CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The financing of micro, small and medium enterprises investment is today the major pre-occupation in various economies in the world and Nigeria in particular, there is a general consensus among such enterprises stakeholders in the country that accessing finances and financial services is the major problems affecting the sector and the economy. Adequate and access financing is a necessary condition for the survival of any business enterprise and considering the fact that the contribution of micro small and medium enterprise to employment generation and capacity building.
It was based on those fact that the successive government in Nigeria initiated programmes and policies toward financing MSMEs with the intention of enhancing availability of funds for enterprises development in the country.
Some of this policies include the one issue by central bank of Nigerian (CBN) annual guidelines for banking operation in the country, thus guidelines have consistently serve as a policy directing commercial banks to extend Ten (10) persons of all loan advances to micro small and medium enterprises. The policy was later modified and allowed banks to extend 10% of their profit before tax to such enterprises. Also in order to encourage entrepreneur micro, small and medium to secure loan the government come up with policy and programmes Nigeria export import Bank (Nexim) was
established to offer incentive of guarantee and facility to local entrepreneurs to boost export, the introduction of national credit guarantee scheme (NCGS) aimed at providing financial support to mention just but few.
Although, if efficiently carried out/implemented the economy would be able to mobilize or yield proportionate result in terms of financial accessibility, that no viable project like micro, small and medium enterprises is frustrated due to lack of finance.
1.2 STATEMENT OF THE PROBLEM
There has been public outcry and critics of Governments policies and programmes especially toward financing of micro small and medium scale enterprise, the society see the government as neglecting their functions and responsible to the society by paying little attention to public which they are meant to serve.
The extent to which financial intermediation through policies and programmes can favourably influence the national economy depends on the number of policies / programmes that are put in place by government and in accordance to the financial needs of such businesses.
Another fundamental issue which needs to be properly analysed has to do with the possible effects of those policies and programmes of micro, small and medium enterprises if properly implemented.
1.3 OBJECTIVES OF STUDY
1. To review government policies and programmes toward financing of micro, small and medium enterprises investment in Nigerian
2. To Ascertain the importance of such programmes and policies to MSME investment in Nigeria
3. To find out the problem encountered by MSME financing
in Nigeria
4. To find how to access to those policies and programmes 1.4 SIGNIFICANCE OF STUDY
The benefits to be derived from thus type of study is
multi – facet
Firstly, the micro, small and medium enterprise
operators will benefit from the study, because it is going to serve as an eye opener to them, that is, they will identify the policies and programmes in financing of the business by the government and how to have access to such programmes. Also, to the government, the will understand the impact of such policies and programmes to MSMEs operators and the importance in promoting economic development. Lastly, the findings of this study will serve as a source of material, (secondary data) for students, MSMEs operator researchers who are carrying out similar study of this nature, and also my own contribution to the development of knowledge of MSMEs business financing policies and programmes by the government.
1.5 RESEARCH QUESTION:
As a consequence of the objectives high lighted, this study will attempt to provide answers to the following questions.
1. What are the financing problems faced by MSMEs before the government intervention through those policies and programmes?
2. What policies and programmes do the government uses in assisting the financing MSME investment in Nigeria?
3. How do MSME operators get access to those policies and programmes?
4. What is the effect of such policies/Programmes to MSME investment?
1.6 STATEMENT OF HYPOTHESIS
The purpose of the hypothesis is to enable the researcher make inference about an unknown parameter, a test is performed in order to verify whether a hypothesis is true or false by using information obtained from a sample from one of the question or questions obtained in the questionnaire related to the hypothesis
Ho: There is no significant effect between government policies/programme toward growth and development of MSMEs in Nigeria
H1: There is significant effect between government policies/programmes toward growth and development of
MSMEs in Nigerian.
1.7 SCOPE OF STUDY
The general scope of the study in line with the topic, the researcher will concentrate on the evaluation of the “Government policies and programmes on the financing micro, small and medium enterprise investment on Nigeria the researcher will evaluate the impact of the policies and programmes on financing as the bedrock of promoting MSME
in Nigeria.
This study will lay special emphasis the policies and programmes that encourage MSME investment in the Nigeria.