The Role Of Deposit Money Banks In The Performance Of Small Scale Enterprises In Nigeria.
ABSTRACT
This research examined the role of deposit money banks in the performance of small scale enterprises in Nigeria a study of First Bank of Nigeria.
Specifically, the study highlights the different sources of finance available to small scale enterprises, it also examines the role of deposit money banks in satisfying the financial needs of SMEs in Nigeria and finally it also examine a method to reduce formality needed for financing the entrepreneurs by deposit money banks.
A sample is a portion of the population selected for study. It is very important to select a sample size that will give sufficient fair representation of the population. There are two basic way of making the sample size decision, one is by rule of thumb and the other one is by calculated method.
In this research work, the rule of the thumb was used for this research where 90 employees of total population were selected as the sample size. Simple random sampling was used to select target individual from each stratum.
The complete questionnaires were collected serially, coded and analyzed sequentially a cording to the research questions. Tables were used to present information to facilitate analysis, simple percentages where used while Chi-square was used to test the hypothesis.
The responses were of five-point scale which range from “strong agreed to the undecided “. Thus; Strongly Agreed = 5 Agreed = 4 Undecided = 3 Disagreed = 2 Strongly Disagreed = 1. The findings of the research indicated that there is no significant relationship between financing of small and medium scale enterprises and deposit money banks.
Furthermore, result indicated that there deposit money banks and lending to small scale industries and also in meeting the needs of small and medium scale enterprises. It is recommended that the government should be consistent in its industrial policies so as to enable manufacturing firms to factor tariff measures into their trade decisions.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Abstract vi
Table of Contents vii
List of Tables ix
CHAPTER ONE: INTRODUCTION
- Introduction 1
- Background to the study 2
- Statement of the problem 5
- Objectives of the study 6
- Research questions 6
- Statement of the hypothesis 6
- Significance of the study 7
- Scope of the study 7
- Limitations of the study 8
- Definitions of terms 8
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 10
2.1 Conceptual framework 10
2.2 Theoretical frame work 14
2.3 Literature on Subject Matters 15
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Area of the Study 34
3.1 Sources of Data 34
3.2 Sampling Techniques 36
3.3 Method of Data Collection 37
3.4 Method of Data Analysis 37
3.5 Reliability of the Instrument 38
3.6 Validity of Instrument 39
3.7 Limitation of Study 39
CHAPTER FOUR: DATA ANALYSIS, FINDINGS AND DISCUSSION
4.0 Data analysis, findings and discussion 40
4.1 Findings of the Study 40
4.2 Test of Hypothesis 47
4.3 Discussion of Findings 51
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary 52
5.2 Conclusion 53
5.3 Recommendations 54
References 56
Appendix 61
INTRODUCTION
Small and medium scale enterprises (SMEs) are seen as instruments for reducing the poverty level affecting the country and improving the economy of Nigeria. Therefore the need for SMEs growth in Nigeria is beyond question.
Studies by the International Finance Corporation (IFC) show that approximately 96% of Nigerian businesses are SMEs compared to 53% in the US and 65% in Europe, they contribute approximately 1% of GDP compared to 40% in Asian countries and 50% in the US or Europe (Oyelaran – Oyeyinka, 2012).
The question as to why the SMEs in Nigeria, are not contributing to the growth of the economy as they should like in other countries now arises.
Small and medium scale enterprises earn their funds from various sources like personal savings, family and friends, loans and professional money lender such as deposit money banks and institutions like National Directorate of Employment, National Economic Reconstruction Fund and other Small and medium scale enterprise schemes.
Despite all the above-mentioned sources of finance, financial constraint is still put as the major problem of SMEs. The Banking System is very important for any nation because it is the pivot of socio-economic development of any economy Terungwa, (2016).
This implies that commercial banks have active developmental roles to play in the economy such as mobilizing fund from the surplus to the deficit spending units.
Commercial banks are considering as the main source of finance for SMEs or rather entrepreneurs in Nigeria. Akabueze, (2007) assert that Finance has been seen as a critical element in the growth and development of SMEs.
For instance the commencement and efficient performance of any industrial enterprises be it small or large will require the provision of funds for its capitalization, working capital and rehabilitation needs, as well as for the creation of new investments.
REFERENCES
Afolabi, M. O. (2013). Growth effect of small and medium scale enterprises financing in Nigeria. Journal of African Macroeconomic Review, 3(1), 12-15.
Aftab, K. and E. Rahim (2002) “Barriers to the growth of informal sector firms: a case study”, Journal of Development Studies, 25(4).
Alawe T. (2009). Entrepreneurship processes and small business management. Industrial Science Centre, Owoyemi House, Abeokuta road Sango Otta Ogun state, Nigeria
Akabueze, B. (2007). “Prospectus on Nigeria SMEs under the Small and Medium Industries Investment Scheme” (SMIEIS).
Ana I. (2013), Nigerians and Micro financing. A paper presented at the 5th Nigeria German business group conference in Dusseldorf, Germany on the 6th September, 2008.
Aremu, M. A. and Adeyemi, S.L. (2016).Small and Medium Scale Enterprises as a survival strategy for employment generation in Nigeria. Journal of Sustainable Development 4 (1), 200-206.
Ariyo D (2009). Small firm are the backbone of Nigeria economy. Africa Business Information Service, Bridgnorth United Kingdom
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