1.0 Introduction
1.1 Background of the Study
The concept of self reliance has occupied a place in the literature of economic development over the years in Nigeria and other countries of the world. The establishment of small bsuienss is profitable and can lead to industrialization if effectively and efficiently managed. This depend on how one has perceived, planned for and operated the small scale business that will make for existence, survival and possible growth of the business.
However, the capital resources needed for the commencement and running of a business is at the heart of all enterprises and until an entrepreneur identifies the ways of raising funds for financing the new venture, his ideas or plans may best be described as wishful thinking or a dream. The most important factor that could make or break a business is finance and businesses are evaluated in terms of their financial worth. Both big and small enterprises need adequate capital not only to get started, but also to grow, expand and meet competition and changing market or consumer needs and tastes.
Therefore, it is pertinent to say that the role of capital in the growth and success of small scale business is vital as funds are necessary for the smooth running of any business firm. The advantages claimed for small scale enterprises are various including the encouragement of entrepreneurship, the greater likelihood that small scale enterprises will utilize labour intensive technologies and thus have an immediate impact on employment generation; they can usually be established rapidly and put into operation to produce quick returns. The growth and development of small scale enterprises is seen as accelerating the achievement of wider economic and socio economic objectives, including poverty alleviation.
for the small industrial credit scheme, fund for small scale industries has remained largely inadequate and of little effect.
1.2 Statement of the Problem
The small scale industry is acknowledged in have huge potential for employment generation and wealth creaton in any economy. However, the sector is faced with problems of inadequate capital, mismanagement of funds, limited access to capital, lack of managerial skills and inadequate modern machinery equipment.
Small scale businesses are not able to take business ventures with high yielding potentials because of the numerous problems in obtaining adequate fund. This financial problems hampers all important objective of the business.
Against this background, this study focuses on the role of capital in the growth of small business in Nigeria.
1.3 Objective of the Study
The objective of this study is as follows:
To identify the prospects of financing small scale business in Nigeria.
To identify and consequently analyze the most effective and efficient way through which small scale enterprise could be financed and promoted.
To examine the financial support given to small scale enterprise in Nigeria.
To know whether effective financing of small scale enterprises can enhance business growth.
1.4 Significance of the Study
The relevance of this study lies basically on its contribution to knowledge and its benefits to individuals and organizations.
This study will be academically important to many students who may want to carryout further research on the role of capital in the growth of small scale business in Nigeria and will also serve as a guide to the government for advancing better policies towards improving and encouraging small scale business in the state and nation at large.
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