TABLE OF CONTENTS

Title page        -           -           -           -           -           -           -           -           -           -           i

Declaration      -           -           -           -           -           -           -           -           -           -           ii

Certification    -           -           -           -           -           -           -           -           -           -           iii

Approval Page            -           -           -           -           -           -           -           -           -           -           iv

Dedication      -           -           -           -           -           -           -           -           -           -           v

Acknowledgement      -           -           -           -           -           -           -           -           -           vi

Table of contents        -           -           -           -           -           -           -           -           -           vii

Abstract          -           -           -           -           -           -           -           -           -           -           ix

CHAPTER ONE:  INTRODUCTION

1.1  Background to the study  -           -           -           -           -           -           -           -           1

1.2  Statement of the problem -           -           -           -           -           -           -           -           4

1.3  Objective of the study      -           -           -           -           -           -           -           -           4

1.4  Research Hypotheses        -           -           -           -           -           -           -           -           5

1.5  Significance of study        -           -           -           -           -           -           -           -           5

1.6  Scope of the study            -           -           -           -           -           -           -           -           -           6

CHAPTER TWO:  LITERATURE REVIEW

2.1 Introduction          -           -           -           -           -           -           -           -           -           7

2.2 Concept of Small Scale Industries            -           -           -           -           -           -           7

2.3 Overview of Small and Medium Enterprises in Nigeria   -           -           -           -           11

2.4 Role of Small Scale Industries      -           -           -           -           -           -           -           12

2.5 Financing Small Scale Industries  -           -           -           -           -           -           -           14

2.6 Sources of Financing Small Scale Industries        -           -           -           -           -           15

2.7 Small Scale Industries Loans Facility       -           -           -           -           -           -           20

2.8 Prospects of Small Scale Industries          -           -           -           -           -           -           22

2.9 Summary   -           -           -           -           -           -           -           -           -           -           22

CHAPTER THREE:  RESEARCH METHODOLOGY

3.1 Introduction          -           -           -           -           -           -           -           -           -           24

3.2 Research Design   -           -           -           -           -           -           -           -           -           24

3.3 Population and Sample Size of the Study            -           -           -           -           -           -           24

3.4 Method of Data Collection           -           -           -           -           -           -           -           25

3.5 Method of Data Analysis -           -           -           -           -           -           -           -           26

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Introduction          -           -           -           -           -           -           -           -           -           27

4.2 Data Presentation and Analysis    -           -           -           -           -           -           -           27

4.3 Test of Hypothesis            -           -           -           -           -           -           -           -           33

4.4 Research Findings -           -           -           -           -           -           -           -           -           36

4.5 Discussion of Findings     -           -           -           -           -           -           -           -           36

CHAPTER FIVE:  SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary   -           -           -           -           -           -           -           -           -           -           37

5.2 Conclusion            -           -           -           -           -           -           -           -           -           37

5.3 Limitation of study           -           -           -           -           -           -           -           -           38       

5.4 Recommendation  -           -           -           -           -           -           -           -           -           38

Reference        -           -           -           -           -           -           -           -           -           40

Questionnaire  -           -           -           -           -           -           -           -           -           42

ABSTRACT

This research assessed impact of deposit money banks on performance of small scale industries in Nigeria and Assess the effectiveness of the flow of loans from the Guaranty bank to the small scale industries.    This part of the research focuses mainly on the methodology involved on carrying out this work. It spells out the source of data and methods of collecting these data, dwells about targeted population as well sampling method and sampling techniques as well as other data analysis techniques. The simple percentages method was used for the description of respondents’ bio data, while the Pearson’s correlation coefficient statistical tool and the Chi-square statistical tool were used to test and analyze the formulated hypotheses in the study. Based on the findings of this study, the role of Deposit money banks in financing small scale industries in Nigeria, had shown that deposit money bank financing which can enhance meaningful development in the economy of the country, should be sustained and encouraged. The findings of the research agrees that there is a clear challenge of SMEs been limited in their growth due to inadequate capital occasioned by the reluctance of the government should formulate policies that will encourage deposit money banks to relax their restrictive regulations and operations which discourage borrowing and offer more credit facilities for SMEs.

 

CHAPTER ONE

INTRODUCTION

1.1              Background to the Study

The successive development plans of Nigeria have laid emphasis on the attainment of self-reliance. The need for this national objective is because much is expected from individuals from the view point of providing employment, opportunities self-reliance in basic food and material production high per capital income, foreign exchange earnings and the production of industries raw materials. The quest for economic development to ensure overall improvement in individual well-being of citizen has been pre-occupation of every nation. Developing countries are under much pressure in this regard because of their general peculiar features like, the concentration of a high proportion of the population in agricultural, high level of unemployment, population growth low level of saving, and high level of technological dependence on the advance countries, rural and urban migration and general poverty of various dimensions (Onwumere 2013).

Asmelash (2013) sited some other countries that have made economic break through the last decades. The significant impact small scale industries play in development is acknowledged universally. Even in countries such as the USA, where big corporation dominate, small scale industries still play enormous impact in the country economy as 62,000,000 small business, 5,400,000 employ less than 20 employee each (Schell, 2013). Small business employs 72,000,000 people. In Asia, small enterprise make up more than 90% of the Indonesia, Philippines, Thailand, Hong, Kong, Japan, Korea and India. They account for 98% of the employment in Indonesia, 78% in Thailand 81% in Japan and 87% in employment Bangladesh (Fadhusin and Darodu 2013).

Ogujiuba et al (2013) stated that for both developing and developed countries small and medium scale firms play important impact in the process of industrialization and economic growth. They also opined that apart from increasing per capital income and output, small scale industries create employment opportunities enhance regional economic balance through industrial dispersal and generally promote, effective resources utilization considered critical to engineering economic development and growth.

However, the seminal role played by small scale industries not withstanding its development is everywhere constrained by inadequate funding and poor management. The favorable macro-economic environment has also been identified as one of the major constraints which most times encourage financial institutions to risk averse in finding small and medium scale business. Financial system the world over play fundamental, impact in development, and growth of the economy. The effectiveness and efficiency in performing these impact, particularly the intermediation between the surplus and deficit unit of the economy, depends largely on the level of development of the financial sector appear to be the most regulated and controlled by the government and its agencies (Ogujiuba et al 2013).

Akeredolu (2013) observed that small scale industries with opportunities to invest in viable project might be blocked from doing so because of adverse selection and moral hazard problems. Nevertheless, the liquidity ratio of the financiers plays a major impact. Moral hazard problems are associated with the possibility of small scale industries diverting funds made available to them to fund alternative projects or develop the propensity to take excessive risk due to some persuasive incentive structure in the system.

On other hand, because small scale industries do not have access to public capital markets, they naturally depend on banks for funding. Dependence on banks make them even more vulnerable for the simple reason that shocks in the banking system can have significant impact on the supply of credit to small scale industries. Thus Small scale industries are subjects to funding problem in equilibrium and these problems are exacerbated during period’s financial inability. Berger and Udell (2013) and small scale industries exist could significantly affect the willingness and capacity of banks to lend to small and medium scale firms.

In Nigeria today, every know regime recognizes the importance of promoting small scale industries as the basis of economic growth. As a result several micro lending institutions were established to enhance the development of small scale industries. For example, Nigeria bank for commerce and industry (NBIC), National Economic Reconstruction Fund (NERFUND), the Community Bank (CB) and the Nigeria Export and Import Bank (NEXIM), and the liberalization of th

---