ROLE OF COMMERCIAL BANKS IN FINANCING SMEs IN NIGERIA A CASE STUDY OF FIRST BANK PLC


Content

 

ABSTRACT

This study discusses the Role of Commercial Banks in Financing SME in Nigeria

(A Case Study of First bank Plc) and whether Commercial Banks Assist SMEs in achieving productivity in Nigeria.

 

 

TABLE OF CONTENTS

PAGES

Title page                                                                                                    i

Certification                                                                                                         ii

Dedication                                                                                                  iii

Acknowledgement                                                                                                iv

Table of contents                                                                                        v

Abstract                                                                                                      vii

 

CHAPTER ONE: INTRODUCTION

1.1            Background of the Study                                                                            1       

1.2            Statement of the Problem                                                                           2

1.3     Research Questions                                                                          2

1.4    Objective of the Study                                                                      2

1.5            Significance of the Study                                                                            3

1.6            Statement of Hypothesis                                                                            3

1.7            Scope of the Study                                                                                     4

1.8            Definition of Terms                                                                           4

 

CHAPTER TWO: REVIEW OF LITERATURE

2.1     Overview of Small and Medium Scale Enterprises                                     5

2.2     The Growth of SMEs and the contributive Schemes in Nigeria                  7

2.2.1  The Nigeria Bank for Commerce and Industry (NBCI)                     7

2.2.2  The Central Bank of Nigeria special Credit Programme for Small and Medium Scale Enterprises (SMEs)                                                       7

2.2.3  World Bank facilities for Small and Medium Scale Enterprises                 9

2.3     The Nigerian Financial System                                                                   10

2.4     Bank Loans to Small and medium-sized Enterprises                        12

2.5     The Financial Crisis and SMES                                                                  14

2.5.1  Corporate restructuring and financial structure of SMEs                           16

2.5.2. Credit crunch in the financial crisis and bank loans to SMEs           17

2.5     Theoretical Framework                                                                     19

2.6     Historical Background of First Bank Nigeria Plc.                                     21

References                                                                                         24

 

CHAPTER THREE: RESEARCH METHODOLOGY

3.0     Introduction                                                                                     26

3.1     Study Area                                                                                       26

3.2     Research Design                                                                                27

3.3     Population of the Study                                                                    27

3.4     Population Size and Technique                                                                  28

3.5     Data Collection Method                                                                            28

3.6     Data Analysis                                                                                   28

3.7     Limitation                                                                                        29

 

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND

                                  INTERPRETATION

4.1     Bio Data of Respondents                                                                           30

4.2     Tables Based on Research Questions                                                         35

43.     Research Hypothesis                                                                        39

 

CHAPTER FIVE:  SUMMARY, CONCLUSION AND

RECOMMENDATIONS

5.1       Summary of Findings                                                                     43

5.2       Conclusion                                                                                     43

5.3       Recommendations                                                                          44

References                                                                                      45

BIBLIOGRAPHY                                                                         46

APPENDIX                                                                                    48

 

 

CHAPTER ONE

INTRODUCTION

1.3            Background of the Study

Small medium enterprises (SMEs) are considered the backbone of economic growth in all countries. They play an important role in Nigerians economic growth, as they constitute 97.2% of the companies in Nigeria .They also contribute to national development by positively influencing the distribution of income in both functional and nominal terms. In emphasizing the importance of SMEs, Rogers, 2014, stated; they enhance  capacity building as they serve as entrepreneurial training avenues ; they  create more employment opportunities; per unit of investment because of their labour intensive operations; they achieve a much more relative high value added operations because they  are propelled by basic economic activities that depend mostly on locally sourced raw materials; they provide feeder industry services as they serve as major suppliers of intermediate goods and components to large-scale industries as well as major agents for the distribution of final products of such industries; they provide opportunities for the development local skill and technology acquisition through adaptation. Despite the catalytic role of SMEs in the economic emancipation of countries, some of their major operational challenges in Nigeria include financial problems. About 80% of small and medium enterprises are stifled because of poor financing.

The research intends to appraise the impact of commercial banks in the financing of SMEs in Nigeria, with a case study of first bank plc.

1.4            Statement of the Problem

Despite the significant role of SMES, they are largely affected by lack and insufficiency of funds to operate and expand their businesses. In view of this commercial banks in Nigeria play financial roles towards meeting the capital and operational funds required by SMES

1.3 Research Questions

1.       What is the nature and roles of SMEs?

2.       What is the nature of the financing problem of SMEs?

3.       What is the role of commercial banks in financing SMEs in Nigeria?

4.       What constitute the financing options of first bank to SMEs in Nigeria?

1.4    Objective of the Study

1                   To appraise the nature and roles of SMEs in Nigeria

2                   To determine the role of commercial banks in financing SMEs in

Nigeria

3                   To appraise the role of first bank in financing SMEs in Nigeria.

 

1.9            Significance of the Study

The study shall highlight the significance of SMEs to the economy

The study shall analyze the roles of commercial banks in financing SMEs in Nigeria

The study shall provide financing options offered by first bank plc to SMEs in Nigeria.

The study shall serve as a veritable source of information to managers and consultants

 

1.10       Statement of Hypothesis

1                   H0      SMEs  is not significant to the economy

H1      SMEs is significant to the economy

2                   H0      The financial challenge in SMEs is high

H1      The financial challenge in SMEs is low

3        H0      The impact of first bank in financing SMEs is low

            H1   The impact of first bank in financing SMEs is high

 

 

1.11       Scope of the Study

The research shall appraise the role of commercial banks in financing SMEs in Nigeria.

It shall elucidate the nature and significance of SMEs as well as analyze the financing challenges of SMEs in Nigeria.

1.12       Definition of Terms

SME:

In Nigeria, the small and medium industries Enterprises investment scheme (SMIEIS) defines SMEs as any enterprise with a maximum asset base of N200 million excluding land and working capital and with a number of staff employed not less than 10 or more than 300.The federal ministry of commerce defines SMEs as firms with a total investment (excluding cost of land but including capital) of up to N750,000, and paid employment of up to fifty person, employee relationship, labour intensive operation, simple technology, fusion of ownership and management and limited access to capital.

 

 

 

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