ROLE AND PROBLEMS OF FINANCIAL INSTITUTIONS TO THE GROWTH OF SMALL SCALE BUSINESS IN NIGERIA (A Study Of Union Bank Of Nigeria Plc, Owerri, Imo State 2010-2014)

ABSTRACT
The purpose of this study is to x-ray the mobilization and channeling of fund to business sectors. The study is to access the contributions of the Nigeria banking industry to the growth of small and large scale business as well as the role of finance in enhancing the growth and development of small and medium scale business. This lies in identifying the major problems confronting these enterprises which are the issue of financing (fund). Also, the various sources of funds, which are available for the small scale enterprises, are also highlighted. The study involves a field survey; the required data were collected through primary and secondary data. Secondary data were collected from textbooks, newspapers, journals seminar papers and other publication that dealt with related subjects. Primary data were collected from various managers of small scale business. 

TABLE OF CONTENTS
Title Page
Approval Page
Dedication
Acknowledgment
Abstract 
Table of Contents

CHAPTER ONE
1.0 INTRODUCTION 
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Research questions 
1.5 Significance of the study
1.6 Scope of the study
1.7 Limitations of the study
1.8 Definition of terms

CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction 
2.2 The regulatory institution within the financial system 
2.3 The role of financial institution 
2.4 Small scale business ownership 
2.5 Ways to go into small scale business 
2.6 Small business and the economy 
2.7 Importance of small business 
2.8 Merit of small scale business
2.9 Causes of small business failure 
2.10 Government and small business enterprise 
2.11 Funding problems of small scale business 
2.12 Sources of funds 
2.13 Roles of financial institution in small scale business 
2.14 Nature and dimensions of small scale business
entrepreneurship

CHAPTER THREE
3.0 RESEARCH DESIGN AND METHODOLOGY
3.1 Introduction 
3.2 Research design 
3.3 Sources / Method of data collection
3.4 Population and sample size 
3.5 Sampling techniques
3.6 Validity and reliability of measuring instrument 
3.7 Method of data analysis

CHAPTER FOUR
4.0 PRESENTATION AND ANALYSIS OF DATA
4.1 Introduction 
4.2 Presentation and analysis of data
4.3 Interpretation of data

CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings
5.2 Conclusion
5.3 Recommendations
Bibliography 
Appendices 

CHAPTER ONE

1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Financial institutions have a very great role to play in the growth of small business everywhere in the world but I will limit my discussion to their roles in Nigeria.
Financial institution could be seen as an institution which primary functions is collecting and giving out funds to individuals, firms, organizations etc for business purpose from the definition of financial institutions or its functions, one can see that financial institution could aid the growth of small scale business. How can this be done or achieved? What is the next question that could come to one’s mind it could be achieved by the financial institution giving out funds in form of funds? Overdrafts and aid etc on request from small scale business man or woman.
I will not forget to explain what a small business is, it can be viewed by different ways or views, a lot of factors are being considered before calling a business small scale business. Meaning what Mrs. Olu called small scale business might not be what Mrs. U.K may consider as small scale business. 
Therefore, a small scale business has been explained by these few people and school of thought, Blott Lawrence 1973 defines small scale business to be any industry which is independently owned and operated and not dominant in its area of operation.
The Committee for Economic Development (CED) of the United State defined small scale business of having at least two of the under-listed characteristics. 
a. Manager and also owners 
b. Owners supply capital
c. Small in size within the industry

1.2 STATEMENT OF THE PROBLEM 
1. Small scale industries are not capable to source capital easily from Union Bank Plc and this problem prevents entrepreneurs from procurement of machinery and equipment required for production. 
2. The bank are not helping matters because their conditions for giving loans are not easily met and the small scale industries owners are unable to provide their request with well structured and circulated feasibility studies. 
3. The inability of the bank to support the entrepreneurs through loan and other instruments such as leasing of equipment in low capital utilization volume of production, provision of services and sales. 
4. The loan granted suffers additional problems of high interest rates and the burden creates higher probability of default in repayment of loans.
5. The rapid policies of banks contrary to C.B.N guidelines and the attendant lack of collateral securities from the entrepreneurs created additional problems of inability of procure and utilize capital from Union Bank Plc.

1.3 PURPOSE OF THE STUDY
The reason for the study of the function of financial institution in small scale business is that it help individuals, small scale business owners and all the sundries to be informed of the role of financial institution to the economy and at the same time that they can take an advantage of the role and develop themselves, their families and the nations at large. These roles include giving loans, advanced overdrafts, grants and aids and advisory services. The roles when utilize properly by small business owner help in the growth of their business. Financial institutions have some problems they are confronted with too. These problems include borrowers not paying back at stated time, government policies and regulations etc. This problem affects the smooth running of financial institution because tied up capital that would have been used for further development of the sector. Government regulation or policies also affects financial institution because, government might make a policy to correct certain abnormalities in the economy. The policy might affect their project as such it constitutes a problem.

1.4 RESEARCH QUESTIONS 
By answering the following question, the objective of this study would be achieved.
1. What are the functions of financial institution in small scale business?
2. Doe financial institutions provide loans and advance to small scale owners? 
3. Do small scale businesses have enough funds finance their business?
4. Are smaller scale businesses aware of banking facilities available to them?
5. Does small scale firm have access to bank and other sources of funds?

1.5 SIGNIFICANCE OF THE STUDY
The financial institutions play a very significant role in the growth of small scale business. The roles they play include:
1. Giving of loans to small scale business
2. Giving of overdraft
3. They render business advisory services.
Giving of Loans to Small Scale Business: This is one of the role plays by financial institution in the growth of small scale business. They give loans to small business man or woman on request. This aids the small scale business men to perform better compared t when they have small capital.
Giving of Overdraft: Financial institution allows small scale business men have a savings account deposit to with draw from their accounts more than they have if they wish. This excess allows or enables the capital at hand to increase, the additions of the excess fund to the amount withdraw would aid the small scale businessmen to plan better than they would have done if they withdraws the main fund he has in his accounts. 
They Render Business Advisory Services: Financial institution render advisory services to small businessmen. This advisory service they run render aids the small scale business who acts upon the advice rendered. It aids them to grow in business. Small scale businessmen are thought how to introduce simple record keeping and accounting in their operation. This is because, most business concerns do not keep accurate record of their business and this can lead to business failure. Banks or financial institutions providing the services have reported significant success.

1.6 SCOPE OF THE STUDY
The research was to determine the function institution in small scale business in Nigeria. The research carried out in-depth study on the operations of financial institutions to the growth of the said industries. 
Due to the current emphasis on the industrialization of the industry in order to reduce countries export bill from foreign countries and unemployment, the study focuses attention on the evaluation of small scale industries that obtains the needed heights and capacity. The research covers selected small scale industries in Enugu.
Small scale industries as used in this study are those indigenously owned fully by Nigerians and with an annual turnover not exceeding five hundred thousand naira (N500,000).

1.7 LIMITATIONS OF THE STUDY
Like in any other human activities the study has its limitations and constraints. High cost of materials resources has constituted a constraint to the study. Time consideration and distance involved in collecting the primary data is another limitation of the study. This is because the time lag between the ends of course works and the submission of the project is greatly inadequate.
Moreover, interview, attitude of respondents constituted a constraint on the research on the research as some respondents gave inaccurate information or failed to return their questionnaires.

1.8 DEFINITION OF TERMS 
Bank: A financial institution that keeps custody of valuable such as money, gold, jewelries, etc for customers. They charge customers for their services.
Entrepreneur: The one who conceives the idea of a business runs the business, bears the risk and enjoys profit or loss.
Financial Institution: Are institution responsible for collecting and giving out funds to individuals, firms organization etc for business purpose. 
Grant: It is financial assistance by financial institution or government which is not repayable.
Loan: Financial assistant rendered by financial institution to borrowers. It is payable and collateral is required before financial institution can grant the loan.
Manager: One who adopts a process for running the affairs of the business.
Overdraft: It is a king of loan granted by banks, but before this loan is granted, the person who wants the loans must have an account in the bank. It is a situation where an account holder in a bank withdraws above the amount he has in his account. 
Small Scale Business: A business in which the managers are the owner’s areas of operation mainly local owner’s supply capital and small in size within the industry.