THE CONTRIBUTION OF THE INFORMAL FINANCIAL INSTITUTIONS TO THE GROWTH OF SMALL SCALE ENTERPRISES IN NIGERIA


THE CONTRIBUTION OF THE INFORMAL FINANCIAL INSTITUTIONS TO THE GROWTH OF SMALL SCALE ENTERPRISES IN NIGERIA. A CASE STUDY OF COOPERATIVE SOCIETY IN TAKUM LOCAL GOVERNMENT AREA, TARABA STATE   

TABLE OF CONTENT

Title Page………………..i

Certification………….…ii

Dedication………………iii

Acknowledgement……….iv

Table of content……...…v

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

1.2    STATEMENT OF THE PROBLEM

1.3    OBJECTIVES OF THE STUDY

1.4    RESEARCH QUESTIONS

1.5    HYPOTHESIS

1.6    SIGNIFICANCE OF THE STUDY

1.7    SCOPE/LIMITATIONS OF THE STUDY

LIMITATION OF STUDY

REFERENCES

CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION

2.2 THEORETICAL FRAMEWORK

2.2.1 The Supply - leading Finance Theory

2.2.2 Theory of a Moneylender

2.3 Conceptualization of informal financial institutions

REFERENCES

2.4 Empirical Review

CHAPTER THREE

RESEARCH METHODOLOGY

3.1    Research Design

3.2     The Study Area

3.3    Population of the Study

3.4    Sample Size and Sampling Techniques

3.5 Sources of Data Collection

3.6 Instrument for Data Collection

3.7    Validity of Research Instrument

3.8    Reliability of the Instrument

3.9    Administration of the Instrument

3.10    Method of Data Analysis

 3.11    Decision Rule

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

BIO DATA OF RESPONDENTS

RESEARCH HYPOTHESIS

CONCLUSION BASED ON DECISION RULE

CHAPTER FIVE

5.0 SUMMARY CONCLUSION AND RECOMMEDATION

SUMMARY OF FINDINGS

CONCLUSION

RECOMMENDATION

QUESTIONNAIRE ADMINISTRATION

APPENDIX 1

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

The economies of third world countries such as Nigeria operate with dual financial institutions. On one hand are group whichfunction through direct governmental control known as Formal Financial Institutions such as Commercial Banks, Insurance Companiesand Mortgage Banks. And on the other hand are those financial institutions which are not directly controlled by government, called Informal Financial Institutions suchas money lenders, cooperative societies, thrift and loan societies, local bankers, cooperativesetc. It should however be noted that statutory dominance of formal financial sector since independence is hinged on the thinking that the sectorwould stimulate the growth of the economy and ensure the upliftment of the socio-economic lives of the people.

It has been contended that the Formal financial sector will promote savings and investment, improve opportunities for credit, and engender reduce poverty.But it has been observed that Formal financial institutions have seriously come short of the expectationsas they have made things harder for Nigerians through stringentconditionalities for credit, poor customer services and high interest rates (Frank, 1998). Even the micro finance institutions that was created for the purpose of developing the small and medium scale enterprises has not been able to realize any of the objectives for which it was created, thereby leaving the small and medium scale enterprises to be sourcing for their respective means.

The introduction of the informal financialinstitutions by individuals and groups is to cushion the effects of the Formal financial institutions on the socio-economic wellbeing of the people. This practically done by borrowing loans to small and medium scale enterprises and individual for the purpose of expanding their respective businesses. It has been acknowledged all over the world that small and medium scale enterprises are the powerful tool any country can use to stimulate fast and sustainable socio-economic growth.

The informal financial institutions are creation of the indigenous peoplewith aim of making credit/loan facilities more accessible to the people and SMEs so as helpsolve their socio-economic and financial problems(Gulong, 2012). Although not directly under thecontrol government and its authorities, Informal Financial Institutions have pierced through government institutions and organizations, and variety of formal and informal organizations. In almost all organizations, there seems to be existence of Informal Financial institutions established for specific or general purposes which allow people to contribute funds periodically which are given to members as loans or credit. A typical example is the cooperative societies formed by various staffs of government establishments and institutions.

Small scale enterprises prefer to operate with these institutions as their conditions for credit are soft, coupled with faster administration of loans with low interest rate compared to Formal Financial Institutions.Takum Local government areaof Taraba State is semi-urban area which is composed of varying population in terms of occupations as it is composed of government workers, farmers, traders and business men/women, private sector workers and transporters. However, the area does have formal banking system, but most people depend on informal financial institutions existing in the areafor their financial transactions such as savings and loans.This study is thereforeaimed at determining the contribution of informal financial institutions on the growth of small scale enterprises in Takum Local government area of Taraba State.

1.2    STATEMENT OF THE PROBLEM

The contribution of informal financial institutions hasbeen explained by variously by researchers and thinkers. According to Aryeetey (1995) Informal Financial Institutions couldbeconceptualizedas those institutions that embrace all financial transactions that takes placebeyond the functional scope of various countries and other financial sector regulation.These institutions are not controlled directly through major monetary and financial policy instruments but are created by individuals and groups with no legal status. Studies on the impact of informal financial institutions on business development have been conducted by researchers and they found positive effects of informal financial institutions such as micro-credit programmes on the growth of business and the welfare of the people. The study showed that the programme reduced poverty through micro-finance and thrift societies. It also increased women empowerment, improved savings and purchase of agricultural inputs and ensured easy access to loans with considerably lower interest rates.

1.3    OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1.    To examine the contribution of the informal financial institutions to the growth of small scale enterprises in Nigeria.

2.    To examine the role of informal financial institution in providing more credit facilities to small scale enterprises in Nigeria.

3.    To examine the role of informal financial institution in boosting economic growth in Nigeria.

1.4    RESEARCH QUESTIONS

1.    What are the contributions of the informal financial institutions to the growth of small scale enterprises in Nigeria?

2.    What is the role of informal financial institution in providing more credit facilities to small scale enterprises in Nigeria?

3.    What is the role of informal financial institution in boosting economic growth in Nigeria?

1.5    HYPOTHESIS

HO: There is no significant relationship between informal financial institutions and the growth of small scale enterprises.

HA: There is significant relationship between informal financial institutions and the growth of small scale enterprises.

1.6    SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1.    The results of this study will educate the general public especially managers of small scale businesses on the relationship between informal financial institutions and the growth of small scale enterprises.

2.    This research will be a contribution to the body of literature in the area of the effect of personality trait on student’s academic performance, thereby constituting the empirical literature for future research in the subject area.

1.7    SCOPE/LIMITATIONS OF THE STUDY

This study will cover the relationship between informal financial institutions and the growth of small scale enterprises.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work

REFERENCES

Aryeetey, E. (1997). The Characteristics of Informal Markets in Sub-Saharan Africa: Journal of African Economics, 4 (1)47-56

Gulong, P.N.(2012) The Role of Informal Financial Institutions on Socio-economic Development of Mangu Local Governemnt Area, Plataeu, Nigeria: Unpublished B.Sc project, Department of Sociology, University of Mkar, Benue State, Nigeria

Frank, A.G. (1998) Crisis in the Third World Economy, New-York: Holmes and Meier

.

THE CONTRIBUTION OF THE INFORMAL FINANCIAL INSTITUTIONS TO THE GROWTH OF SMALL SCALE ENTERPRISES IN NIGERIA



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET

Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.