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Entrepreneur Department
📄 Pages: 65 🧠 Words: 11827 📚 Chapters: 5 🗂️️ For: PROJECT
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1.1 BACKGROUND OF THE STUDY
Small and Medium Enterprises (SMEs) play a vital role in the development of national economy. Due to their importance and the crucial role they play in economic development and growth of the nation, much attention has been placed on financing of small and medium enterprises, since they are major contributors to the economy of Nigeria. These enterprises are drivers of the economy; therefore policy attention has to be given to them especially in developing economies because of their impact on many sectors of the economy. Their impact is felt in the following ways: Greater utilization of local raw materials, employment generation, encouragement of rural development, development of entrepreneurship, mobilization of local savings, linkages with bigger industries, provision of regional balance by spreading investments more evenly, provision of avenue for self employment and provision of opportunity for training managers and semi skilled workers.
In Nigeria, credit has been recognized as an essential tool for promoting small and Micro Enterprises (SMEs), hence the need for recapitalization of commercial banks in Nigeria. Bank recapitalization which was effective from 2006 is aimed at making Nigerian banks stronger and better in-order to finance all sectors of the economy including the major drivers of the economy-Small and Medium Scale Enterprises. About 70 percent of the population is engaged in the informal sector or in agricultural production. The Federal and State governments have recognized that for sustainable growth and development, the financial empowerment of the people is vital. If this growth strategy is adopted and the latent entrepreneurial capabilities of this large segment of the people is sufficiently stimulated and sustained, then positive multipliers will be felt throughout the economy. To give effect to these aspirations various policies have been instituted over time by the Federal Government to improve rural and urban enterprise production capabilities (Olaitan 2006)
1.6 SIGINIFICANCE OF THE STUDY
Robust economic growth cannot be achieved without putting in place well focused programmes to reduce poverty through empowering the people by increasing their access to factors of production, especially credit. The latent capacity of the poor entrepreneurs would be significantly enhanced through the provision of microfinance services to enable them engage in economic activities and be more self-reliant; increase employment opportunities, enhance household income, and create wealth.
However, the lack of required financial support from the microfinance banks to Micro Business operators in Lagos state has become a major concern in Nigeria. Hence, this study shall be relevant to policy makers in the areas of finding out the impact of micro financing on the small scale investors. Also, this study shall enhance further research in the subject area.
1.7 SCOPE OF THE STUDY
The scope of this research work is the recapitalized commercial banks and their SME customers in Nigeria. However, due to the fact that there are many commercial banks with many SME customers, the research is limited to Mainstreet Bank, Osun branch and some of their SME customers.
1.8 LIMITATIONS OF THE STUDY
Time and financial constraints were the major limitations of the study. Since the researcher could not afford the cost of reaching out to more banks, money became a challenge. The researcher was also engaged in other school activities which also limited the time used for the project.
1.9 DEFINITION OF TERMS
REFERENCES
📄 Pages: 65 🧠 Words: 11827 📚 Chapters: 5 🗂️️ For: PROJECT
👁️🗨️️️ Views: 366
