Entrepreneurship is as old as Nigeria and had contributed to the growth of the economy. Presently in Nigeria, SMEs assist in promoting the growth of the country’s economy, hence Commercial Banks and all the levels of government at different times have policies which promote the growth and sustenance of SMEs.

This project examined  the role of commercial banks to the development of scale industries in Nigeria. It also identifies the marketing problems of SMEs and entrepreneurships in Nigeria, direct financial assistance to SMEs and the establishment of finance institutions to support SMEs. It identifies the roles of SMEs in Nigeria’s development and growth. It discusses the entrepreneurial thoughts, problems and advance practical marketing solution.

Survey design was employed with the use of a well structured questionnaire. Respondents were selected based on simple random sampling technique. Hundred (100)  staff of commercial banks were sampled.

Two hypotheses were formulated and tested with the use of Chi-Squre analysis. The analysis resulted to rejecting both hypotheses and hence accepting the two alternate hypotheses.

Based on decisions of the tested hypotheses conclusions were reachedthatCommercial Banks contributes towards performance of Small scale business enterprises and The availability of credit facilities contributes to the survival of small business enterprises.Recommendations were proffered  to SMEs, Commercial Banks and the Nigerian Government.



1.1     Background of the Study

1.2     Objectives of the Study 

1.3     Statement of the Problems

1.4     Research Question

1.5     Statement of Hypothesis

1.6     significant of the Study 

1.7     Research 

1.8     Scopes and Limitation

1.9     Organization of Work

1.10   Definition of Terms



2.1     Introduction

2.2     Sources of Fund to the Small Scale Enterprises

2.3     Operation of Government Programmes for Small Scale

          Enterprises (SSE)          

2.4     The Role of Commercial Banks

2.5     Problem of Small Scale Enterprises  

2.5.1problems Associated with Commercial Bank

2.5.2 Problems Associated with the Government 

2.5.3 Problems Associated With Small Scale Industries




3.0     Introduction        

3.1     Research Design           

3.2     Sources of Data Collection      

3.3     Study Population          

3.4     Sample Size and Sampling Technique

3.5        Restatement of Research Questions

3.6        Restatement of Research Hypotheses

3.7     Method of Data Analysis         

3.8     Validity and Reliability of the Research


3.9     Limitations of the Research Method 



4.0     Introduction                            

4.1        Analysis Of Personal Characteristics of the Respondent

4.2        Analysis Of Response of Respondents to The Problem Areas.

4.3     Testing of Hypotheses                       

4.3.1 Test of Hypothesis One  

4.3.2  Test of Hypothesis Two          



5.1     Summary                                

5.2     Conclusions                            

5.3     Recommendations         







The expected impact and potential contribution of Small-Scale enterprises on broad and diversified production base as well as their accelerated effect in achieving macro objectives pertaining to full employment, income distribution and the development of local technology makes the existence of small-scale enterprises most inevitable. They are particularly most conducive for diffusion of management skills and stimulation of indigenous entrepreneurship

over time.

However, we need to examine what really are Small-Scale enterprises and how does a firm or Company qualifies to be one.

Definition of Small-Scale enterprises is not constant, it depend on a large extent on a country's level of development. What was a large-scale in 1950 may now be regarded as small-scale today. Probably due to differences in policies focus different institutions in Nigeria apply various definitions, which are considered below.

Central Bank of Nigeria in its credit guidelines to banks in case of Commercial banks, small-scale enterprises are those with annual turnover not exceeding N500.000.

In the Federal Ministry of Industries' guidelines to Nigerian Bank of Commerce and Industry (NBCI), small-scale enterprises are defined as those with total cost not more than N500.000. (Excluding cost of land but including working capital. The NBCI in its regular operation has adopted the definition of small-scale enterprisesas those with cost of capital not in excess of N750.000 (excluding cost of land but including working capital).

The Centre for Industrial Research and Development (CIRDO at ObafemiAwolowo University, lie Ife, defines as small-scale those enterprises with total assets in Capital equipment, plan* and working capital not exceeding N250.000 and employment not more than 50 full time workers. project topics   project topics and materials 

The Nigeria Industrial Development Bank (NIDB) defines as small-scale, enterprises with project cost (Investment and Working capital) not exceeding N750.000.

There is also the problem of whether the "Small-Scale Industry" can be used for manufacturing and trade. For the purpose of this work, both will be used inter­changeably. Small-scale enterprises therefore comprise of: family business, sole trader. Artisans, coltage industries, small shops, mechanic workshops, etc.

These types of industries can be classified into three categories as follows:

1.     Organised non-manufacturing firms, such as those involved in transportation, repair shops, construction and other service industries.

2.     Non-organised firms such as artisans.

3.     Small manufacturing firms.


The need for small-scale enterprises in acting as catalyst to the development of the Nigerian economy cannot be overemphasized. They assist in the development of local technology, they provide an effective means of stimulating indigenous entrepreneurship and lastly, small-scale enterprises provide greater employment creation per unit of the capital invested.

Despite the immense contribution of small-scale enterprises, they have most of the time failed:, due to inadequate working capital, which restricts the productive capacity of small-scale industries thereby leading to their demise. They suffer frominsufficient funds in funding their business operations especially the purchase of raw materials.

These small-scale enterprises are also restricted the access to institutional credits. They are unable to meet the lending requirement of the commercial banks due to improper record keeping and inadequate capital base. They are therefore made incapacitated and most of the time thrown out of business due to financial stagnation.

it is on this note that this research work tends to examine the role of commercial banks to the development of small scale industries in Nigeria and proffer suggestive solutions to this problems


The purpose of this research study is to identify the problems hindering the development of small-scale industries, especially those associated with commercial banks. It will also identify some suggestion and recommendation on the ways these problems can be overcome.

It will also identify ways which the role of commercial banks in the development of small-scale enterprises can be improved.


The research in the process of analysis of data, suggested the following questions.

1. Do commercial banks contribute towards organizational performance of Small Scale business?

2. What are the roles of small business enterprise in economic development?

3. To what extent is the availability of credit facilities contributing to the survival of small business enterprises?

4. What is the impact of commercial banks on the performance of small business enterprises?

5. To what extent, have commercial bank been funding the small­scale enterprises?

6. To what extent, the sources of      funds that are commonly used by small scale industries, adequate?

7. Can funds from    commercial banks alone play significant role in the development of small-scale enterprises?

8. how did government monetary policies influence the services of commercial banks towards small-scale industries?



Ho:   Commercial Banks do not contribute towards performance of Small scale business enterprises

H1:   Commercial Banks contributes towards performance of Small scale business enterprises.


Ho:   The availability of credit facilities do not contribute to the survival of small business enterprises.

H1:   The availability of credit facilities contributes to the survival of small business enterprises.


The importance of small-scale enterprises in the promotion of economic development has -always been at the forefront of development strategies. This, inthe second development plan (1969 - 1974) 6dth the Federal and State government move to actively support and promote the development of small-scale industries in this National Development Plan (1975 - 1980), government explicitly stated the main objective of the programme for the development of small­scale industries as the creation of employment opportunities, mobilization of local resources, reduction in rural urban drift and more even distribution of industrial enterprises in different parts of the country. In the budget speech by General Sani Abacha, the Head of State emphasized that the development of small-scale industries would be encouraged and promoted.

At the end of this research work, anybody that is opportuned to come across it should be able to know:

1.     Importance of small-scale enterprises to the development of the Nigerian economy.

2.     Identify problems hindering the development of small-scale enterprises especially those associated with commercial banks.

3.     Ways in which these problems can be solved.

4.     Identify ways in which role of 'commercial banks is the development of small scale enterprises can be improved.

The fact that small-scale enterprises have the potentials of creating employment and reducing unemployment, increasing the production of exportable goods, make it more relevant to Nigeria that is having major problems in the area of unemployment, export and balance of payment.


For the purpose of achieving the objectives of this study, data would be collected from both primary and secondary sources.

The primary source will entail gathering of information from industrialists usingquestionnaires 'and direct. interview where necessary. While the secondary source will entail extensive use of Central Hank of Nigeria (CBN) annual reports, journals and publications and textbooks, relating to the small scale industrial sub-sector of the economy

Date collected from all sources will be analyzed using tables and percentages for these will allow for easy analysis of data.


The study will focus mainly on the role of commercial banks in the development of small-scale enterprises in Nigeria. Since the banking sector is one of the major institutions in the process of economic growth, it is important to study the role of a major unit of the banking sector, i.e.; commercial banks in the promotion of small­scale enterprises and the focus would be in Nigeria.


The small scale industries sampled does not represent a comprehensive and true view of all the small-scale industries in Nigeria. This is as a result of our inability to reach all the small-scale, industries concerned. As a result, only a sizeable number of small-scale industries in Lagos state were been used and generalization made using these industries.

There is also time constrain as this study is limited to a specific short period of time.

The issue of finance cannot be over-looked as we lacked the sufficient financial resources needed for a thorough research.




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