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The challenge and prospects of capital mobilisation in financing small-scale companies in Enugu state are the focus of this research.

The goal of this study is to assess the extent to which Nigerian small-scale enterprises acquire loans and advances (risk financing) from Nigerian commercial banks as a major source of finance for the economy.

Small scale enterprises are defined as businesses with an annual revenue of less than five hundred thousand Naira (N500, 000). As a result, small scale industries in Nigeria must be assisted in developing and expanding their industries, as well as discovering for themselves their responsibilities to play in order to benefit.

This project is divided into four (4) chapters.

The first chapter deals with broad concepts and other basic concerns, such as an overview of the problem and prospects for capital mobilisation in financing small scale companies in Enugu State, a statement of the problem encountered by the researcher, and the study’s objectives. The significance of the study hypothesis, as well as the study’s scope and limitations.

The review of related literature is reviewed in chapter two, and this chapter deals with the definition or meaning of small scale industry in Nigeria, how government policy affects the industry, and how to improve funding to small scale enterprises.

Discuss research methods and data analysis in detail in Chapter 3. This chapter discusses the data source used in the project, and interview sample A is devoted to an examination of the method of research, as well as data gathering and analysis.

In chapter four, an analysis of the role of commercial banks in financing small-scale companies in Nigeria is concluded. As a result, it is hoped that this study will be used as a reference book for manufacturers, bankers,

accountants, scholars, and anyone else interested in the development of Nigeria’s small-scale industry.


Nigeria’s successive development plans have placed emphasis on achieving self-sufficiency. The need for this national goal is because much is expected from individuals in terms of providing employment opportunities, self-reliance in basic food, and material production of industrial raw materials.

Despite the so-called importance given to this sector, Nigeria’s small-scale industries have continued to decrease. However, the central banks discovered in 1970/80 that this strategy was insufficient and that all commercial banks must reserve a share of their minimum credit allocation of indigenous borrowers for small scale Nigeria firms,

the greatest prescribed in 1970 being 10%. This was then increased to 16 percent in 1980 and has remained at that level according to data.

Despite the fact that available data reveal that commercial banks’ performance in relation to this regulation has been disappointing, the central bank plans to make every effort to ensure that banks completely comply without jeopardising the smooth operation of the nation’s financial system.

Without the development of small-scale industries in Nigeria, the country’s prospects for industrialization will undoubtedly stay bleak. In the researcher’s modest opinion,

future development in our industrialization must address the fundamental issue of developing linkages inside the economy to begin producing actual inputs to our manufacturing activities.

Priority must therefore be given to sectors that can easily be produced with domestic inputs, which naturally calls to mind agro-allied industries such as food processing and other by products. The goal should be to maximise the value added in the processing and production of them as finished items or direct inputs.

Empirical evidence suggests that strong producer incentives for small-scale enterprises are required not just to meet food demand, but also to supply expanding input supplies and demand as a basis for long-term industrial expansion.

The current economic constraints may turn out to be a blessing in disguise for our industrialization efforts, particularly in the dynamic manufacturing sector. For example, the market determined exchange rate via S T E M, with its resultant high cost of imported inputs, may serve as an impetus for industrialists to intensify their search for local institutes.

The government of the east-central state statutorily enacted an edict in 1971 establishing a ministry of commerce and industry to be known as the fund for small scale industry credit scheme (fussi) to provide credit to prospective investors in order for them to establish themselves, thereby assisting the country’s industrialization.

Loans approved for small scale projects by Nigeria bank for commerce and industry (NCB) amounted to N29,983 million for 126 projects from 1980 to 1985, while Nigerian industrial development bank (NIDB) sanctioned N250.7 million to the national directorate of employment (NDE) during the same period, totaling N23,353,938 (73.2%) as of the end of December 1988.

Similarly, in the circular on small scale and medium enterprises loan scheme released by the Central Bank of Nigeria in February this year (1999), it was revealed that the World Bank had granted the federal government a loan of &270 million for the development of small sectors, of which &265.7 million would be made available for lending to small and medium scale enterprises through eligible participating banks. This will undoubtedly help to revitalise the acting industry.


Small-scale industry, like any other business, cannot function extensively without funds are available for maintenance and the acquisition of necessary equipment and inputs.

a. Short-term credit: this sort of borrowing is used to finance yearly activities until the industry’s products or revenues are sold. The quantity involved in these sorts of credit is usually tiny, but the shortage of this type of credit is not adequately felt by small scale industrialists who have little or no to draw upon; they are mostly beginners.

b. Long-term loan: This type of credit is required for the purchase of large industrial machinery, as well as improvements to industrial equipment buildings and land.

c. Medium-term loan: This form of loan has a maturity duration of more than one year but not more than three to five years. This loan is mostly needed for the purchase of low-cost equipment with relatively short-term industrial credit.

Smaller scale industrial credit can thus be a powerful tool in bringing about a revolution in industries if it is supplied in sufficient quantity and utilised efficiently. It is widely known that one of the main priorities of the country’s successive governments has been the growth of small-scale enterprises and realisation of self-reliance in industrial output, as well as the provision of raw materials for other sectors.

Furthermore, Nigeria’s imports, bills, and unemployment are all on the rise, posing a threat to the country. As a result, everyone must work together to develop a comprehensive policy that scales the industrial sector. As a result, the goal of this research is to put a stop to his peculiarities.

Because finance is only one of the factors of production, the study highlights small-scale enterprises sponsored in Enugu state as part of the larger subject of industrial growth.


The study’s objectives include

Determine the amount to which capital mobilisation has aided in the financing of small-scale companies, as well as the obstacles to such financing.

Identifying the difficulties faced by small-scale industrialists in obtaining bank financing

To assess how various measures introduced to improve industrial production and its funding have affected the achievement of the established targets.

To establish the source of variation in capital mobilisation in small-scale industries.

To assess and analyse the situation and give recommendations on how to improve capital mobilisation and credit provision for small-scale industries.


The growth of small-scale industries and self-reliance in industries and food production, as well as the provision of raw materials for other industries, is one of the Nigerian government’s major priorities in the subsequent development plan.

In light of this, it is critical to examine the finance issue confronting small-scale industries. This type of evaluation will help this industry to meet the ever-increasing demands on it.

An analysis of capital mobilisation performance can help us understand why industrial output has fallen in recent years to a greater extent.

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