THE ROLE OF BANK OF INDUSTRY TOWARDS THE
DEVELOPMENT OF SMALL SCALE ENTERPRISES
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The study of the role of government agencies towards the
development of small scale enterprises is quite interesting. These enterprise
have a very important impact on the life of everybody in the society. Small
independence business are everywhere and in every line of work, they can also
be seen in every community. This business is as old as man. So virtually
everything is done in life involved the element of business. Small scale
enterprise constitutes an importance in todays business activities or system.
The role of small scale enterprise in our economic history however, has been
one of the distribution and contribution.
Although its relative importance has decline with the
growth of the big business, small scale business is till major contribution to
the countries economy. Business in Nigeria today is made up of both
large and small business. Today small scale enterprise have to enjoy more
prestige than ever before because of its vital contribution to the nations
economy. So vital is small scale business. There are successful small scale
enterprise operating like the manufacturing plants, retails, stores,
wholesales, drugs, computers, construction firms and hundred of other type of
business.
Nigeria
population was estimated to be 140 million in 2007 with about 75% of this made
up of small scale enterprise operators. Lack of full study of government
agencies in the development of these enterprises especially, the financial
institution made it impossible to know
the size, structure and function of these small scale business to the
development of the economy.
Government agencies are charged with the
responsibilities among others to carryout duties and deliver utilities as may
be regulated from time to time on behalf of the government for the purpose of
uplifting the standard of living. Government agencies such as bank of industry
(BOI) is charged with the responsibility like provision of medium and long term
finances by way of equity funding, loan and lease financing, guarantees, investment in corporate
bonds business development services, co-financing, working capital finance
and promotion of small scale
enterprises and industries project, co-sponsoring financial institutions and
small scale enterprises.
This bank of industry was formerly originated from Nigerian
industrial development bank limited was established in 1964 following the
reconstruction of the investment company of Nigeria limited (ICON) NIDB was set
up primarily to accelerate Nigerian industrialization.
The bank was to conceive shortly after Nigerian attains
independence in 1960. The idea was to set up development financial institution
to serve as a dedicated window for channeling fund from within and outside the
country to the young nation states industrial sector. Economic reconstruction fund
(NERFUND) in the last regime of Obasanjo administration is renamed as BOI.
1.2
STATEMENT
OF THE PROBLEM
Most government agencies have undergone number of
re-organization especially bank of industry (BOI) which affect their forces and
activities that leads to effective performance and lack of proper control on
their activities.
The most obvious problems of Bank of Industry (BOI) is
how to produce or provide efficient financial resources technical assistance,
security on loan given out to customer (SSE) evaluating of project that are
financed which may take more time than stated at the beginning.
Also the project time table, which depends on nature and
complexity of the project, it may take one to two years sometimes longer from
when project was identified to when it was commissioned.
On the part of small scale enterprises (SSE) how
effective are they utilizing the services rendered to them by the bank of
industry (BOI). Also are they able to cope with the policies adopted by this
agencies (BOI) in obtaining loan and other services rendered such as interest
rate on capital collateral facilities and the role of government.
1.3
OBJECTIVES
OF THE STUDY
The aims and objectives of the study is to analyse
various role played by (BOI) in developing of small scale enterprises as well
as the activities of government policies such s provision of infrastructural
facilities, provision for local finance, facilitating and funding industries
and funding institutions like the (CIRD), (FIRO) and (SSICS) to what does the policies
of government are achieved towards developing Small scale enterprise.
It is also to analyze the various ways by which bank of
industries (BOI) has contributed effectively to the development of he economy
through the role played in financing and provisions of other necessary features
for development of Small scale enterprise.
1.4
SIGNIFICANCE
OF THE STUDY
The significance of the study is to serve a reference
material to other students who may write on, make research on similar topic and
serve as recommendation to bank of industry (BOI) in discharging its functions
to the customers as well as the mode of rendering services to the customers small
scale enterprise
1.5
RESEARCH
QUESTION
Based on the subject matter, the researcher prefer to
use the following questions for research findings;
1.
What are the problems of
small scale business?
2.
What are the roles of small
scale?
3. Are
banks of industry the sole financier of small scale enterprise
4. Does
government have favourable policies towards development of small scale
enterprise
1.6
SCOPE
OF THE STUDY
This study will cover the area of activities and role
played by the government agency (BOI) in developing small scale enterprises.
1.7
LIMITATION
OF THE STUDY
It is not an easy assignment for a student to conduct a research
work without encountering two or more problems one of such problems faced by
the researcher was lack of adequate information which the researcher could
obtain for necessary research work as some of the organization officials formed
to be very busy and required for some signatory from the department before
giving out information to be used.
1.8
DEFINITION
OF TERMS
Small Scale
Enterprises (SSE): a type of business that is
run and managed by a single person
NIDB:
Nigeria Industrial
Development Bank
BOI:
Bank of Industry
NBCI: Nigeria Bank for Commerce and
Industry
NERFUND: National Economic reconstruction Fund
FIIRD: Federal Institute of Industrial
Research
SSCF: Small Scale credit fund
Interest: Certain amount that are charged on
borrowed money
Capital: Money
Development:
The gradual growth of some thing, so that it
becomes more advanced, stronger
Community: Local country side