SOURCES OF FUNDS FOR SMALL SCALE BUSINESS.
 (A CASE STUDY OF NIGERIA AGRICULTURAL CO-OPERATIVE AND RURAL DEVELOPMENT BANK)

ABSTRACT

The study aims at identifying the operational problems of NACRDB in financially small and medium scale enterprise in Nigeria. In carrying out the study term participating banks in the scheme.
    The decision to study the operational problems of NACFDB was prompted by the important role played by the small and medium scale enterprises in the economy such as ours. The questionnaire and interview methods were used to extract information from bank, NACRDB official and Association of NACRDB beneficiaries. The information obtained were analysed using simple percentage ratios.
    It was observed that:
-    Distress in banking sectors coupled with the high-risk nature of the SMES     are the main reason for inadequate bank support to SME    s.
-    Government is inconsistency on policies affecting NACRDS has a negative effect on the NACRDB scheme.
    Finally, the study conclude that future of the country will be bright if the SMES are effectively natured to realize the aims and objective of setting item up.

TABLE OF CONTENTS

CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND OF THE STUDY
    Financing is always very important issue in investment decision. A ready question that always proceeds project concernment is “How do we finance the project” even an impressive viable and feasible project can only achieve the business virility expected of if after the issues of financing haws been firmly and adequately resolved.
    The need tom make finance available to small-scale industrialist cannot be over emphasized to reduce the problems faced by this sector: it has become imperative to link item to all known sources of funds. Finance is very vital to any organization and small-scale entrepreneurs are not left out.
    This type of study has become necessary now that renewed interest is being shown in the development of small scale industries in the development of small scale industries in economic development, particularly in a developing economic like Nigeria where efforts are being made4 at indigenization of the Economy. This vital role of the small-scale industries, which include the creation of employment opportunities, the mobilization of local resources, mitigation or rural urban migration and the achievement of a more even distribution of industries enterprises in different parts of the country. This makes it important to make finance available to small-scale industries.
    Among these available sources of funds are government agencies of which NACRDS (Nigeria Agricultural co-operation and Rural Development Bank) is one.
    It would be interesting to find out the extend to which NACRDB has gone to achieve its objective.
    NACRDB was set up by the federal government of Nigeria in 1989, legalized by decree No. 2 of 1989. The fund was to provide both local and foregn currencies, inform of loans to entrepreneurs through participating banks. The fund came into being to address some problems of financing faced by the small and medium scale enterprise in sourcing for funds through banks such as difficulty in passing through stringent selection process of banks since the banks are only willing to commit a small amount to medium, long term loans
    To correct these observed inadequacies in medium and long term financing and sourcing of foreign currencies. NACRDB according to its bulletin is set up to mobilize financial resources that would enable small and medium scale enterprise eligible industrial and Allied enterprises have better access to medium and long  term loan facilities to help them acquire their fixed assets such as machinery and equipment.
    These objectives of NACRDB are laudable if really implemented as planned.

1.2    STATEMENT OF THE PROBLEM
As we all know, finance is a very vital resources and serious constraint to development in any establishment or organization. Capital is needed to improve the position of any firm since it is used to purchase the needed raw materials machines, to pay for qualified personnel and to carryout other necessary transformation.
    Indeed studies here shown that most small scale enterprises start their line without any institution help. The entrepreneur usually obtains the small amount of money he needs from his own savings or from his family or friends.

1.3    purpose o the study
    The purpose of this study is to this study is to critically examine the sources and management of funds available to various small-scale entrepreneur, if so that to find out if any is lacking behind in its duty to utilize the various sources o fund by way of comparing them.
    The study will also examine the debts on revenue allocation as it affects small-scale enterprise.

1.4    RESEARCH QUESTION
i.    What kind of business are you engage in?
ii.    How much loan did you ask for?
iii.    What collateral did you provide for the loan?
iv.    Did you attach a feasibility study to the application?
v.    Was your application for loan approved?
vi.    If it was not, what was the reason stated?    
vii.    What was your view of the application being corned down?
viii.    Do you  keep financial record?
x.    If yes, how many financial records do you keep out of the following requested banks?
xi.    How many professionals do you have, who are working in your organization?

1.5    SIGNIFICANCE OF THE STUDY
    The study on financing of small-scale enterprises based on NACRDB as an alternative source is significant to the promoters of the industry generators (banks and to NACRDB is an institution, also the general public and government). At a time like this when the country is trying to fund the path to join the enviable. However small-scale enterprises find it difficult to grow with the opportunity to borrow from financial institution: especially in financing long-term projects.
    An industrial project has a long-term maturity period and to finance such enterprises or fund firms require long-term source of funds instead of short-term funds often provided by commercial banks. The commercial  banks by their nature have loan able short term basis create a deposit loan maturity gap a the owner of such deposit can call for their money at short notice.

1.7    DEFINITION OF TERMS
    Some technical works and terms here been inevitably used in this research work.
    The need to explain them in order to enhance the understanding of the whole texts arose some of these terms are as follows.
1.    SOURCES:- This mans a way through which information can be gotten or obtain from.
2.    BUSINESS:- Business is any organized activity or scheme undertaken by a person or persons with a view to earn a living.
3.    CAPITAL:- This is the money needed to set up a business
4.    MANAGEMENT:- This means getting  things done through with people management is the accomplishment of desired objectives by establishing an environment favourable for performance by people operating in organized group.
5.    GOVERNMENT:- This means a group of people who govers a country or state it also means the set or process or governing.
6.    INVESTMENT ADVICER:- Financial professional who specializes in making portfolio recommendations for clients.
7.    NACRDB:-     Nigeria Agricultural Co-operation and Rural development bank.
8.    MANAGER:- A person who makes things happen with an organization through the effect of other people.
9.    INDUSTRY:- Is the collection of various firms to form a unit.