THE PROBLEMS OF FINANCING SMALL SCALE BUSINESS IN NIGERIA
(CASE STUDY OF GARRI PROCESSING INDUSTRY)
 ABSTRACT
          Since independent Nigeria the giant of Africa has spent much time and resources both human and material trying to convince the developed countries and indeed the whole word that she (Nigeria) is capable of developing her industrial capabilities.
Much of the efforts made in this direction have found expressions mostly in international conference and seminars, newspapers report, radio announcements and various national development plans.
          Industries have actually increase since after the independent, but the disappointing record of economic performance in the last decade has led to the reopening of the debate on the strategy of industrialization
          Nigeria is still a net import of all sorts of goods from needless to heavy machinery, simple because most of the industries where established for their immediate lucrative such as been soft drink and other consumers goods industries without the consideration to nation’s industrial needs or for the utilization of local materials.
          Besides most of the large scale industries before the industrialization decree were foreign owned and were associated with significant possibilities of income leakages. This in spite of the rapid increase in the gross national productivities (GNP) in last decade, the poorest segment of the population peculiarity those in the rural areas has received relatively little benefit.
          Unfortunately the bulk of Nigeria business are small-scale industries of the number of business establishments, they account for about 80% or above of the total number of enterprise in the country.
          The important role they play in the development process was observed by the first progress report of the second National Development plan “in spite of the anticipated rapid growth of the wage sector, the major solution to the nations unemployment problem will have to be found in other areas like agriculture and small scale industries development.”
          In spite of all these, the small scale industries sub-sector has continued to suffer from lack of credit most all the governments financial programmes for the small industrial credit scheme, fund for small scale industries has remained largely inadequate and of little effect.
          The banks and other financial houses cannot help matters either despite the central bank credit scheme to industries.
          It would be noted in the regard that majority of the small scale industries would not be able to meet the requirement of the bank and other financial institution lending policies. Therefore given these financial constraints.
 TABLE OF CONTENT
1.0 CHAPTER ONE: INTRODUCTION                                              
1.1 Background of the study                  
1.2 Statement of the problem                  
1.3 Objective of the study              
1.4 Research question          
1.5 Research Hypothesis
1.6 Significance of the study
1.7 Scope of the study
1.8 Limitation of the study  
1.9 Definition of terms         
          Reference           
CHAPTER TWO:
REVIEW OF RELATED LITERATURE:
2.0 Theoretical and empirical                
2.1.0 Theoretical review of related literature
2.1.1 Small scale business defined         
2.1.2Management and organization of
small scale          industries/businesses
2.1.3 Sources of fund to small scale industries/businesses         
2.1.4 Problems of small scale industry/business     
2.2      Empirical Review of Related Literature        
          REFERENCE              
 3.0 CHAPTER THREE: RESEARCH DESIGN
AND METHODOLGY
3.1 Research Design             
3.2 Area of the study  
3.3 Population of the study
3.4 Sample and sampling Techniques   
3.5 Instruments for Data collection        
3.6 Method of Data collection                 
3.7 Method of Data Analysis        
3.8 Method of investigation
      References                       
 4.0 CHAPTER FOUR: DATA PRESENTATION
AND DATA ANALYSIS
4.1 Data presentation and Analysis of results
4.2 Test of hypothesis           
4.3 Summary of result         
          Reference                     
5.0 CHAPTER FIVE: FINDINGS, CONCLUSION
AND RECOMMENDATION
5.1     Findings   
5.2     Conclusions       
5.3     Recommendation
5.4     Suggestion for further research    
          Bibliography     
          Appendix
Questionnaire    
CHAPTER ONE: INTRODUCTION
1.1     BACKGROUND OF THE STUDY
          It is necessary to stress the point that to succeed in business require some measure of discipline.  Most industrialists expect to make a reasonable profit from the investment of time and resources that they have to make in other to bring a project to   function.
          While this may sound simple enough, the bother line is the fact in an economy wide context, the rate or level of reward that can accrue to various level of effort, discipline and productivity should never be allowed to get out of proportion in relation to effort put in.
          Experience has shown that industrial pursuits have been found to yield for the patient and disciplined industrialist rather than stand for business concern with all kinds of effort mostly unproductive and require no legitimate effort to reap profits in multiple fields.
          After considering the above mentioned statement of facts about industry.  The question is how far are we from being industrialized bearing in mind that it yields for disciplined and patient industrialist, all things being equal.
          Taking cognizance of the fact that a step forward is the beginning of a mile.  Some, therefore Nigeria’s business industrial evolution will only start when positive steps are taken towards adequate financing of small scale business.  The experience of newly industrialized countries has been an eye opener.
          Finance is the greatest problem we are likely to face whenever we talk of establishing a small scale industry.  This is the most crucial aspect of business enterprise and a lot of controversy surrounding the problem of inadequate finance.  A close look on the small scale industries/business, all over the country would help to throw further light on the effect of lack of fund on growing business.  The drastic effect is mostly felt when one tries to study the rate at which our young industries are gradually collapsing.  Even surviving ones are terribly looking for assistance that they are not sure of.
          Funds are scare, hence the growing industries as regarded in this part of the world as never-do-wells especially Nigeria.  When an economy is shaky, growing industries in that economy tend to suffer most and usually stand the taste of time.  Hence, an increase in the number of causalities in this regard.
          The researcher aimed at exploiting the possibilities, problems of financing small scale business/industries.  The project centers on management and financial problems
1.2     STATEMENT OF PROBLEM        
          There are various problems facing the establishment of small scale business like financial limitation, lack of raw material, poor management and quality of the management, staff, poor accounting method, high interest charge on loans and lack of adequate planning and feasibility studies.
          The most common and problematic issues is funding.  Small scale business find it difficult to obtain fund from established institution like commercial banks and because of the some projects have take off but had to be abandoned half way.  The issue involved is the question of capital adequacy.
          When a company is under capitalized it cannot realize its full potentials.  Many small scale enterprises in Nigeria experience this problem.  They cannot expand their scale of production to optimum level.
          To ameliorate these problems therefore government should implement the law or policy that made to enhance small scale business (especially that of in fact once) such as central bank policy that direct all commercial bank to give out some percentage of loan to small scale business than those of medium and large scale industries/business.
1.3     OBJECTIVE OF THE STUDY
          The purposes of this study include:
(a)             To ascertain the present economic state of the life’s of small scale business with the view to identify the major problems that affect the financing of small scale business bearing in mind the adequate financing stands as an energizer to its operations.
(b)             To determine what strategies employed by the surviving and successful ones among them toward alleviating these problems.
(c)              To ascertain the extent to which the financial institution has helped to develop small scale business.
1.4     RESEARCH QUESTIONS
          This issue will not be treated in isolation taking into cognizance the level of development in Nigeria.  Based on this, questions were asked by the researcher, which include:
a.       What are the present economic states of life’s of small scale business with the view to identify the major problems that affect the financing stands as an energizer to its operations.
b. What are strategies employed by the surviving and successfully ones among them toward alternating these problem.
c.       How does the financial institution help to develop small scale business?
1.5     HYPOTHESIS FORMULATION
          The following hypothesis is relevant and necessary for the carrying out this research
a. Ho: Lack of adequate finance has contributed to the failure of economic state of lives of small scale business.
Hi:    Lack of adequate finance has not contributed to the failure of   present economics state of lives of small scale business.
 b. H0:    There is failure in strategies employed by the surviving and  successful one among them toward alternative these problem.
   Hi:     There is no strategies employed by the surviving and  successfully one among them toward alternating these problem
c. H0:     Financial institution has contributed to the failure of small  scale business.
   Hi:     Financial institution has not contributed to the failure of small  scale business.
1.6     SIGNIFICANCE OF THE STUDY
          The significance of this research is that the result will help identify how business loan are obtained or secured both locally and internationally from financial institutions.  On this note awareness is being created or it will help to create it on how fund or finance could be raised to finance small scale business.
1.7     SCOPE OF THE STUDY
          The area would have been the study of all the small scale business in Nigeria but however, this would have posed some threats to the researcher. Among them were the lacks of adequate fund to meet the rising cost of research.  Unavailability of sufficient books by Nigerian authors in the area of small business and its problems.  Also the problem associated with the collection of data.
          Consequently, the study is specially design to examine the problems of Garri processing industry at Abakpa Nike, Enugu towards getting financial assistance from financial houses.
1.9     DEFINITION OF TERMS
          The following words relating to the subject matter of the research work have been defined thus:
RETAINED EARNING: Retained earning as undistributed profit to the shareholders, it is profit that is ploughed back into a business for expansion.
FINANCE: It is an economic force used in the making payment both final and deferred settlement for things of value.
INDUSTRY: Industry is a group of firms which are engages in manufacturing as oppose to commence and distribution. Firm is a subset of an industry.
EQUITY CAPITAL:  Equity capital is the money contributed but by the owners ie shareholders as a capital of the business. It can also be shareholders money.
MOTIVE POWER: Motive power is the human used in production in an industry usually human resources.
DEBT: It is amount owned by the business or individual to another business or individual called creditor or period.
EXTERNAL EQUITY: It is capital borrowed by a business.