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CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

Nigeria financial institutions have over the years given support on various developments projects across the country. (Agbo 2010) In line with this, they were suppose to have givien such financial assistant to small scale industries to enable them hence their administrative structure and industries have over the years been hampered by insufficient capital, lack of know how, lack of education, bad debts, low turnover and detracting scale, etc. The problem in this study therefore is to determine and ascertain the extent of the contributions of financial institution in the activities of small-scale industries. The purpose of this study is to analytically appraise the contribution to the growth of small-scale industries through the financial institution in Nigeria.

In order to critically carryout this purpose, the researcher’s primary concerns is to examine the type of role, which financial institutions play towards the development of small-scale industries. Also examine the contributions of financial institutions to small-scale industrial activities.

1.2 RATIONAL OF THE STUDY

For any economy to grow and develop, there is need for small-scale industries to exist. I n developing countries like Nigeria, one of the ways of allocating the problems of economic development is through the establishment of local manufacturing industries. These industries mainly depend on the local raw materials and manpower for it’s efficiently. Small-scale industries fall into this category since they largely depend on local resources; they have better potentials for uninterrupted development than the enterprises, which depend on, imported resources. Development of small-scale industries could help to facilitate the bridging of the gap between the urban and rural areas in terms of development and brings about society.

1.3 SIGNIFICANCE OF THE STUDY

The findings of this research, which benefit both the banks and the community. The study will highlight the role banks and other financial institutions played towards the development and growth of small-scale industries.  The financial industries provide loans and other financial facilities to small-scale industries thereby making them a growing firm. Their return in the small scale industries to the loans the acquired from them, again the employ people thereby reducing the effect of unemployment in our society.

1.4 BACKGROUND INFORMATION ABOUT THE STUDY

In Nigeria, economic growth and development have been hampered due to our inability to manage indigenous firm/industries. We should understand that for any economy to grow and develop, there is need for small-scale industries to exist. Small-scale industries has been defined as the willingness and ability of an individual to seek out investment opportunities, establish and run out an enterprises successfully. But this can be achieved with the assistance of financial need and security. Financial institutions provides loan to small scale industries which the invest to produce goods and services efficiently to meet the needs and desires of Its customers, again they maximize profit thereby providing desired growth for the firm and protecting the interest of owners.

DEFINITION OF TERMS

Analysis: Separation or breaking up with elements.

Control: Regulate.

Found: Money available for a purpose.

Fiscal Policy: The way or measure in which the government controls  The government controls the circulation of money in the economy.

Feasibility: An investigation to determine whether a particular Project, system is desirable, practicable

Income: Money received during a given period.

Investment: Putting money into business.

Policy: Documented strategy employed to achieve the economic objective of a government.

Profit: Gains, excess of income over expenditure.

Research: Investigation in order to discover fact.

Sector: Division of economy that has a unifying characteristics From other aspects of the economy.

Security: Collateral for a loan by a barrower or document concerned with such collateral.

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