavourable economic problem, which could be partially linked to the unstable political situation, stand as the major obstacle for the establishment and survival of the small-scale business and it has also brought about retarded growth to the existing ones.
The problem of unemployment and the need for self-sufficiency and self-actualisation necessitate the need for financing small scale business. The main problem for the establishment and maintenance of small scale business is finance. It has been observed that, many prospective investors do not know the types and source of financing available to them and other means of raising funds for the survival of their business. Some of the types of finance available to them are namely.
