CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO PROBLEM
The successive development plans of Nigeria have laid emphasis on the attainment of self reliance. The need for this national objective is because much is expected from individuals from the view point of providing employment opportunities self reliance in basic food and material production high per capital income, foreign exchange earnings and the production of industrial raw materials. Okporobie (1989:10) observes that Nigeria small scale business continued to decline despite the so called priority given to the sector However, the discovery by the central bank that this policy was not enough by it self led to the central bank request with effect from 1970/80 that all commercial bank must reserve a proportion of the minimum credit allocation to indigenous borrowers for small scale Nigeria enterprises. The target prescribed in 1979 was ten percent (10%) which subsequently raised to sixteen percent (16%). Even though available data showed that performance of Union bank against this directive has been disappointing. The central bank intends to spare no effort in ensuring that banks fully couple without compromising the smooth functioning of the nation banning system.
He observed also, that without the development of small scale business in Nigeria, the nations quest for industrialization will certainly remain forever at stake. It is the opinion of the researcher that future development in our industrialization must address the basic issues of creating linkages without the economy to begin to produce real inputs to our manufacturing activities . Priority attention must therefore be given to these industries for which domestic inputs could easily be produced. This will bring about agro-allied industries like food processing and other by-products. The objective should be to maximize the value added in their processing and manufacturing as final goods immediately inputs. Nzewi and Oze (1985:56) observed that empirical evidence indicates that strong producer incentives to small scale industrialists are necessary not also only to meet the food requirement but also to provide growing input supplies and demand as a foundation for sustained industrial growth. The present economic constraint may well turn out to be a blessing in disguise to our industrialization effect particularly for dynamic manufacturing sector. For instance, the market determinate exchange rate through seeing with its result and high cost of imported inputs may serve as an impetus for industrialist to intensify their search for local substitutes. Ekenyong and Nyong (1992) observed that small scale enterprises are regarded an organic part of a viable structure for the attainment meaningful economy development in developing economic like Nigeria. They are significantly more cost effective in bringing about development than large enterprises because of the perceived linkage and multiplier effects which small scale enterprises have on the performance of the economy and economic growth in general. Osayameh (1989) observes that the strength that make small scale enterprises more amendable for assistance areas as follows. 1. Personal commitment of the proprietor whose life savings usually form the start up capital. 2. Low initial capital out lay requirement 3. Ease of entry and exit and prevalence of just minimal legal constraints 4. Amenability to business advisory services because of their small size which makes than more responsive to improvement suggestions.
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