SOLD BY: THE ROLE OF MONEY DEPOSIT BANKS IN FINANCING SMALL SCALE BUSINESS
(A CASE STYDY OF UNITED BANK FOR AFRICA PLC NASARAWA BRANCH)
ABSTRACT
This research work focus on the role of
money deposit bank in financing small scale business and United Bank for
Africa Nasarawa branch as the case study. The primary objective of this
study is to examine the impact and contributions of money deposit bank
in financing small scale business in Nigeria. The research work
contained five chapters that gives a clear explanation of the role of
money deposit bank in financing small scale business. Chapter one deals
with the introduction, background of study, statement of problem, the
significance of the study as well as limitation of the study. The
researcher took time to review same related literature and theoretical
framework that have direct relation with the study of small scale in
chapter two. Chapter three, the research design and method in which the
research work are being collected. Chapter four, gives a clear data
presentation as well available analysis of the tabulated data. Finally,
summary of findings, conclusion and recommendation are drawn in chapter
five.
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Small-scale business has been an
important element in this country’s drive towards a self-reliant
economy. This is based on the legalization that small-scale enterprises
are desirable worldwide; hence, it is an avenue for reducing the rate of
unemployment in the country and there by contributing to the Gross
Domestic Product (GDP) of the nation. In the developed countries today,
technological advancement was due to the establishment of small-scale
business and industries.
Small-scale enterprises are considered
as a pivot for technological takeoff and self-reliance of any nation. In
the commercial world, there are various kinds of business undertakings.
These business activities range from the private enterprise to public
corporation. According to Central Bank of Nigeria Monetary policy and
programs, circular to commercial and merchant banks define small-scale
business as:
Those with annual turnover not exceeding
500000. According to the Industrial Research Unit of university of Ife
defined a small-scalebusiness as One whose principal assets in capital
equipment, plant and working capital are less than 250000 and employing
fewer than 50(fifty) full time worker.
1.2 STATEMENT OF THE PROBLEM
In Nigeria and perhaps throughout the world, the importance of small-scale business cannot be over emphasized.
However, the small-scale enterprise
sub-sector is seriously affected by structural problem. These include
inadequate capital, ‘Infrastructural deficiencies, Lack of technological
knowledge and local market. These problems have hampered the
development of small- scale business in Nigeria.
Another problem is the massive
unemployment, rural-urban migration, poverty and over dependence on the
foreign countries. The increasing relation of the fact that the engine
of development of the country is to be found within the country’s
capacity.
The rationales for advocating
small-scale industrialization is that capacity requirement are small and
there for within the reach ofindigenous entrepreneurs. Small-scale
industries create employment, use of more local raw materials and use of
low level of technology.
1.3 OBJECTIVES OF THE STUDY
A study into the impact and contribution
of commercial banks in financing small-scale business in Nigeria is
important. In view of the contribution commercial banks make to the
development growth of any nation’s economy, the specific aims and
objectives of this research hopes to address issues as:
- To examine the impact and contribution of commercial banks in financing small-scale business Nigeria
- To explore further ways of supporting small-scale business in Nigeria
- Identify the major obstacle militating against the development of small-scale business in Nigeria.
1.4 RESEARCH QUESTION
The researcher has related in his
research topic that is “The Role of money deposit Banks In financing
Small-Scale Business” and can now come up with the following questions
to be answered in the course of this research
- Is there any need for commercial banks to finance small scale business?
- Do money deposit banks encounter problems in providing finance for small scale business?
- Has money deposit banks improve the nature and operation of small-scale business?
- Is there any significant role small-scale business play to the development of the nation economy?
1.5 RESEARCH HYPOTHESIS
Ho: money deposit banks do not make any significant contribution towards the financing of small-scale business.
Hi: money deposit banks contribute significantly towards the financing of small-scale business in Nigeria.
16 SCOPE OF THE STUDY
This research work is designed to cover
the contribution of money deposit banks in financing small-scale
business in Nigeria. But due to the large number of commercial banks in
the country, the study is restricted to United Bank for Africa (UBA)
Nasarawa branch only.
1.7 SIGNIFICANCE OF THE STUDY
The importance of the study is to seek
and direct government effort, stimulate and promote economic growth,
develop local technology and to also generate employment. No doubt that
this work would be of benefit to a host of stake holders in the
small-scale enterprise scheme, especially the owners (promoters) and
employees of business organization, the students, the government,
investing financial institution and the general public.
THE OWNERS
The owners or promoters of a business
organization are free to approach any bank of their choice for the
purpose of accessing these cheap funds that does not attract interest.
It encourages them byigniting development and promotion of
entrepreneurship skills. Banks become partners as equity shareholders of
the company and their technical and financial expertise are exhibited
for the business to grow.
EMPLOYEES
Employees are all interested in their
wage settlement in the sense that with more working capital at the
disposal of the organization. It would mean a favorable opportunity for
higher productivity at the same time the profitability of the firm would
increase and in effect guarantee the job security of the employee.
GOVERNMENT
The government or policy maker seem to
be the major beneficiary as a result that sound management policy affect
good governance and attract the maximum support of the government. As
capacity building in the economy improves, the productivity increase
thereby improving the standard of living of the citizenry and reduce the
nation’s social problems such as insecurity due to youth restiveness.
GENERAL PUBLIC
The overall interest of the general
public is the testing point of every economic tool and are also expected
to benefit as good policies affects the public positively and vice
versa.
1.8 LIMITATION OF THE STUDY
The study proves more difficult than
earlier anticipated; at the beginning of this research work limited
difficulties were encountered. However, during the course of the study
more problems were encountered. One of the problems encountered was with
regards to the nature of respondents. In some cases it was difficult to
meet the manager and were there was success in meeting them in person
it was difficult for them to give prompt attention to the researcher.
Another problem encountered was fear entertained by some respondent that
the government would use the information obtained from them one clay.
This was particularly experience during oral interview of the
respondents.
1.9 DEFINATION OF TERMS
CAPITAL: According to
Anyeale (1993) in his book titled “comprehensive economics” defines
capital as the wealth or property that can be used to produce more
wealth. It also refers to the fund invested in a business.
BANK: Section 61
of Bank and Other Financial Institution Decree (BOFID) defines a bank as
the business of receiving deposit on current account, savings account
and other similar account, paying or collecting cheque drawn by or paid
in by customers, provision of finance or such other business as governor
may by order publish in the gazette designate as banking business.
COMMERCIAL BANK: According
to Osubor J. U. in his book “Business Finance and Banking in Nigeria”
commercial banks are a nation’s most important financial institution in
the sense that their performance of services are unique and are
distinguished from other forms of financial institution.
FINANCIAL INSTITUTION:
Ekeziel ES (1993), “The Element of Banking” defines financial
institution as an institution that provide funds to organization to meet
their financial obligation.
FUND MANAGER: These are companies set up and registered with
Securities and Exchange Commission (SEC)
and Corporate AffairsCommission for the purpose of managing investment
in viable small-scale industries on behalf of banks.
SCHEME: This is the policy reform introduced by the government to carry out equity investment under the small-scale industries.
REFERENCE
Aina,T.A and AT Salau (1991), “The challenges of Sustainable Development in Nigeria”, Ibadan nest publication.
Anderson, D (1982), “Small scale industry in developing countries” New jersey: John Willy and son’s publisher
Anyeale, J.U. (1991), “Comprehensive Economics”, A Johnson publishers LTD, Surulere Lagos.
Ekezie, ES (1993), “The element of banking” Africana Feb-publisher LTD Onitsha Nigeria
Osubor, J.U (1984), “Business Finance and Banking In Nigeria” New Africana publisher Co ltd Owerri.
No comments:
Post a Comment