ONLINE PROJECT RESOURCE

ECONOMICS

ACCOUNTANCY

BUSINESS ADMINISTRATION

BANKING & FINANCE

POLITICAL SCIENCE

MARKETING

SOCIOLOGY

INSURANCE

SECRETARIAL STUDIES

INDUSTRIAL RELATIONS & PERSONNEL MANAGEMENT

MANAGEMENT SCIENCE EDUCATION

 

 

MSc/MBA PROJECTS

 

 

USEFUL RESOURCE

Nigeria Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOU ARE EXPECTED TO USE THIS PROJECT AS A GUIDE; HOWEVER, IF YOU WISH TO USE IT WHOLLY, YOU WILL BE RESPONSIBLE FOR ANY ADJUSTMENT YOUR SUPERVISOR MAY REQUIRE

IT WILL BE SENT TO YOUR E-MAIL AFTER PAYMENT SAME DAY

 

PROJECT TOPIC  : APPRAISAL OF SMALL AND MEDIUM SCALE ENTERPRISES FINANCING IN NIGERIA

PROJECT PROPOSAL

BACKGROUND OF THE STUDY
The dynamic role of Small and Medium Enterprises (SMEs) in developing countries as engines through which the growth and development objectives of developing countries can be achieved has long been recognized and stated in the literature. The advantages claimed for Small and Medium Enterprises (SMEs) are various, including: the encouragement of entrepreneurship (Safiriyu and Njogo, 2012; Ayozie and Latinwo, 2010; Ayesha, 2007); the greater likelihood that SMEs will utilise labour intensive technologies (Aremu and Adeyemi, 2011; Salami, 2003; Muritala et al 2012) and thus have an immediate impact on employment generation (Ayozie and Latinwo, 2010; Aigboduwa and Oisamoje, 2013; Udechukwu, 2003; Aremu and Adeyemi, 2011); they can usually be established rapidly and put into operation to produce quick returns; SMEs development can encourage the process of both inter- and intra-regional decentralization (Ogujiuba et. al., 2004); and, they may well become a countervailing force against the economic power of larger enterprises (Salami, 2003). More generally the development of SMEs is seen as accelerating the achievement of wider economic and socio-economic objectives, including poverty alleviation (Safiriyu and Njogo, 2012; Ayozie and Latinwo, 2010; Udechukwu, 2003).

Small and Medium Scale Enterprises have been acknowledged to have huge potential for Sustainable Development. Yet in Nigeria, the Small and Medium Scale Enterprises sub-sector has stagnated and remains relatively small in terms of its contribution to the Gross Domestic Product (GDP). Activity mix in the sector is also quite limited - dominated by import dependent processes and factors. Although there is no precise data, imprecise indicators show that capacity utilization in the sector has improved perceptibly since 1999 due to the return of democratic rule and the economic reforms of the government. But the sub-sector is still faced with a number of constraints with inadequate financial facilities as the principal constraint (Oduyoye et al, 2013).

Finance has been viewed as a critical element for the development of Small and Medium Scale Enterprises (SMEs). Previous studies have decried the limited access to financial resources available to smaller enterprises compared to larger organisations and the consequences for their growth and development (Berger and Udell, 2004; Wattanapruttipaisan, 2003; Ogujiuba et. al., 2004; Hossain, 1998 etc.). Typically, Small and Medium Scale Enterprises (SMEs) face higher transactions costs than larger enterprises in obtaining credit (Lee, 2004). Poor management and accounting practices have hampered the ability of Small and Medium Scale Enterprises (SMEs) to raise finance (Lee, 2004). Information asymmetries associated with lending to small-scale borrowers have restricted the flow of finance to SMEs (Berger and Udell, (2004). In spite of these claims however, some studies show a large number of Small and Medium Scale Enterprises (SMEs) fail because of non-financial reasons (Asaolu et al, 2005; Lawrence, 2003; Wattanapruttipaisan, 2003).

While finance is obviously not the only problem militating against the development of the Small and Medium Scale Enterprises (SMEs), it is certainly the most formidable (Lawrence, 2003). Like any other investment in the real sector of the economy, investment in Small and Medium Scale Enterprises (SMEs) is relatively bulky because of the need for fixed assets such as land, civil works, buildings, machinery and equipment and movable assets. Invariably, loans to Small and Medium Scale Enterprises for capital investment must be long-term in order to avoid a fatal mismatch between project gestation and loan maturity. Consequently, the cost of funds is a critical factor in the sense that it impacts significantly on the competitiveness and survival of these enterprises. Long gestation in an unstable environment coupled with unsound financial packaging tends to subject SMEs to a high failure rate, which in turn makes the sector relatively risky and unattractive to the banking system’s credit.

Small and Medium Scale Enterprises (SMEs) often operate at such a low scale that is unattractive to banks (Ugoani and Dike, 2013). Many of them are unincorporated and banks are not forthcoming in investing in a multiplicity of small ventures that are scattered all over the country. Besides, Small and Medium Scale Enterprises are mostly family businesses and they are therefore reluctant to open their businesses up, especially to the banks that they regard as intruders. The concomitant effect is that less financial facilities are made available to Small and Medium Scale Enterprises (SMEs) by banks.

Firms depend on a variety of sources of financing, both internal and external (Terungwa, 2012). The relationships among these sources and their effects on investment, however, remain unclear in the literature. In the case of SMEs, bank credit or loan is major alternative of external funding. According to Valverde et al (2005) bank credit play a crucial role in providing external financing to Small and Medium Scale Enterprises (SMEs). But in Nigerian context, this crucial source of finance for Small and Medium Scale Enterprises is apparently non-functional (Kadiri, 2012). This is evident in the ratio of loans to Small Scale Enterprises to Commercial banks’ total credit, which shows that a meager 0.13% of commercial banks’ total credit was granted to Small Scale Enterprises in the last quarter of 2012 (CBN, 2012). More worrisome is the fact that this ratio has been falling over the years and continued unabated in the post-consolidation era.

STATEMENT OF THE PROBLEM
Several studies have identified financial constraint as the major obstacle to Small and Medium Scale Enterprises Development in developing countries including Nigeria. For instance, Adelaja (2003) argues that the access to institutional finance has always constituted a pandemic problem for SME development in Nigeria. He recalled that in the past, a number of schemes have been put in place to provide special credit lines/windows for SMEs but this achieved very limited impact.

The primary focus of this study emanates from the fact that small scale enterprises owners do not have sufficient finance to carry on their due to the low saving culture of the people in this part of the world. The reason for this is not far fetch: low level of income basically. While it is an established fact that Small and Medium Scale Enterprises face financial challenges, no research has been conducted to investigate the effect the financial problem on their contribution to economic development. Asaolu et al (2005) and many other authors and researchers have deduced that the financial challenges mar the developmental role of Small and Medium Scale Enterprises. But this may not be true especially in the case of Nigeria where the informal sector, which is constituted largely by the Small and Medium Scale Enterprises play a very important role in the development of the nation’s economy. Therefore, this study seeks to evaluating the Small and Medium Scale Enterprises (SMEs) financing in Nigeria.

OBJECTIVES OF THE STUDY
The main purpose of this study is to identify and consequently analyze the most effective and efficient way through which Small and Medium Scale Enterprises could be financed. In so doing, the researcher intends giving an in-depth information and analysis on the various strategies through which Small and Medium Scale Enterprises can be financed.
In view of the above, the researcher intends to find out the following:
(i) to examine the trend of financial support given to Small and Medium Scale Enterprises.
(ii) to examine the contribution of Small and Medium Scale Enterprises to the economy of Nigeria.
(iii) to appraise the contribution of commercial banks to the funding of Small and Medium Scale Enterprises in Nigeria?
(iv) to identify the constraints confronting the financing of Small and Medium Scale Enterprises in Nigeria.
(v) to find suitable strategies that will improve the financing, growth and development, and survival of Small and Medium Scale Enterprises in Nigeria.

RESEARCH QUESTIONS
The study would examine the following questions:
1. What is the trend of financial support given to Small and Medium Scale Enterprises in Nigeria?
2. What impact do Small and Medium Scale Enterprises make to Nigeria’s economic growth?
3. What contribution has commercial banks made to the funding of Small and Medium Scale Enterprises in Nigeria?
4. What are the constraints confronting the financing of Small and Medium Scale Enterprises in Nigeria?
5. How could the financing, growth and development of Small and Medium Scale Enterprises be improved in Nigeria.

RESEACH HYPOTHESES
Hypothesis I
H0 - That there is no relationship between Gross Domestic Product (GDP) and the operations of Small and Medium Scale Enterprises (SMEs) in Nigeria.
H1 - That there is relationship between Gross Domestic Product (GDP) and the operations of Small and Medium Scale Enterprises (SMEs).

Hypothesis II
H0 - That there is no relationship between the loan granted to Small and Medium Scale Enterprises (SMEs) and the interest rate in Nigeria.
H1 - That there is relationship between the loan granted to Small and Medium Scale Enterprises (SMEs) and the interest rate in Nigeria.

SIGNIFICANCE OF THE STUDY
Small and Medium Scale Enterprises in Africa rely largely on own savings, not only to grow but also to innovate, firms often need real services support and formal finance assistance, failing which under-investment in long term capabilities (training and R & D) may result (Oyelaran-Oyeyinka, 2003). This study is significant because it would help to evaluate the operations of a vital segment of the industrial sector – Small and Medium Scale Enterprises, which have been identified as having very high potential in promoting economic growth and development (Oni and Daniya, 2012). The evaluation shall be done with special focus on their financing thereby adding to the existing literature on the subject matter.

RESEARCH METHODOLOGY
Annual data coverage of various years shall be used for the empirical analysis in this research. The data collected include: Loan granted to SMEs by Commercial Banks, total credit granted by the Commercial Banks, lending rate of Commercial Banks, amounts set aside and invested under the Small and Medium Industries Equity Investment Scheme (SMIEIS), loan and advances granted by the Bank of Industry (BOI), and loan disbursements of Nigerian Agricultural Cooperative, Rural Development Bank (NACRDB) now Bank of Agriculture (BOA), and the Gross Domestic Product (GDP). External financial support to SMEs from international organizations including the World Bank and the African Development Bank (ADB) shall also be assessed.

The research method to be applied in this study is quantitative. Besides, both the historical and ex-post facto research design shall be adopted. While the former shall be used to study and appraise the chronological level of financial facilities available to Small and Medium Scale Enterprises in Nigeria and the level of development of the country, the latter shall be used to establish a cause and effect relationship among the variables that correlate. Regression analysis, tables, charts and ratio analysis shall also be used to examine the pattern, trend and composition of SME financing in Nigeria over the years.

SCOPE OF THE STUDY
This research work focuses on the financing of Small and Medium Scale Enterprises (SMEs) in Nigeria. This study pays more attention on the loan granted to SMEs by Commercial Banks, and the financial support given by specialized banks, and schemes with the aim of evaluating their availability, accessibility and adequacy for Small and Medium Enterprises Development in Nigeria.
Most of the information and data needed for the study would be gathered from existing literature and from relevant government agencies such as the Central Bank of Nigeria, National Bureau of Statistics (NBS) etc. The hypotheses testing are restricted to the period between 1986 and 2011 due to non-availability of needed data.

PLAN OF THE STUDY
This study shall be divided into five chapters. The first chapter, which is the introduction, shall presents the background to the study, statement of the problem, objectives of the study and significance of the study among others. Chapter two shall review existing literature on the financing of Small and Medium Enterprises, the constraints on their financing, their role in economic development and so on. Chapter three shall explain the research methodology to be applied in the study. Chapter four shall focus on the data presentation and analysis while the concluding part of the study is chapter five where in a nutshell, the summary of the findings, the conclusion, and recommendations shall be presented.

REFERENCES
Adelaja B. O. (2003) Financing Small and Medium Enterprises under SMIEIS. Being a paper presented at Central Bank of Nigeria (CBN) Seminar on Small and Medium Industries Equity Investments, August. Lagos: CBN, no. 4, pp.100-114.
Aigboduwa, J. E. and Oisamoje, M. D. (2013) “Promoting Small and Medium Enterprises in The Nigerian Oil and Gas Industry”. European Scientific Journal. Vol. 9, no. 1, pp. 244-261.
Aremu, M. A. and Adeyemi, S. L. (2011) “Small and Medium Scale Enterprises as A Survival Strategy for Employment Generation in Nigeria”. Journal of Sustainable Development. Vol. 4, no. 1, pp. 200-206.
Asaolu, T. O.; Oladoyin, A. M. and Oladele, P.O. (2005) “A consideration of the problems and prospects of revitalising the Small-Scale Sector in Nigeria”. European Journal of Scientific Research. Vol. 7, no. 3, pp. 5-11.
Ayesha, B. (2007) Entrepreneurship Development for competitive Small and Medium Enterprises. Tokyo: Asian Productivity Organization.
Ayozie, D. O. and Latinwo, H. K. (2010) “Entrepreneurial developments and small scale industry contribution to Nigerian national development- A marketing interface”. Information Management and Business Review. Vol. 1, no. 2, pp. 51-68.
Berger, A. N. and Udell, G. F. (2004) A More Complete Conceptual Framework for SME Finance. In: Small and Medium Enterprises: Overcoming Growth Constraints World Bank, MC 13-121, October 14-15.
Central Bank of Nigeria (2012) Statistical Bulletin. Abuja: Central Bank of Nigeria (CBN).
Hossain, N. (1998) Constraints to SME Development in Bangladesh. Job Opportunities and Business Support (JOBS) Program, October.
Kadiri, I. B. (2012) “Small and Medium Scale Enterprises and Employment Generation in Nigeria: The Role of Finance”. Kuwait Chapter of Arabian Journal of Business and Management Review. Vol. 1, no. 9, pp. 79-93.
Lawrence O. A. (2003) Critical Success Factors in the Implementation of SMIEIS. Being a paper presented at Central Bank of Nigeria (CBN) Seminar on Small and Medium Industries Equity Investments, August. Lagos: CBN, no. 4, pp. 86-99.
Lee, F. (2004) Financing innovative SMES in a global economy. In: 2nd OECD Conference of Ministers responsible for Small and Medium-Sized Enterprises (SMES) on Promoting Entrepreneurship and Innovative SMES in a Global Economy: Towards a more responsible and inclusive Globalisation, 3-5 June, Istanbul, Turkey: Organisation for Economic Co-Operation and Development (OECD).
Muritala, T. A.; Awolaja, A. M. and Bako, Yusuf. A. (2012) “Impact of Small and Medium Enterprises on Economic Growth and Development”. American Journal of Business and Management. Vol. 1, no. 1, pp. 18–22.
Oduyoye, O. O.; Adebola, S. A. and Binuyo, A. O. (2013) “Financing Small Business in Ogun State, Nigeria: the critical role of the Small And Medium Enterprises Development Agency of Nigeria (SMEDAN)”. International Journal of Accounting Research. Vol. 1, no. 1, pp. 32-43.
Ogujiuba, K. K.; Ohuche, F. K.; and Adenuga, A. O. (2004) “Credit Availability to Small and Medium Scale Enterprises in Nigeria: Importance of New Capital Base for Banks – Background and Issues”. AIAE Working Paper, pp. 1-25.
Oni, E. O. and Daniya, A. A. (2012) “Development of Small and Medium Scale Enterprises: The role of Government and other Financial Institutions”. Arabian Journal of Business and Management Review. Vol. 1, no. 7, pp. 16-29.
Oyelaran-Oyeyinka, (2003) “Financing and Development of Small-sale industries in Nigeria”. Central Bank of Nigeria Economic and Financial Review. Vol. 24, no. 4, December.
Safiriyu, A. M. and Njogo, B. O. (2012) “Impact of Small and Medium Scale Enterprises in the generation of employment in Lagos State”. Kuwait Chapter of Arabian Journal of Business and Management Review. Vol. 1, no. 11, pp. 107-141.
Salami, A. T. (2003) Guidelines and Stakeholders Responsibilities in SMIEIS. Being a paper presented at Central Bank of Nigeria (CBN) Seminar on Small and Medium Industries Equity Investments, August. Lagos: CBN, no. 4, pp. 50-65.
Terungwa, A. (2012) “Risk Management and Insurance of Small and Medium Scale Enterprises (SMES) in Nigeria”. International Journal of Finance and Accounting. Vol. 1, no. 1, pp. 8-17.
Udechukwu, F. N. (2003) Survey of Small And Medium Scale Industries and their potentials in Nigeria. Being a paper presented at Central Bank of Nigeria (CBN) Seminar on Small and Medium Industries Equity Investments, August. Lagos: CBN, no. 4, pp. 6-18.
Ugoani, J.N.N. and Dike, O. N. (2013) “Challenges of Bank Credit among Small and Medium Enterprises (SMEs) in Nigeria”. Journal of Economics and Sustainable Development. Vol. 4, no.6, pp. 84-90.
Valverde S. C., Fernandez F. R.and Udell G. F. (2005) Bank Market Power and SME Financing Constraints. Being a paper presented at the I Fall Workshop on Economics, October. Granada, pp. 1-62.
Wattanapruttipaisan, T. (2003) “Four Proposals for Improved Financing of SME Development in ASEAN”. Asian Development Review. Vol. 20, no. 2, pp. 1-45.

 

 

PROJECT PROPERTIES
Project Status
Available
Number of Chapters
5
Number of Pages
124
Number of Words
18,837
Number of References
70
Project Level
B.Sc.
Price
N10,000 (Non-Negotiable)
Abstract, Regression Data and Results are included
How to Pay for this Project . . . .CLICK HERE

Keywords: small scale enterprises, financing of small and medium scale enterprises

 

 

CONTACT CHANNELS

 E-mail: projectfaculty@yahoo.com OR projectfaculty@gmail.com OR mail us here

 

FRAUD ALERT
BEWARE OF FRAUDULENT PROJECT SITES!
Anyone that claims to be our agent/representative is a fraudster. Pay directly to ONLY our company's accounts NOT TO ANY INDIVIDUAL!
If we fail to send this project to you after payment, report to the bank you paid to, the Police and the EFCC with our Account Name and Account Number.