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COMMERCIAL BANK – ROLE IN FINANCING SMALL SCALE INDUSTRIES IN NIGERIA

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CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

The concept of dependent has occupied a central place in the economic development over the year, basically as a manifestation of the various attempts by the developing world to chart new economic strategies which would reliever them of economic  dependence on their former colonial master in Europe.  Today the concept of dependent continues to be misunderstood in  its fundamental ramifications and has  remained difficult in large sections of the developing world.  In Nigeria, neither the mixed economy approach, appeal to have responds to the dictates of  economies dependent.

However, in pursuit of dependent in the developing world like Nigeria, the central government enacted a decree called “enterprises promotion decree”.  When there was a need for small scale enterprises, owned and managed by Nigeria to be promoted.  The importance of small enterprises in the promotion of economic development has always been at the forefront of the  development strategies.  Many developing  countries have failed  to adopt this strategy owing to their belief that it  is a relatively slow process of industrialization.  But in the recent times due to the scarcity of foreign exchange, attention has began  to be focused once again  on development of ingenious.  Without the  development of small scale industries in Nigeria, the Nations request fort industrialization will certainly remain forever at a state.

Furthermore,  several  financial institutions are invested in entrepreneurship development in Nigeria in ways.  Some of them are set up by the gove3rnment for specific functions, there  main functions are to provide findings, relief from financial consequences of  uncertainty, and advisory services for business enterprises, public and private.  The government plays the role of financial companies.

Some of these institution include: Nigerian Bank for commerce and industry (NBCI) Nigerian Agricultural and  development  Bank (NDB), peoples bank  of Nigerian (PBN), the  commercial sourcing for fund and enough funds cannot be mobilized from friend and relations, the next things that comes to mind  is to try the banks.  The commercial banks for instance, is the center of the leading market and makes the greatest number and varity of loans.  The commercial banks are very conservative in lending.  The commercial banks look at many things apart from the ability of entrepreneur to provide the needed collateral and may be interested  by looking at the  feasibility report, the experience of the entrepreneur, his personal credit records, profit potentials.

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