Thesis Abstract

Abstract
Small-scale enterprises play a crucial role in the economic development of Nigeria by contributing significantly to job creation, poverty reduction, and wealth creation. However, these enterprises often face numerous challenges, with financing being one of the most critical issues. This study explores the problems of financing small-scale enterprises in Nigeria, focusing on the various constraints that hinder their access to finance. The research employs a mixed-methods approach, combining both quantitative and qualitative data collection methods. Data were gathered through surveys, interviews, and focus group discussions with small-scale entrepreneurs, financial institutions, and government agencies involved in SME financing. The findings reveal that small-scale enterprises in Nigeria encounter various financing challenges, including limited access to formal financial institutions, high interest rates, collateral requirements, and insufficient financial literacy among entrepreneurs. Moreover, the study identifies the lack of credit information infrastructure, inadequate government support, and regulatory bottlenecks as major obstacles to financing small-scale enterprises in Nigeria. These challenges not only limit the growth and sustainability of small businesses but also hinder their ability to create employment opportunities and contribute to economic development. The research also examines the impact of these financing problems on small-scale enterprises, highlighting the adverse effects on their operations, growth prospects, and overall performance. The findings underscore the need for policy interventions to address the financing constraints faced by small-scale enterprises in Nigeria and promote their growth and development. In conclusion, the study provides valuable insights into the problems of financing small-scale enterprises in Nigeria and offers recommendations to enhance access to finance for these businesses. The findings have implications for policymakers, financial institutions, development agencies, and other stakeholders involved in supporting small-scale enterprises in Nigeria. By addressing the financing challenges faced by small businesses, stakeholders can foster an enabling environment for their growth and contribute to the overall economic development of the country.

Thesis Overview

1.1 BACKGROUND TO THE STUDY
Finance has been identified as one of the major factors for the development of small scale Industries in Nigeria. For the establishment of a small scale business in Nigeria, the first factor to be considered is the availability and source of fund for setting up the industry, small scale business is an organization that can be measured by various characteristic and some of these are its sales volume, capital investment, ownership structure and the member of paid employees.

Small scale industrial sector occupies a very significant place in the industrial sector of this country there are basically two broad categories of small scale industry. The first are those carried out by additional craftsmen and artisans, some of them might need assistance to moderise their skills. Tools and techniques of production. The second are those carried out by groups of small manufacturing enterprises which produce a variety of consumer and sample producer goods.

The small scale industry has been given different definition by different people and authorities at different times. However, the level of capital employed remains a relevant criterion for identifying the small scale industrial operation. Based on the general motion in the third National development plan 1976 –1980, a small scale industry means an industrial undertaking involving total investment of up to but not exceeding one hundred and fifty thousand (150,000).

Small scale industries are given different definitions both by NBCJ and CBN policy the Central Bank of Nigeria based on the federal government 1988 budget defines a small scale industry in case of Merchant Banks as one with limit of capital investment of two million Naira (N2m) capital cost of land, or one with a maximum turn over of five Million Naira (N5m) and for the commercial banks, it is an enterprises with annual turnover not exceeding five hundred thousand naira (N500,000).

Additionally, the small scale industries division of the federal ministry of commerce and industry defines a small-scale industry “as establishment with capital investment holding totaling two hundred and fifty thousand naira (N250,000) with between 50 – 150 employees”? But judging from the recent industrial policy guideline, small scale unites means industries with capital outlay of between one hundred and two hundred thousand naira (N100,000 and N200,000) excluding land and building but including working capital.3

Having examine the various definitions with regards to the concept of small scale business, it is deemed necessary, for the purpose of this study to provide a basic framework by adopting a more common definition. Small scale industry can be defined as one which I independently owned and operated