Problems Of Financing Small – Scale Interprises In Nigeria

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This study is under taken to explore some of the problems often encountered by small scale industrialists in Nigeria with special reference to small scale enterprises in Nigeria.


The study annually looked into the various firms of finance used by the small-scale business.  This research work is so by the federal government to improve small scale enterprises in the country.


This subject is discussed in five chapters.  The first chapter among other things introduced the background of the study, statement of problems, the purpose, significant, limitations and the definition of terms.


Chapter two is a review of various literatures related to the topic


Chapter three discussed how research was carried out which present the researcher’s methodology.


Chapter four discusses the findings.  While chapter comprises the summary, recommendation and conclusion.



Title page

Approval page





1.0            Introduction

1.1            Background of the study

1.2            Statement of the problem

1.3            Purpose of the study

1.4            Significant of the study

1.5            Limitations

Definition of terms


Literature review


3.0            Research methodology

3.1            Research methodology

3.2            Sources of data

3.3            Secondary data

3.4            Method of data collection

3.5            Data analysis




Summary, recommendation and conclusion 















          Finance has been identified as one of the major factors for the development of small scale Industries in Nigeria.  For the establishment of a small scale business in Nigeria, the first factor to be considered is the availability and source of fund for setting up the industry, small scale business is an organization that can be measured by various characteristic and some of these are its sales volume, capital investment, ownership structure and the member of paid employees.

Small scale industrial sector occupies a very significant place in the industrial sector of this country there are basically two broad categories of small scale industry.  The first are those carried out by additional craftsmen and artisans, some of them might need assistance to moderise their skills.  Tools and techniques of production.  The second are those carried out by groups of small manufacturing enterprises which produce a variety of consumer and sample producer goods.


The small scale industry has been given different definition by different people and authorities at different times.  However, the level of capital employed remains a relevant criterion for identifying the small scale industrial operation.  Based on the general motion in the third National development plan 1976 –1980, a small  scale industry means an industrial undertaking involving total investment of up to but not exceeding one hundred and fifty thousand (150,000).

Small scale industries are given different definitions both by NBCJ and CBN policy the Central Bank of Nigeria based on the federal government 1988 budget defines a small scale industry in case of Merchant Banks as one with limit of capital investment of two million Naira (N2m) capital cost of land, or one with a maximum turn over of five Million Naira (N5m) and for the commercial banks, it is an enterprises with annual turnover not exceeding five hundred thousand naira (N500,000).

Additionally, the small scale industries division of the federal ministry of commerce and industry defines a small-scale industry “as establishment with capital investment holding totaling two hundred and fifty thousand naira (N250,000) with between 50 – 150 employees”?  But judging from the recent industrial policy guideline, small scale unites means industries with capital outlay of between one hundred and two hundred thousand naira (N100,000 and N200,000) excluding land and building but including working capital.3

Having examine the various definitions with regards to the concept of small scale business,  it is deemed necessary, for the purpose of this study to provide a basic framework by adopting a more common definition.  Small scale industry can be defined as one which I independently owned and operated.

For many centuries our people had been involved in the management of small-scale business.  The art of trade by barter is an example if small scale business which had been in existence even before the advent of large corporations.  In our traditional secreties where the head of a house hold cultivates some crops for use and then sells the remaining to those who need them can be looked at as a small scale business, though a crude form of small scale management.  Since he has to maintain the farm invest some capital in the form relations or brought

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