PROBLEMS AND PROSPECTS OF FINANCING SMALL SCALE BUSINESSES IN NIGERIA

Abstract

This study examined the problems and prospects of financing small scale businesses in Nigeria. The utmost objective of this study is to examine and assess the various sources of finance opened to small scale industrialists and problem associated with their operation in Nigeria. However, attempt was made to collect relevant data on a chosen small scale business Didvet Animal Health and Nutrition small scale enterprises in Osogbo, Osun State, Nigeria. Questionnaire method was utilized to gather the data used for the study and the outcome of the research was analyzed using frequency, Standard deviation, mean, percentages, and chi-square method. The questionnaire was administered on 100 respondents. All hypotheses were tested at degree of freedom 3.841.The result of the findings showed that that the percentage contribution by bank loans and overdraft to small scale enterprises is up to 50% with calculated value of 25 which is more than the 3.841 at 1 degree of freedom of 0.05chi-square table. It also showed that the expansion of small scale business is hindered by finance, management skill, family problems and power supply with calculated value of 9which is more than 3.841 at 1 degree of freedom of 0.05chi-square table. The study concluded that banks and other development institutions should further rationalize their functions to cater exclusively for small scale businesses and to enable the small businesses to have access to funds and better management. The study recommends that small scale industry should be given a concessionary interest rate to develop their sector as well as encouraging others to engage in productive ventures.