Studies on industrial development countries have shown that small and medium enterprises constitute a fundamental part of the industrial sector and play an active role and bring development to these countries. Over the year, the Nigeria economy has been dominated by large industries which are mostly multinational. This is obviously due to the government policies which encouraged and emphasized the development of these large industries at the at the expense of the small scale industries. Eventually, the Nigerian government recognized the development of small scale industrial as an imperative prerequisite for sustaining a well balanced industrial sector. Faust (2000) submits that four basic interrelated inputs are required to give impetus to their development. They included;

i.            Favorable government policies and incentives

ii.            Technical assistance

iii.            Managerial assistance

iv.            Finance assistance

Due to the uncertainties, the lower rate of return, the expense of administration and the mediocre expense of previous government lending programs, Faust added, financial assistance for the small entrepreneur has been lacking from both government and commercial source.