FINANCING A SMALL SCALE BUSINESS IN ENUGU AYOGU. A RESEARCH PROJECT MATERIAL ON BANKING AND FINANCE
1.1 BACKGROUND OF THE STUDY
Industrial development involves development of a technical arrangement that moves on economy from the traditional method of production to a more complex system of mass manufacturing of verity of goods of services involving technology and management techniques.
Industrialization tends to propel growth adequate the achievement of structural transformation and diversification of economy. It enable a country to utilize it’s factor endowment and depends less on external sector. For its growth and sustenance. They provide employment for a substantial proportion of the industrial establishment. Therefore due to the above incentioned role played by industrial sector, that is small-scale industrial in the economy, it requires some financial support from government for the smooth running of the industrial.
But small-scale industries is a sub-sector of development that is of great importance as mentioned above, but it has not received the types of attention it deserves that is why the government and the Federal Ministry of industries lay-down the parameter under which a industrialist may take advantage of the various incentive erected by the government for the growth of the small-scale industries. Such incentives are in the form of loan provision of machinery and raw materials.
The process of taking advantages of the various incentive scheme are so cumbersome and its subject to bureaucratic radicalism and only few small-scale industries are able to utilize them.
The importance of small-scale industries to the survival of a nation can no longer be saved. They have moved from the substance level to pre-indigenization period of importance in the country’s industrial process. Therefore the authorities should not relent on the inactive dec to lack of fund.
The Nigeria Bank was established to provide among other financial services to the indigenous business community, especially small sale industries of the recommendation of the financial system review committee of 1976 government made bank the apex financial institution for small-scale business. The bank obtains fund from the federal government to assist small business and the loan granted are relating on soft terms.