PROBLEMS OF FINANCING SMALL-SCALE INDUSTRIES AND POSSIBLE SOLUTIONS TO IT

CHAPTER ONE

INTRODUCTION

1.1 STATEMENT OF THE STUDY

There are many problems that is hindering small-scale business through community banks. But the main thing we want to study is firstly how small scale business are been financed through community banks the problems and their possible solutions.

PURPOSE OF THE STUDY

The purpose of this study is to investigate into the present economic lives of small scale business with view of identifying the major problems that affect financing of mall scale business bearing in mind that adequate finance stands as an energizer to it’s operation. Also to find out how small scale industries obtain finds for their establishment. Also to find out how community bank finance small scale industries. And lastly the problems facing community banks operation and the solution of to there problem.

1.2 RATIONAL OF THE STUDY

Financing small-scale business is necessary because they generate employment.

1. Employment generation: It is this point that has led to the creation of the present poverty eradication scheme. Small-scale business generates employment in the areas of both skilled and unskilled labour. Many people instead of staying idle have resorted to creation of employment themselves by owning small-scale business.

2. Increased exports of manufactured goods: Many small-scale business have grown to the extent of exporting their products to other countries.

3. Attract foreign capital: With the expiration of manufactured goods there is inflow of foreign capital into the country. With this inflow the business grows and developments leading to increase in the standard of living.

4. They help in bringing down goods and services nearer to the masses in general and to their customers in particular hence their major problem is money, government should grant them loan through community bank.