ROLE OF BANK IN THE DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
ROLE OF BANK IN THE DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA
ABSTRACT
The study’s goal is to demonstrate the involvement of banks in the development of small and medium-sized businesses in Nigeria. The researcher plans to conduct a case study on this topic at United Bank for Africa Plc, using a questionnaire and an interview guide.
Our findings will help us understand how banks in Nigeria contribute to the development of small and medium-sized businesses, which in turn helps our economy. Finally, sufficient conclusions and recommendations will be provided.
INTRODUCTION TO CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Banking activity initially arrived in Nigeria in 1892, when the Africa Banking Cooperation was created. Nigeria’s development can be classified into five stages:
1. the period of open banking
2. the period preceding the establishment of the Central Bank
3. the legalisation of banking
4. the period of indigenous peoples
5. the period following the Okigbo era
The Nigeria small and medium enterprises (SMES) and bank was established in the 1970s during the era of indigenization with the goal of supporting small and medium firms in the Nigerian economy. The Nigeria Small and Medium Enterprises and Bank is a development finance organisation established primarily to provide credit to Nigerian small and medium enterprises.
This is accomplished by making loans to people, limited liability firms, cooperative organisations, and so on. Banks also provide finance by directing investment in the equity capital of significant small and medium-sized businesses.
Banks’ activities are also focused towards assisting in boosting the income and welfare of small and medium-sized business owners in Nigeria, supporting rural development, and raising the nation’s output of products and costs to meet the demands of Nigeria’s constantly growing population.
The bank’s policy was changed to accommodate the challenges of small and medium-sized business owners, the green revolution programme, the small holders direct loan plan, and the river basin development authorities’ lending scheme. The bankers committee is a body made up of representatives from Nigerian banks.
On December 21, 1999, the concept was adopted at their 246th meeting. According to them, this was a response to the federal government’s concern and a policy initiative to promote small and medium-sized enterprises (SMES) as a vehicle for rapid industrialisation, long-term economic development,
poverty alleviation, and job creation. The scheme, which began on June 19th, 2001, compels all Nigerian banks to set aside 10% of their profit tax (PBT) for equity investment in small and medium-sized businesses.
1.2 STATEMENT OF PROBLEMS
The Nigerian small and medium scale industries (NSMSI) play a significant part in the country’s economic development. Regardless of their roles, small and medium-sized businesses confront challenges such as insufficient resources to finance their initiatives and the incapacity or unwillingness of loan recipients to provide services or return their debts.
1.3 THE PURPOSE OF THE STUDY
The study’s goal is to discover the roles of banks in the growth of small and medium-sized industries in Nigeria, as well as the roles of small and medium-sized companies SMES in the development of the economy. The research will also look into the issues that arise during the loan application procedure and possible solutions.
1.4 SIGNIFICANCE OF THE STUDY
The study’s findings will demonstrate the functions and roles of Nigerian small and medium companies and banks in the growth of Nigeria’s small and medium industries. Furthermore, the findings will help small and medium-sized business owners and banks enhance the share of loans made to small and medium-sized business owners and consumers.
Furthermore, it would allow Nigerian small and medium-sized businesses and banks to implement a new strategy to improve the release of loanable funds in order to achieve higher efficiency in the administration of Nigeria’s small and medium-sized businesses.
1.5 RESEARCH QUESTION
The following research questions will be the primary focus of this study:
a. Do small and medium-sized firms (SMEs) play a significant role in economic development?
a. Are banks in Nigeria having difficulty recovering loans from recipients (SMEs)?
c. Do small and medium-sized businesses face insufficient resources to finance their projects?
Need help with a related project topic or New topic? Send Us Your Topic