investigated the impact of Access bank plc on the development of small and
medium scale industries in Makurdi Benue state. The study employed a survey
technique, making use of a structured questionnaire to gather information from
small and medium scale industrialists/entrepreneurs and senior officials of
Access bank of Nigeria plc branches in Makurdi local government area of Benue
state. Frequencies, percentages and charts where used to sort and describe the
data collected, while ordinary least squares (OLS) was used for hypothesis
testing. The results revealed contradictory submissions between small and
medium scale industrialist/entrepreneurs and bank officials as to the role
played by Access bank plc branches in Benue state in financing small and medium
scale entrepreneurs. Many small and mediums scale industrialist/entrepreneurs
expressed reservations in the nature of services rendered by the bank and
described it as unsatisfactory, while bank officials rated the services of the
bank in financing small and medium scale entrepreneurs high. The ordinary least
squares result reveals that statistically, there exist evidence to believe that
access bank plc plays a role in the development of small and medium scale
industries in Makurdi, Benue state. The study recommended that entrepreneurs
should set their priorities right in terms of starting an enterprise,
management and continuity of existence. This if achieved can bring confidence
to the subsector and reduce the stringent requirements of financial
institutions on small-scale businesses in terms of collateral security.
TABLE OF CONTENT
1.1 Background to the study
The role of commercial bank credit is very important in the development of entrepreneurship and Small and Medium Scale Enterprises (SMEs) in every nation. In recent global business environment, emphasis has shifted from the former giant corporations that had adorned the industrialized nations of the globe to the area of entrepreneurship. The break in this long tradition is due the recognition that to achieve an all encompassing participation in the production process, entrepreneurship has to be embraced by all and sundry.
Imafidon and Itoya (2014) contend that the relative importance of small scale enterprise in advanced and developing countries has led and would continue to lead to a reconsideration of the role of small scale enterprises in the economy of nations. The development of many countries is often measured by such indices as the level of industrialization, modernization, urbanization, gainful and meaningful employment for all those who are able and willing to work, income per capital, equitable distribution of income, and the welfare and quality of life enjoyed by the citizenry. The small scale industry is seen as a key to Nigeria's growth and alleviation of poverty and unemployment in the country (Imafidon and Itoya, 2014).
Given the importance of the small and medium scale enterprise in developing the economies of nations engaged in it, Aremu (2004) opined that promotion of such enterprises in developing economies like Nigeria is of paramount importance since it brings about a great distribution of income and wealth. Development of indigenous technology, speeds up the rate of social economic development, economic self-dependence, entrepreneurial development employment and a host of other positive, economic uplifting factors.
Imafidon and Itoya (2014) further revealed that the secret behind the success of a self-reliant strategy in any economy does not lie solely in any particular socio-political or socio-economic philosophy, but so much on people’s attitude to small enterprises. While some governments had formulated policies aimed at facilitating and empowering the growth and development and performance of the small scale enterprises, others had focused on assisting the small scale enterprises to grow through soft loans and other fiscal incentives in order to enhance the socio-economic development of the economy. The abundance of capital and the range of technologies available in the world expand, small scale enterprises need productivity increases through adequate financing if they are to maintain or increase their contribution to overall socio-economic development in developing countries like Nigeria.
Isa (2005) opined that despite the seminal role played by SMEs not withstanding its development is everywhere constrained by inadequate funding and poor Management. The unfavorable macroeconomic environment has also been identified as one of the major constraints which most times encourage financial institutions especially commercial banks, which most times encourage financial institutions to be risk-averse in funding small and medium scale businesses. In Nigeria every known regime recognizes the importance of promoting SMEs as the basis of economic growth. As a result, several micro-lending institutions were established to enhance the development of SMEs. Such micro credit institutions include the Nigerian Bank for Commerce and Industry (NBCI), National Economic Reconstruction Fund (NERFUND), the people’s Bank of Nigeria (PBN), the community Banks (CB) and the Nigerian Export and Import Bank (NEXIM), and the Liberalization of the banking Sector.