INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Micro Small and Medium Scale enterprises are sub-sector of the industrial sector which plays a crucial role in the industrial development (Ahmed, 2006). Following the adaptation of economic reform programme in Nigeria in 1981, there have been several decisions to switch from capital intensive and large scale industrial projects which was based on the philosophy of import development to the development of Small and Medium Scale Enterprises, which have better prospect for developing domestic economy, thereby generating the required goods and services that will propel the economy of Nigeria towards development. It is based on this premises that (Ojo, 2009), argued that one of the responses to the challenges of development in developing countries particularly, in Nigeria, is the encouragement of entrepreneurial development scheme.
Despite the abundant natural resources, the country still finds it very difficult to discover her developmental bearing since Independence. Quality and adequate infrastructural provision has remained a night-mare, the real sector among others have witnessed downward performance while unemployment rate is on the increase. Most of the poor and unemployed Nigerians in order to better their lots have resorted to the establishment of their own businesses. Consequently, Entrepreneurship is fast becoming a house hold name in Nigeria. This is as a result of the fact that the so called white collar jobs that people clamour for are no longer there. Even, the touted sectors (Banks and companies) known to be the largest employer of labour are on the down-turn following the consolidation crisis and fraudulent practices of the high and mighty in the banking sector. The companies of course are folding up as a result of erratic power supply, insecurity and persistent increase in interest rate which has lead to high cost of production and undermines profit making potentials of companies operating in Nigeria. As a result of banking sector practices and continuous folding up of companies, a lot of Nigerians are thrown into unemployment which inevitably detriment the economic situation of the country.
Since the office jobs that people desire are no longer there for the teeming population, and the few ones that succeeded in getting the jobs are thrown out as a result of the factors identified above, the need for the government and the people to have a rethink on the wayout of this mess became imperative. Hence, the need for Micro Small and Medium Scale Enterprises (MSMEs) became a reality as a means of ensuring self independent, employment creation, import substitution, effective and efficient utilization of local raw materials and contribution to the economic development of our dear nation (Nigeria). All the afore stated benefits of Micro Small and Medium Scale enterprises cannot be achieved without the direct intervention of the government and financial institutions (Financial Intermediaries). Over the years a number of policies have been formulated by the government with a view to developing Micro Small and Medium Scale Enterprises. The Nigerian government under the then leadership of Chief Olusegun Obasajo promulgated micro-finance policy and other regulatory and supervisory frame work in 2005.
This paper will therefore examine the Financial Intermediation and Small and Medium Scale Enterprises vis-a-vis roles played by the government as well as the programs formulated in achieving MSMEs development in Nigeria.
1.2 STATEMENT OF RESEARCH PROBLEM
The problem of unemployment is a nationwide phenomenon which has been the major factor that endangers Nigerian socio-economic development. Unless giant strides and purposeful plan of action are put in place by the government and individuals, the problem will continue to persist. However various schemes in Nigeria have contributed to the growth of Micro Small and Medium Scale Entrepreneurs MSMEs in order to combat these challenges such as unemployment as a major problem in developing the economy of the nation (Emanuel
Daniya, 2012).
In considering the magnitude and strength of people within Kano State, several committees have been formed to train and develop entrepreneurs within the state. These committees also pose as financial intermediaries between the Kano State Government to the communities in which these entrepreneurs are produced.
There are problems in the society with regards to technical and vocational education that is lacking in terms of modern methods of equipment fabrication to alleviate the intensive labour input that is required in businesses such as phone repair, saloon, video coverage as such in Micro Small and Medium Scale Entrepreneurs.
If Nigeria were to achieve an appreciate success towards attaining the Millennium Goal for 2017, one of the sure ways would be vigorously pursue the development of it small scale industries and understanding at the same time on how the business should survive under a security challenge environment i.e. strategy in combating treats of MSMEs especially at the Financial intermediary level by effectively taking its course.
(Oluboba, 2008) identifies the main strategic problems of Micro Small and Medium Scale Entrepreneurs. This is as a result of poor management practices, constrain access to money and capital markets, poor infrastructural facilities, shortage of skilled manpower, lack of access to information, low equity participation from promoters because of insufficient personal saving due to their level of puberty and low return on investment. Therefore, some of these stated problems will be basic areas in which this study will proffer solution to.
1.3 OBJECTIVE OF THE STUDY
In attempting to develop the economy of the nation, one must be cognizant of the financial intermediaries and Micro Small and Medium Scale Entrepreneurs in that nation. As a result of this, the primary objective of this study is to examine financial intermediaries in relation to Micro Small and Medium Scale Entrepreneurs in the area businesses and how these financial intermediaries facilitate the promotion and development of a structured and efficient Micro, Small, and Medium Scale Entrepreneurs (MSMEs) Sector that will enhance
Sustainable economic development in Kano state through various forms of businesses.
Subsequent objectives are:
v To find out if the government through its appropriate entrepreneurial organs that is the Financial Intermediaries are contributing positively to the development of Micro Small and Medium Scale Entrepreneurs in Kano State.
v And to ensure self independent, employment creation, effective and efficient utilization of local raw materials and contribution to the economic development of our dear nation (Nigeria)
v To proffer solutions to strategic problems that is facing the Micro Small and Medium
Scale Entrepreneurs in Nigeria.
1.4 RESEACH QUESTION
The under-listed questions are what this study sought to provide answers to:
1. What is distinctive about Financial Intermediation?
2. What are the major challenges faced by Micro Small and Medium Scale Entrepreneurs (MSMEs)
1.5 SIGNIFICANCE OF THE STUDY
It is with the belief of the researcher that, it will help the entrepreneurs in providing solutions to the problems associated with the frequent winding up of Small Businesses as a result of poor Financial Intermediation and lack of adequate support by the government in improving the Micro Small and Medium Scale Enterprises.
It is also hoped that the study will help in educating prospective entrepreneurs on how best can effectively and efficiently utilize the local raw materials and contribute better to the economic development of our dear nation (Nigeria).
Finally, it is hoped that this research will add to knowledge techniques and strategy in combating treats of Micro Small and Medium Scale Entrepreneurs MSMEs especially at the Financial Intermediary level.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
This study has limitations, which proffer opportunities for future research. There exist considerable research about Financial Intermediation as well as Micro Small and Medium Scale Entrepreneurs among small scale industries and how these small scale industries strive hard to survive and dramatically how they affect the performance of the economy of the nation.
This study recognizes that responding to industry-level, different ways of financial intermediations have to be considered, that is finding ways in which these industries can be supported in order to hold long and improve in their businesses.