THE ROLE OF BANKS IN INDUSTRIAL DEVELOPMENT OF NIGERIA 2
Nigeria since the oil boom in the early 80’s has been a victim of a monolithic economy and since then has been enjoying the so-called petro maira without adequately evolving a sound policy that that will keep the nation’s economy in a firm foundation steady growth. Through the country recognized the important of industrialization as far back 1982 yet when the petro maira started flouring in they were blinded folded as to ignore the important of establishing industries to ensure a diversified economy, now the need for diversified economy become the subject matter of many governmental policies and activities. This leads us to one of the many for solving the problem and that is industrialization.
Industrialization is synonymous with the production of goods and services for the benefit of this work, an industry could be defined as the total sum of firms producing a particular commodity. Commodity here includes goods and services that we have the banking industry, the food processing industry the sugar processing industry, the tobacco manufacturing industry etc.
Therefore industrialization is the act of establishing different types of industries in the country for the purpose of establishing the nation’s economy and ultimately improving the standard of living of its citizens.
Industrialization has been proved beyond doubts as very important for a nation’s survival therefore, it is pertinent that we explicably manifest how the role of bank can be employed for the development of these industries, in doing this we will to an extent limit our study to small and medium scale industries which to my our are very important to the economy, small scale industry as defined by the central bank credit guidelines is any manufacturing or services enterprises whose annual business turnover does not exceed (N500,000) the role of banks in industries development of Nigeria could be seen through the various services which these banks provides for the sustenaries of industrialization in the country.
These services many includes the provision of capital for those industries in the form of loans which the industries could use to finance fixed asset. Also the banks provides award ref facilities which are necessary to finance the working capital of the business. Apart from granting loan and overdraft facilities, these are other roles which banks could play in the industrial development of Nigeria. Those roles are professional advice, leasing and factoring also extent into involve discounting, hire purchase, bill discounting.
1.1 BACKGROUND OF STUDY
The background of study of the topic project is to emphasizing on the role which banks plays in order to improve the growth of industries in Nigeria by explicably, manifesting how the role of banks can be employed for the growth and development of industries it also emphasizes on the role in which banks play in the industries development of Nigeria, as it could been seen through the various services which these banks provides for the sustenance industrialization in the country.
1.2 STATEMENT OF PROBLEMS
The problem inherent in this study topic can be discussed under the following headings:
I. ESTABLISHMENT FINANCE:- The prospective industrialization needs money the form of capital required to establish the industry. In Nigeria this has been the problem of most prospective industrialists wishing to convert a very plan into actions and results.
2. INDUSTRIAL KNOWLEDGE OF INDUSTRIALIST:- In many situations, the problem which industrialist face includes the lack of adequate knowledge required for the establishment and profitable running of an industrial venture.
1.3 OBJECTIVE OF STUDY
The major purpose of this study are listed below.
1. To determine the role of banks in industrial development of Nigeria
2. To determine how banks help in accelerating the industrial development of Nigeria and
3. To determine how banks plays other role like professional advice, leasing and factoring invoices discounting, hire purchase etc. in the industries.
1.4 SIGNIFICANCE OF THE STUDY
In this project work, some of the important beneficiaries may includes:
a. The various industries in Nigeria
b. The production or business sector
c. The economy in general
d. The banking industries
The factures, which effects the role results, which the investigation must, recognized and acknowledgment are at time constraints, lack of information, and lack of research facilities.
1.6 DEFINITION OF TERMS
An industry could be defined as the sum total of firms producing a particular commodity here includes goods and services.
Small-scale industry is defined by the central bank credit guideline as any manufacturing or services enterprise whose annual business turnover does not exceed N500 (five hundred thousand naira).
An overdraft is an arrangement whereby the banks allow the customer to overdraw his account up to a certain limit and within a specified period of time so long as the customer agrees to bring the account bank to a credit position at the end of the period.