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Product Category: Projects
Product Code: 00003084
No of Pages: 60
No of Chapters: 5
File Format: Microsoft Word
Price :
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ABSTRACT
This study was carried out to asses the accessibility of credit to
small and medium scale enterprises in Nigeria (SMEs) it aimed at assessing the
accessibility of SMEs to organized private sector credit facilities and
government institutional funds and credit scheme. A sample size of 100 SMEs in the study area
was drawn. Questionnaire and interview schedules were analysed in simple
percentage forms and tested with (spearman- rho correlation). The main findings
of the study are that the organized private sector credit facilities are
accessible to SMEs in
TABLE OF CONTENTS
Title Page
Certification i
Dedication ii
Acknowledgement iii
Abstract v
Table of Contents vi
Chapter One
1.0 Introduction 1
1.1 Background of the
Study 1
1.2 Statement of the
Problem 4
1.3 Objectives of the
Study 4
1.4 Significance of the
Study 5
1.5 Research Questions 5
1.6 Research Hypotheses 6
1.7 Scope and Delimitation
of the Study 6
1.8 Definition of Terms 7
References 8
Chapter Two
Literature Review 9
2.0 Introduction 9
2.1 Definition and Concept of Small and Medium Scale
2.2 Characteristics of SMEs 11
2.3 Role of SMES in
Industrial Development 12
2.4 Growth and Development
of SMEs 14
2.5 Main Sources of
Finance to SMEs 15
2.6 Problems of Accessibility of Finance to SMEs 17
2.7 The Role of Government in Financing and Promoting
SMEs 18
2.8 Role of CBN in
Financing SMEs 21
2.9 Prospects for the
Development Of SMEs 29
References 31
Chapter Three
Research Methodology 34
3.1 Introduction 34
3.2 Research Design 34
3.3 Population of Study 34
3.4 Sample and Sampling
Technique 34
3.5 Instrument of Data
Collection 35
3.6 Development and Validation Instrument 35
3.7 Administration of
Instruments 36
3.8 Method and Techniques
of Data Analysis 37
References 38
Chapter Four
4.0
Presentation And Analysis Of Data
39
4.1 Introduction 39
Chapter Five
Summary, Conclusion and Recommendations 45
5.0 Introduction 45
5.1 Summary of Findings 45
5.2 Recommendations 46
5.3 Conclusions 47
5.4 Suggestion for Further
Study 47
References 48
Bibliography 49
Appendix A (Questionnaire)
Appendix B (Analysis of the Questionnaire)
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The dynamic role of Small and Medium Scale Enterprises (SMEs) as
engine of growth in developing countries has long been recognized. According to
Ukeje (2004), it's accelerative effect in achieving macro economic objectives,
such as full employment, income distribution, development of local technology
as well as diffusion of management skills and stimulation of indigenous
entrepreneurship, have been well documented in economic literature.
SMEs in
This is the view held by Okongwu (2001), who states that SMEs
generate the industrial wealth of
It is in recognition of this role of SMEs as a veritable tool of
economic development that according to Deen (2003), government all over the
world have formulated comprehensive public policies to encourage, support and
fund their establishment and growth. Also, various Nigerian governments, to
some extent, have been involved in encouraging the conceptualization,
development, survival and expansion of SMEs (Osuagwu, 2001).
However, in playing their role as a catalyst of economic growth
and development, SMEs in
1.
Lack of adequate financing
2.
Incompetent management
3.
High operating cost
4.
Poor location
5.
Unstable socio-economic climate
6.
High labour turn-over, among others
Of all the problems which SMEs encounter in their day-to-day
struggle for survival, lack of adequate financing seems to be the most salient
factor to observe. This is the view of Nwana (1995) who observed that an acute
problem facing the SMEs is inability to raise enough fund to finance its
operations. Also in agreement with this, is the view of Osuagwu (2001) when he
states that lack of adequate financing is a common reason for SMEs failures.
The sources of finance open to SMEs include personal funds,
organized private sector funds, informal financial institutions funds,
government funds, customer financing, as well as trade credit from suppliers
and others. The most readily available of these funds to SMEs is the owner's
capital, which is usually insufficient to sustain the business, hence, the need
to source for external fund. Experience has shown that SMEs have difficulties
in producing external funds. The reasons for this are well documented in
economic literature, and include in particular the fact that lending
institutions regard them as high risk ventures and shy away from them (Okeke,
2001). According to Mbadiwe (2005), the financial system in
However, in
Government financial support given to SMEs comes in form of series
of programmes on small and medium scale industries financing through the
provision of “soft loan” by government owned development financial
institutions. It also include directives to commercial banks on the provision of
soft loan to SMEs. In addition, new lending schemes and credit institutions
such as the Small and Medium Industries Equity Investment Scheme (SMIEIS), Bank
of Industry (BOI), National Economic Reconstruction Fund (NERFUND), Nigerian
Export and Import Bank (NEXIM), National Directorate of Employment (NDE),
Nigeria Aqricultural and Cooperative Bank (NACB), amongst others and the World
Bank SMEs assisted loan scheme have also emerged at both the state and national
levels to boost the flow of fund to SMEs.
Unfortunately, inspite of all the available financial institutions
and the government's efforts in ensuring the flow of funds to SMEs, finance has
continued to remain a Major problem of SMEs in playing their role as an engine
of economic development. Many firms in this group had either ceased operations
or are operating for below their full capacity due to lack of adequate
financing among other factors. It is in view of this, that the researcher tends
to establish the impact of financing on the survival, growth and development of
SMEs in the challenging and dynamic
Poor capitalization, which seems to be responsible for the failure
of most SMEs in
Therefore, the need has become urgent to assess the access of SMEs
to external funding. This implies their access to organized private sector
funds, and government institutional funds and credit schemes. Inspite of the
acclaimed efforts to the organized private sector and the government to channel
funds to SMEs, there is not much on the ground to show for their efforts. This
is affirmed, in view of the poor performance of the SMEs and their continued
cry for financial assistance from both the organized private sector and the
government. This situation has given impetus to carry out this study to
determine the access which SMEs have to funding from the organized sector and
the government institutional funds and credit schemes.
1.2 STATEMENT OF THE PROBLEM
SMEs encounter various problems in their day-to-day struggle for
survival but their financial problem tends to overshadow others. The various
financial windows open to SMEs for sourcing funds appear not to solve their
problem of access to fund, hence the demise of many SMEs. The government and
the organized private sector claim of channeling funds to SMEs appear to
conflict with on the spot assessment of the performance of SMEs, as most of
them have performed very poorly, while a good number of them have been
liquidated as a result of poor financing. Hence, the problem is to determine
the accessibility of SMEs to external funding.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study include:
1. To determine the SMEs credit accessibility from the organized
private sector (namely: commercial banks, merchant banks, finance houses,
insurance companies and community banks).
2. To determine the extent to which government institutional funds
and credit schemes have contributed to accessibility of fund to SMEs in
3. To determine the impact of financing in the survival and growth
of SMEs in the
1.4 SIGNIFICANCE OF THE STUDY
The significance of the study include:
1. The result of the study are useful to the federal government in
improving its policies on credit accessibility to SMEs.
2. It will also assist the organized private sector in improving
their credit delivery system to ensure their accessibility to SMEs.
3. The findings would help owners of SMEs identify factors
responsible for their inability to have access to credits from both the
organized private sector and the various government credit.
4. The study will serve as a reference material for future research
work.
1.5 RESEARCH QUESTIONS
This study revolves around answering the following questions:
1.
To what extent has the organized
private sector credit facilities been accessible to the SMEs in
2.
To what extent has the government
institutional funds and credit schemes been accessible to SMEs in
3.
What are the factors militating
against credit accessibility of SMEs in
4.
What is the effect of funding on
the survival and growth of SMEs in
1.6 RESEARCH HYPOTHESES
On the basis of the problems of this study, the objectives of this
study and the research questions, the following hypotheses are therefore
formulated for testing:
1. H0: That organized private sector credit facilities are accessible
to SMEs in
H1: That organized private sector credit facilities are not
accessible to SMEs in
2. H0: That government institutional funds and credit schemes are
accessible to SMEs in
H1: That government institutional funds and credit schemes are not
accessible to SMEs in
1.7 SCOPE AND DELIMITATION OF THE STUDY
Since finance, time factor and manpower resources were not
sufficient to conduct a large-scale survey of credit accessibility of SMEs, the
study is delimited to the accessibility of credit facilities to SMEs from the
government institutional funds and credit schemes, and the organized private
sector in Surulere LGA, Oshodi/Isolo LGA, Ikeja LGA and Apapa LGA, all in Lagos
metropolist.
Since all the SMES in
This research study is limited to the use of administered
questionnaire and also restricted to a sample size of 100 incorporated SMEs
drawn within the scope of study.
1.8 DEFINITION OF TERMS
Capital Investment: Acquisition of plants for production purposes.
Commercialization: Conversion of a non profit-making public establishment to a
profit-making and self sustaining enterprise.
Credit Facilities: Various external source of funds e.g. loan, debt factoring,
customer financing etc.
Credit Schemes: Programmes put in place by government through which external
funds can be obtained with ease.
Diversification: Spreading of investments to reduce risk and or to be more
competitive.
Entrepreneur: A person who conceptualize a business enterprises or opportunities
establishes it, and nurse it to survival and growth.
Equity Financing: Investing fund in a business enterprise by taking up its shares
capital. Funding through part ownership.
External Funds: funds obtainable from organized private financial institutions
and government loan schemes, other than personal funds (savings).
Financial Funds: funds
Financial Window: Sources (organized private sector and government institutional
funds and credit schemes) through which external funds can be obtained.
Liquidate: To close down a business and use any money thus made to pay it's
debt.
Moratorium: The time frame to repay an externally sourced fund.
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