THE IMPORTANCE OF FINANCIAL INSTITUTION IN THE DEVELOPMENT OF SMALL SCALE INDUSTRIES
This chapter defined the meaning of financial institution, how they perform their function on the small scale industries and how they help them to regulate their business. It tells us the meaning of the small scale industries and the historical background of the small sale industries how they perform their function in the development of the Nigeria economy.
1.1 BACKGROUND OF THE STUDY
Its due to mention the ways of entering into business venture by bringing already established business while the other way is to start a new business. In other case, the entrepreneur need some prior business depends on answering the following question correctly:
a) Do I have the financial requirement of the business intended to establish?
b) Where can I obtain the finance need for the establishment?
c) The availability of collateral securities to obtain loan from banks.
d) What is my financial record with banks?
e) What type of business ownership do I involve myself?
f) Do I have the experience for the management of my business?
g) How large is the business going to be?
Your answer should be useful in determining how much working capital you will need. Its most people apply the term small scale business to be the local corner delegestore, bakers shop, road side machine etc. this may be accurate enough for general use since small firms operation on this scale in Nigeria.
But most of this small business fold up even before they gain acceptance some if the problem that could course business failure whether it is necessary for someone to go into business are –
i. Lack of Finance – Due to the fact that finance are needed for initial capital as well working capital. It is necessary to have enough finance to enable the business to give a better stand due to lacks of collateral security to obtain loan from the banks lead to the failure of some business.
ii. Managerial Ability – Some entrepreneur have now managerial ability that is they have low future vision which make business to collapse.
iii. Going into business with little or no Experience.
iv. Lack of Research – Planning in without first resting the trouble water or a small scale.
v. Failure to keep complete and accurate records which the business will require to successful operations.
vi. Failure to understand changing economic conditions. Due to my observation the major problems of small scale business is of finance. Because of lack of finance many business have died with their aims and objectives without creating and impacts and the society through the establishment of financial institutions some of the problems have being solved.
1.2 OBJECTIVE OF THE STUDY
All researchers of project without aim and objectives will be meaningless. The aims of this extended essay is to find out the role of the financial institution in the development of Nigeria economy and to create awareness of sub-sector. The study will also find out what contributed to the general failure of the small scale business and what are the solution to the problems in term of financial economic sector and personal effect.
1.3 SIGNIFICANCE OF THE STUDY
i. The significance of this essay is to serve as a reference point to the researchers, caption of industries government as well as students who are intended in knowing the importance of financial institution in the development of small scale industries.
ii. The researchers have acquired information about what small scale industries is, the importance and the problem associated with small scale industries in Nigeria.
iii. Another significance of this research work is to encourage small scale industries on how to promote the business.
iv. It also serve as a reference to the researcher that discover the ways in which government contribute immensely for the development of small scale industries.
1.4 SCOPE AND LIMITATION
The researcher would focused on the study of small scale industries in Nigeria i.e. problem facing the sector are of the constraint was that of time to scope with both class work and that of project work. As a result of that, time was shared between class works and project research works. Since project limiting is not the course that quantify the research for the reward of national diploma in business studies.
Also lacks of financial resource serves as one of the limitation in carrying out this research. The cost of transportation and other expensive activities undertaken in carrying out this future studies on the subject.
More so without financial support from the government there is no way that small scale industries can progress.THE IMPORTANCE OF FINANCIAL INSTITUTION IN THE DEVELOPMENT OF SMALL SCALE INDUSTRIES