ROLE OF COMMERCIAL BANKS IN SMALL SCALE BUSINESS FINANCING

CHAPTER ONE

1.0  INTRODUCTION

1.1 BACKGROUND OF THE STUD

According to Orjih, Commercial Banking in Nigeria dates back to the early colonial period. The decline in Banker system of trade and the rise in financial transaction of the colonial government required an institution in the form of commercial bank for safety and transmission of funds.

It is privately owned and established for the purpose of making profit for their owners.

According to the small scale Business act of 1953, a small-scale business firm is one which is independently owned and operated and not dominated in its field of operation. Small scale Business is owned, managed, controlled by one or two persons, in family influenced in decision making, has an un differentiated organizational structure, has relatively small share of the market and employers less than 50 people.

The commercial Bank performs certain duties to small scale Business to enable them carry their Business effectively. Some of their duties are accepting deposit, granting loan and overdraft facilities, agency services, providing station reports standing order, call credit facilities investment advise and soon. Through these role performed by the commercial Bank, it enables small scale business to plan their business properly, keep adequate records, maintain proper accountability, pursue planed expansion, utilize professional assistance, improve your business knowledge through apprenticeship programmers and formal education and so on.

1.2 STATEMENT OF PROBLEM AND THE OBJECTIVE OF THE STUDY

The small scale Business owned individual are faced by some problems, which are under capitalization, poor business accountability, poor record keeping, lack of business knowledge and experience, poor wrong location.

1.3 SIGNIFICANT OF THE STUDY

These research works is to be used for the purpose of learning this study is a dynamic one for the reason it cannot be said to have been completely treated in ones work like this. There are other scholars can use the work as a basic for further research work.

1.4 SCOPE AND LIMITATION OF THE STUDY

Although certain journals, textbook and magazine were used on the course of the study were in the role of commercial Bank in small scale Business due to the limitation the terms paper was carried out within the limited time available.

1.5 DEFINITION OF TERMS

COMMERCIAL BANK: It is a privately owned bank; it is established for the purpose of making profit for their owners and grant loan on short term basic to customer.

LOAN: It is classified as problem credit when they cannot be repaid to a financial facility granted by a bank, which intended to be applied for financing a specific purpose.

FUND: Can be described as increase in the liability or equity account or a decrease in the asset account.

FINANCE: Is the possession of funds when it is needed for investment.

CREDIT: Is a special form of account payable and it is the most popular source of short-term credit in small and medium scale business in developed and developing economics. It involves the purchase of goods and services and suspending payment to an agreed future data.