AN EVALUATION OF SOURCES AND APPLICATIONS OF FUND FOR SMALL SCALE INDUSTRIES IN NIGERIA

ABSTRACT

          This study which seeks to evaluate the alternative finding arrangement available to the small scale enterprises sector identifies the key to unlocking the economic potential of Nigeria. However, the sector is constraints by a number of facilitates high cost of credit, poor infrastructures, that is, power transportation, telecommunication poor linkages among the enterprises, poor technology, poor Implementation  of government programs and policies toward the development of small –scale enterprises sector. The study reveals that the major sources of credit available for the establishment and expansion of small – scale enterprises in Nigeria is personal saving, banks and corporative.

          However, the problem associated with bank credits is the demand for collateral, high cost of credit and loans administrative cost. A viable means of promoting self – reliance in economic development as well as introducing diversity into regional, national and local economics is through the deliberate promotion of small –scale enterprises and encouraging entrepreneurial spirit and skill in business venture. There are different sources of credit available to the small – scale enterprises which include among others financial institution, government agencies, non governmental organizations, personal savings, friends and family, international donor agencies, cooperatives. The importance of small and medium scale enterprises as being crucial to the economic development strategies cannot be over emphasized. It is therefore important to consider conditions that would ensure sustained growth in this sector. The small – scale enterprises by promoting product innovation and building institutional capacity.

          Improving small –scale enterprises access to credits require an increase in the number of financial institution that fund lending to SMES to be profitable and therefore sustainable especially the microfinance institution (MFIs). Government can also improve in the provision of infrastructural facilities. Easy accessibility to credit through specialized or development oriented banking or financing institutions and at preferential interest can go a long way to boost the sector.

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