CHAPTER ONE
INTRODUCTION 1.1Â
Background of the Study
In both developed and developing countries, the small scale industry is seen as the vehicle for rapid industrialization, sustainable economic growth and development, poverty alleviation as well as the seed bed of innovation and employment generation. It goes without saying therefore, that small scale enterprises have the potential of becoming the engine of the economic growth in any country , July 8 2010). Because of this paramount importance of small scale businesses, there has been a pressing need for the involvement of banks in financing its development in Nigeria and Kaduna in particular.
This is due to the fact that banks loans constitute the most important source of institutional financing for both start-up and growing enterprises. It is the realization of this fact that made the government to establish various schemes and programmers in the past to enhance credit availability to small scale enterprise in Nigeria. In recent time now however, the Nigeria bankers committee in 1999, approved the scheme requiring all banks in Nigeria to set aside 10 percent of their profit before Tax (PBT) for equity development in small scale and medium scale industry. Despite these measures, many small scale businesses with economic potentials for growth often fail and close down due to lack of funds, insufficient working capital, lack of managerial experience and skilled labor, poor accounting records as well as lack of infrastructural facilities (central Bank of Nigeria: the billion, October/December 2004:58-b5)
