Introduction
1.1 Background Of The Study
It is necessary to stress the point that to succeed in business require some measure of discipline. Most industrialists expect to make a reasonable profit from the investment of time and resources that they have to make in other to bring a project to function.
While this may sound simple enough, the bother line is the fact in an economy wide context, the rate or level of reward that can accrue to various level of effort, discipline and productivity should never be allowed to get out of proportion in relation to effort put in.
Experience has shown that industrial pursuits have been found to yield for the patient and disciplined industrialist rather than stand for business concern with all kinds of effort mostly unproductive and require no legitimate effort to reap profits in multiple fields.
After considering the above mentioned statement of facts about industry. The question is how far are we from being industrialized bearing in mind that it yields for disciplined and patient industrialist, all things being equal.
Taking cognizance of the fact that a step forward is the beginning of a mile. Some, therefore Nigeria’s business industrial evolution will only start when positive steps are taken towards adequate financing of small scale business. The experience of newly industrialized countries has been an eye opener.
Finance is the greatest obstacle we are likely to face whenever we talk of establishing a small scale industry. This is the most crucial aspect of business enterprise and a lot of controversy surrounding the problem of inadequate finance. A close look on the small scale industries/business, all over the country would help to throw further light on the effect of lack of fund on growing business. The drastic effect is mostly felt when one tries to study the rate at which our young industries are gradually collapsing. Even surviving ones are terribly looking for assistance that they are not sure of.
Funds are scare, hence the growing industries as regarded in this part of the world as never-do-wells especially Nigeria. When an economy is shaky, growing industries in that economy tend to suffer most and usually stand the taste of time. Hence, an increase in the number of causalities in this regard.
The researcher aimed at exploiting the possibilities, obstacles of financing small scale business/industries. The project centers on management and financial obstacles
1.2 Statement Of Problem
There are various obstacles facing the establishment of small scale business like financial limitation, lack of raw material, poor management and quality of the management, staff, poor accounting method, high interest charge on loans and lack of adequate planning and feasibility studies.
The most common and problematic issues is funding. Small scale business find it difficult to obtain fund from established institution like commercial banks and because of the some projects have take off but had to be abandoned half way. The issue involved is the question of capital adequacy.
When a company is under capitalized it cannot realize its full potentials. Many small scale enterprises in Nigeria experience this obstacle. They cannot expand their scale of production to optimum level.
To ameliorate these obstacles therefore government should implement the law or policy that made to enhance small scale business (especially that of in fact once) such as central bank policy that direct all commercial bank to give out some percentage of loan to small scale business than those of medium and large scale industries/business.
1.3 Objective Of The Study
The purposes of this study include:
- To ascertain the present economic state of the life’s of small scale business with the view to identify the major obstacles that affect the financing of small scale business bearing in mind the adequate financing stands as an energizer to its operations.
- To determine what strategies employed by the surviving and successful ones among them toward alleviating these obstacles.
- To ascertain the extent to which the financial institution has helped to develop small scale business.
1.4 Research Questions
This issue will not be treated in isolation taking into cognizance the level of development in Nigeria. Based on this, questions were asked by the researcher, which include:
- What are the present economic states of life’s of small scale business with the view to identify the major obstacles that affect the financing stands as an energizer to its operations.
- What are strategies employed by the surviving and successfully ones among them toward alternating these obstacle.
- How does the financial institution help to develop small scale business?
1.5 Hypothesis Formulation
The following hypothesis is relevant and necessary for the carrying out this research
- Ho: Lack of adequate finance has contributed to the failure of economic state of lives of small scale business.
Hi: Lack of adequate finance has not contributed to the failure of present economics state of lives of small scale business. - H0: There is failure in strategies employed by the surviving and successful one among them toward alternative these obstacle.
Hi: There is no strategies employed by the surviving and successfully one among them toward alternating these obstacle - H0: Financial institution has contributed to the failure of small scale business.
Hi: Financial institution has not contributed to the failure of small scale business.
1.6 Significance Of The Study
The significance of this research is that the result will help identify how business loan are obtained or secured both locally and internationally from financial institutions. On this note awareness is being created or it will help to create it on how fund or finance could be raised to finance small scale business.
1.7 Scope Of The Study
The area would have been the study of all the small scale business in Nigeria but however, this would have posed some threats to the researcher. Among them were the lacks of adequate fund to meet the rising cost of research. Unavailability of sufficient books by Nigerian authors in the area of small business and its obstacles. Also the problem associated with the collection of data.
Consequently, the study is specially design to examine the obstacles of Garri processing industry at Abakpa Nike, Enugu towards getting financial assistance from financial houses.
