CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Survival growth and development are the fundamental
acid test to the positive change in the change in the economy
of which Nigeria is not an exception. In addition country
required industry to facilitate the mobilization of saving so as
to make the available to industries, or organization that wish
to invest or set up industries. The advantages of this cannot
be over emphasized on creation of employment opportunities
used of local raw material development of urban rural areas
promotion of locally produced goods. Saving and earning of
foreign exchange among other. This credit provided by the
banking industry involves different degrees of risk and rate of
returns.
According to (Danjuma, 1993) banking industries is an
arm of the financial institution that can’t be defined as an
agency which deals with receiving deposit on current, saving
account and other similar accounts paying or collecting of
cheques draw by or pay in customer, provision of finances
through the insurance of loan and credit facilities to its
customers based on specified guidelines, banking industry
plays an important role in the development process of the
economy of any Nation by assisting the small scale industries
to survey through here three, (3) basis:
 i. The banking industry serves as intermediaries between
the servers and the borrowers.
ii. The banking industry creates avenue for commercial
lending and provision of credits and payment facilities.
iii. The banking industry especially commercial banks and
community banks perform valuation function of
transferring balance among various accounts hen are
directed to do so by means of cheques issued the
depositors.
Therefore the overall economies development of a nation
has been found to have its root with the development of her
bank of industries. Thus this study on the contribution of the
banking at industries to the development of the small scale
industry in Adamawa State becomes imperative.

1.2 STATEMENT OF THE PROBLEMS

Every country earlier said need medium of exchange for
the growth.
Development and efficient operation of its economy the
bank industries especially the commercial banks and
development of nation. Thus the problem that this research
works will find answer to include the following:
The small scale industries generally characterized below
level of output, few work (mostly unskilled and semi skilled)
simple technology. Loans diversion low salaries arid wages
among others.
 The small scale industries lack awareness on the services
render by the commercial bank.

1.4 OBJECTIVES OF THE STUDY

The main objective of this research work is examine the
contribution of banking industries on the development of
small medium scale business in Numan local government area,
Adamawa State

The specific objective are:

i. To determine the contribution of selected commercial
bank to small medium scale enterprise.
ii. To identify the problem faced by banking of industries in
financing the small medium scale enterprise.
iii. To determine the aspect of the small medium scale
industries to the economy development of Numan local
government, Adamawa State.

1.5 RESEARCH QUESTION

1. What are the contributions of bank of industries in
development of small medium scale enterprise?
2. What are the problems of bank of industry in
development small medium scale enterprise?
3. How to determine level of small medium scale enterprise
in developing economies?
1.3 SIGNIFICANCE OF THE STUDY
This research work should be of important to both
employees and customers of bank of industry in Adamawa
State. To the employees (managers) the recommendation of the
research work would serve as a guard toward winning it goals
and objective it would also draw the modalities toward winning
it rivals in the competitive environment to the employees.
The research work is of paramount important because it
would outline the important at bank of industry, it can be also
be of important to the features researcher in the field of bank
industries and also in areas related to the management field.
The research work will also serve as literature and
lecture material in the field of specialization.

1.6 SCOPE OF THE STUDY

This research work will cover small medium scale enterprise in
Numan local government, Adamawa State from 2011-2016
and probably after.

1.7 LIMITATION OF THE STUDY

This research work is limited on Numan local government
only, and it has not investigating the other bank of industry
across the state.
In writing this research work, there are some limitations
encountered: lack of accessing information form appropriate
quarter and poor respond.
 CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION
This chapter consist the concept of small medium scale
enterprise, capital needs, sources of finance, financial
management, development of small medium scale enterprise
and also problems and importance of selecting small industry
as well as validity.

2.2 CONCEPT OF SMALL MEDIUM SCALE ENTERPRISE

With the issue of small medium scale enterprise, a new
industry atmosphere and economic growth has be begun
Ogundipe (1987) posed it that small medium scale
industry have further advantage of offering opportunities for a
considerable number of persons in a geographical location
that is varied and diverse.
According to Otumba D.A Smith (1992), all the world
small medium scale industry are the most dependable source
of growth and sustainers of the nations economy.
Akinomu (1988), state that small medium scale industry
have vital role to play in achieving a sustainable growth in
Numan, Adamawa State. He maintained that not only are they
capable of generating more employment per unit of capital
input, there also provide the best chance of industrializing our
rural areas.
 According to Nwoga H. L (2007), he state that small
medium scale industry stimulate indigenous industry,
providing employment to a greater number of people, not with
standing in role mobilizing and accelerating saving, which is
geared towards the growth and development of the economy.

2.3 CAPITAL NEEDS FOR SMALL BUSINESS

For any small business to be successful, the following
capital needs must be provided:
i. Working capital
ii. Fixed assets capital
iii. Fixed security investment

Promotion expenses capital funds for personal expenses

working capital. This is the capital require for running a
business operation from day to day. These include cash,
account receivables investors and marketable adequate funds
should be made available to ensure smooth operation of the
business. This is because bills would be settled, supplies
would be need, raw materials would be procured and other
regular expenses would be incurred.
Fixed assets capital: fixed assets consist of tangible long
lasting property of a business such as machines and
machinery, equipment, furniture fixtures and sittings. Others
include intangible assets such as goodwill and copyright.
While tangible assets are needed to carry out business
operations, intangible assets are needed to enhance protection
and success in the market place.
Fixed security investment; these includes stocks or
shares and contingency funds. Redeemable investment that
can be converted into cash through the secondary market
(stocks exchange). Dividends from shares can boost capital
expansion for small business and cushion the effect of losses
of unexpected expenses. Promotion expenses capital;
promotion is a marketing function involved in communicating
consumers using tools such as advertising, sales promotion,
personal selling, publicity and public relations. The
application of these tools is very necessary for achievement
marketing objectives there forest, a small business owner
must make provision for these expenses. Funds for personal
expenses, whether a small scale business is operating his
business on full time or part time base there is need to create
a pursue or account for personal expenses. This is to avoid
tampering with the business funds which can obstruct the
smooth operation of the business

2.4 SOURCESS OF FINANCE FOR SMALL BUSINESS

This may include the following;
i. Friends and relative:
ii. Funds from local money lenders
iii. Loan from Bank
 i. Friends and Relatives: Friends and relatives is
another dependable source of finance for the small
scale business such finance may be interest or may
required payment of some minimum agreed interest.
ii. Fund from Local Money Lenders: Fund for stating a
small medium scale business can be source from local
money lenders, these lenders have certain interest on
their capital which is base on the agreement, which
will be given either monthly or yearly.
iii. Loan from Bank: Capital for starting a business can
be generated from banks which is usually attach with
a particular interest monthly, seasonal or yearly.

2.5 FINANCIAL MANAGEMENT OF SMALL BUSINESS

These problems include:-

I. Insufficient Capital: all business need adequate
capital for smooth and efficient operation and to
enhance achievement of desired goals and objectives
small business generally are started with little capital.
This in most cases, can hinder the achievement of
some objectives such as growth, market development
and penetration, employed and customers satisfaction.

II. Difficulty in Raising Finance: small business

encounters numerous difficulties in raising finance
such difficulties include inability to provide collateral
security for loans and inability to raise funds through
 public offer. Most small business do not have any
asset that can be deposited for loan as a collaterals,
are reluctant to lend money to them because of their
nature and management. There is no separation
between owners finds and the business finds and this
may make the recovery of such loan difficult especially
at the demise of the owners. On the hand, pool
management of small business can render such
doubtful or become bad.

III. Lack of Poor Record keeping: Records keeping

especially financial records are very vital for efficient
management of finances. Absences or record or record-
keeping in a business means courting failure as debts
especially receivable may become irrecoverable. Poor
record keeping may even cause more damage than
absence of records e.g. overstating of profit or under
estimating debts kill a business

IV. Extravagance and Misappropriation of Funds:

Extravagance mean careless or wasteful spending
most small business owners spend on social activities
that may not yield any benefit in other cases, funds
that are stated for investment purposes and cash of
business operation are diverted to other non-business
related or personal expenses. This reduces small
business savings and profit retention ability.
V. Wrong Valuation of Goods and Serving: valuation of
goods, especially stock must be properly done to
ensure accuracy. This is equally the some in service
oriented business. The two extremes of over valuation
and under valuation must be avoided when goods or
service are undervalued, this may not result in good
margins or it may even bring losses, even valuation of
stock for customers can discourage them and if such
error is committed in records, it may not show the true
position of the business.

VI. Inefficient Investment Culture: investment decision

is crucial business decision investigations have show
that most business owners select investment
alternative based on profit attractiveness not minding
the risks or other condition surrounding such
investment choice. This clearly explains the reason
most small business owners fall victims of swindlers.

2.6 DEVELOPMENT OF SMALL MEDIUM SCALE

ENTERPRISE

Small medium scale enterprise development agency has

been of greet support to both development and developing
nation of the world by playing a greater attention to small
medium enterprise and it play a very significant role in the
socio economic of the foregoing, that the small and medium
enterprise development agency of Nigeria was create as
vanguard and focal point for the promotion and development
of small scale enterprise sub sector to the Nigeria economy.
Some of the contributions made are manmade which is
controllable arid those beyond the control of the entrepreneurs.
Among the barriers to small medium scale enterprise
developments are:

i. Lack of adequate development technology institutional

structures to small and medium scale industries.
ii. Poor industrialization policies of the government.
iii. Lack of availability or inadequate working capital
iv. Lack of access of appropriate technology
v. Inadequate access to finance
vi. Lack of access to information on appropriate
technology
vii. Lack of readymade market
viii. Lack of strategic business alliance.
ix. Absence of basic infrastructures.
x. Inadequate and uncoordinated support services.

2.7 PROBLEMS OF SELECTION SMALL INDUSTRIES

The major problems of some selected small scale industries
are:

I. Lack of experience: It is always expected that

anybody entering a business should have a prior
knowledge in the particular line of business he wants
 to ventures because lack of adequate experience ill
drastically affect the business.

II. Lack of proper record: When organization/tent to

keep accurate records of their transaction, they cannot
properly to keep account of their revenue profit and
the less incurred.

III. Wrong product: Lack of adequate marketing research

and analysis of the market brief exploiting
opportunities lead to selection of the wrong product.

IV. Lack of adequate capital: starting business with

inadequate capital affects business activities greatly
since they cannot perform their primary obligation on
planned for.

V. Fraud: fraud is frequent and rampant among

employer their involve some activity elouts bankruptcy
and liquidation of business organization.

2.8 IMPORTANCE OF SELECTED SMALL INDUSTRIES

I. Training and development: the small scale industries

trained and develop in improving market research
strategies, product, design so as to improve product
image, improve financial capabilities: scale selection
industries enhance financial capability by improving
capital formation strategies in order to make finances
 that would sustain the activities of the some selection
small industries.

II. Choose the right product: environment analysis and

scanning best frame works that will quid organization
about the multiple records that are in small medium
scale enterprise.
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION
This chapter consists the research design, population of
the study, sampling techniques and sample size, source and
method of data collection, instruments for data collection and
method of data analysis.

3.2 RESEARCH DESIGN

The research design adopted for the study is a case study
method research design is the plan on how to carry out the
work or plan on how study will be conduction it is concerned
with the types of information on data collection techniques.

3.3 POPULATION OF THE STUDY

Information or data required for this investigation rest
solely on the management and staff of Adamawa State, bank
of industry as well beneficiaries to ascertain the extent of their
satisfaction on the bank. In this research work (1000)
questionnaire where distributed and out of this (800) where
able to returned and filled successfully.

3.4 SAMPLE SIZE

The sample is a subject of a population selected for
measurement observation, or questioning to provide statistical
information about the population for the purpose of this study,
a sample of (300) have been taken using simple random
sampling from the total population to justify the research work.

3.5 SOURCES OF DATA COLLECTION

The sources and method of data collection consists of
primary and secondary sources of data, personaling with the
help of research questionnaires

3.6 INSTRUMENT OF DATA COLLECTION

Research instrument or tools used in the course of
writing the project is observation and questionnaires.

3.7 METHOD OF DATA ANALYSIS

This data analysis of this work research will use sample
percentage to answer the research questions, Tables will be
provided on grouping the terms data and the number of
respondents that were responsible to each question
similar respond to each will be group together (-) negative and
(+) positive before the conclusion.
The formula the sample percentage use to answer the
research question

� 100
�
X 1

Where:
X = Number of respondent
N = Total number of respondent
% = 100%
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
This chapter deals with the presentation and analysis of data
collection in the course of this project. The presentation and
analysis has been base on the respond from the field as
indicated on questionnaire this analysis and protestation
would enable easy perception of contribution of banking
industry to the development of small scale Business. Therefore
the over economic development of any nation has been found
to have it root with the development of her banking industry.
The various question that were drown from the purpose of this
study are interpreted as follow.
4.1 DATA ANALYSIS
QUESTION 1: What are the problem facing Unity Bank plc?
Table 1
Source: Field Survey 2016
From the above table, 10 respondent representing 40% of the
total number of respondent are of opinion that the problem
facing Unity Bank is
19

Opinion Frequency Percentage %

Finance 10 40
Management 9 36
Location 6 26
Total 25 100
shortage of fund while 9 and 6 respondent disagree to that.
Therefore based on the data generate the problems facing
unity bank is shortage of found. QUESTION 2: Do unity bank
have awareness of the bank credit facilities? Table 2
Source: Field Survey 2016
Table 2 shows that, 10 respondent representing 40% of the
total number of respondent are of the opinion awareness of the
bank credit facilities while 15 respondent represented 60%
disagree to that, there fore base on the data tabulated unity
bank are awareness of the bank credit.
QUESTION 3: Do the loan given by banks enough to expand or
expand or set up a variable business?
Table 3
Source: Field Survey 2016
20

Opinion Frequency Percentage %

Yes 10 40
No 15 60
Total 25 100

Opinion Frequency Percentage %

Yes 20 80
No 5 20
Total 25 100

From the above table, 20 respondent representing 80% of the

total number respondent are of the opinion that, the loan
given by banks enough to expand or set up a variable business.
While 5 respondent represent 60% disagree to that, therefore
base on the data tabulated the loan given by banks are
enough to exponent or set up a variable business.
QUESTION 4: Does the commercial banks demand collateral
securities for loans before issuing loans?
Table 4
Source: Field Survey 2016
From the above table, 17 respondent representing 68% of the
total number of respondent are of opinion that the commercial
banks demand to collateral securities for loans before issuing
loans. While 8 respondent representing 35% of the total
number of respondent disagree to that, there fore base on the
data tabulated the commercial for loans before issuing loan.
21

Opinion Frequency Percentage %

Yes 17 68
No 8 32
Total 25 100
Source. Field Survey 2016
The table above shows that, 19 respondent representing 76%
of the total number of respondent are of opinion that there is a
afford abilities in the collaterals demanded. While 6
respondent representing 24% of the total number of
respondent disagree to that, there fore base on the data
equated there is the afford abilities in the collaterals
demanded.
QUESTION 6: Do banking industries approved prompt
payment of loan to unity bank pie?
Source: Field Survey 2016
From the above table, 21 respondent representing 84% of the
total number of respondent are of opinion that banking
industries proved prompt
payment at loan to unity bank. While 4 respondent
representing 16% of the total
22
QUESTION 5: Is there any affordability in the collaterals
demanded? Table 5

Opinion Frequency Percentage %

Yes 19 76
No 6 24
Total 25 100

Opinion Frequency Percentage %

Yes 21 84%
No 4 16%
Total 25 100%

number of respondent, respond negatively. This implied that

banking industries proved prompt payment of loan to unity
bank.
QUESTION 7: Does the loans given by the commercial bank
has duration?
Source: Field Survey 2016
Table 7 shows that, 13 respondent representing 52% of the
total number of respondent are of view that, the loans given by
the commercial bank do not has duration while 12 respondent,
representing 48% of the total number of respondent, this
implied that the loans given by the commercial bank do not
has duration.
QUESTION 8: Is there any prompt payment of loan by unity
bank plc? Table 8:
Source: Field Survey 2016
23

Opinion Frequency Percentage %

Yes 12 48
No 13 52
Total 25 100
Opinion Frequency Percentage %
Yes 8 32
No 17 68
Total 25 100

From the above table 17 respondent representing 68% of the

total number of respondent are of view that, the prompt
payment by the unity bank do not help at all. While 8
respondent.
4.2 RESEARCH FINDINGS
1. Table one analyze and presenting the data collection by the
research work. The research try to test whether they are line
or not this is done by the used of simple percentage method.
The first question, which entailed the problems facing the
unity bank in Numan branch the research refers to table of
40% positive responses these agree that the major problems
facing the smooth operation of the unity bank is shortages of
funds. While 10% said the location policies.
2. The Second question:- talk about the awareness of credit
facilities to unity bank the research refers to table two.
Responses which has a total positive responses of 60% only
40% responses negatively which shows that unity bank are
not aware of credit facilities.
3. The third question:- State that unity bank adequate loan to
expand or set up variable business the research refers to table
three which has the total number of 80% positive responses
which only 20% respondent negatively. This show that the
amount given to them as loan is adequate for them to set up
their business.
24
4. The fourth question:- State that does commercial bank
demand to collateral securities for loans before issuing loans.
The research refers to table 4 which has 68% positively, this
shows that the commercial bank demand in collateral
securities before issuing loan.
5. The fifth question:- this talk about affordability in the
collateral demanded which has 76% positives responses that
collateral demand by the bank was alterable only demand by
banks was not alterable.
6. The Sixth question:- entail that do banking industries prove
prompt payment of loan to unity bank in Numan branch,
which the researcher refers to table six which has a vital of
84% positive responses that banking industries prove prompt
payment of loan to unity bank in Numan branch, while only
16% responses negatively.
7. The seventh question:- This table talk about the duration of
loan that research refers to table seven which has a total of
52% positive responses that the loan does not exceed one year.
While only 48% responses negatively that the loan given by
commercial does not exceed one year.
8. The eight question:- entails prompt payment of loan by
unity bank the research refer to table eight which has 68%
positively response. While 32% response negatively this show
that, commercial bank are not given prompt payment of loan
by the unity bank.
25
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 SUMMARY
This research project attempt to determine the level and
extend to what the banking industry has contribute to the
development of the small scale business in Adamawa State.
This section presents the summary of findings. As regard the
responses of the 40% in the respondents said the major
problem facing the unity bank in Adamawa State is the
shortage of founds while 36% of the response said that it is
management problem and other problem.
Also 40% of the respondents were of the loan given and by the
bank in which only 60% of respondents were able to secure
bank loan. The research result involved that the lending
procedure in securing the loans as too cumbersome and as
such some of the respondents give up seeking for banks loan
for example, the respondents demand that the banks do not
ask for collateral which most of the small scale business could
not afford. According to the research result not 80% of the
respondents small scale business seen to be effective in term
of their landing small scale business of the respondents
stressed the inattentiveness of the bank which 20% were
undecided. The research result revealed the decreased in the
number and value of given to the unity bank Numan branch,
bank were as result of the following reason.
26
The greater degree or comparative poor performance of most
small scale business borrowers lending to strong loan default
the scattered location pattern of the unity bank couple with
the small size this leads to high cost of liabilities of the loan
given the government action and the unpredictability of the
Nigerian economic resulting in high rate of failure among unity
bank.
5.2 CONCLUSION
Banking industries is a fountain through which industries
development can eminent. As such this study has attempted
to find out the extend to which the banking industries has
contributed to development of small scale business. The
research work is made of primary and secondary data.
Question was distributed to the salvation. The research result
revealed that out of 25% questions distributed to the small
scale business, the over while lining majority 40% signified
that inadequate finance is the major or implement hampering
the smooth operation of the sector.
However 21 respondents (84%) agree that banking industries
has through the years spurred the group of the small scale
business have problems facing the banking industries in the
distribution of loan to the unity bank were high lighted loan
repayment default insufficient capital.
5.3 RECOMMENDATIONS
Given the important of unity bank to the survival growth and
development of any nation, the following suggestions are being
preferred to
27
improve to improve the service render by the banking industry
to the unity bank in Numan branch. These recommendation
effectively implemented will go a long way to promote
industrial development in Numan branch.
I. The commercial banks should make sure that their loans
are not restricted to the restricted to the large scale industries
along
2. These is need commercial industries or unity bank to
broaden their relationship with its and set up machinery to
ensure that loans secures by unity bank are adequate utilized.
For the propose intention in order to avoid loan diversion.
3. National association of the small scale industries (N.A.S.SI)
should embarked on intensive orientation in order enlighten
them of the credit facilities commercials bank.
4. The issue of industries development should be at the local
state or national level. All hands must be on disk to ensure
that small scale businesses are small scale business to
perform their traditional and development of Adamawa State
and of nation at large.
5. The government of Adamawa State should make sure those
loans are giving to these that want to start a small scale
business so as to help the community and reduce the high
level of unemployment.
6. The small scale business and bank should join hands in
development of the Adamawa State and nation.
28
REFERENCE
Barbawa. K (1997) Small Scale Business Administration
Lecture Note
Department of Business Management University of Maiduguri-
Nigeria
Adewwni W and Ojo A. (1983) Banking and Financial in
Nigeria Graham Burn, Nigeria,
Dan Juma N.N (1993) The Liability of Small Scale Business.
Davies 0. and Harries K. (1990) Small Scale Business
Independent Retailer “Macmillan Distribution L.T.D England.
Entrepreneur Development (1992) Combined Group Work
Handout, Obafemi, Awolowo University lIle-ife.
Hample G.H and Yawliz. J. (1977) Financial Management of
Financial Institution Prentice Hall M.C New Jersey.
Ogabmudia B (1996) Business Research Method University of
Maiduguri
• Lecture Handout.
Perry B (1996) The Element of Banking Industries Suffolk
Great Britain.
Perry E.E (1983) A dictionary of banking Richard Day (The
Chance Press) Ltd.
Bungay.
Salvage D.T (1983) Money and Banking Wickey Hamilton New
York.
Thron R.S (1978) Introduction to Money and Banking Hamper
Row New York.
Wood Dr. O.G (1978) Commercial Banking Practices and
Policy Divan no Strand and Company New York.
29
APPENDIX I
Adamawa State Polytechnic
College of Administrative and
Business Study
P.MB. 24, Numan
Department of Business
Administration
Dear Respondent,
QUESTIONNAIRE
I am a student of the above name institution conducting a
research on the
topic “Contributions of Banking Industry for the Development
of Small Scale
Business” A case study of Unity Bank Numan branch
In partial fulfillment of the requirement of National Diploma in
Business
Administration
I hereby solicit for your assistance by providing adequate
information or
answers to the questions below. All information given should
be used only for
academic purpose and will be handled confidentially.
Thanks.
Yours faithfully
Justina Adamu
ASP/CABS/2014/199
i
APPENDIX II
SECTION A:
PERSONAL DATA
Name:
Sex: Male [1 Female [ J
Occupation: —
1. What are the problem facing in unity bank? Finance [ J
Management [ ] others [ I
2. Do unity bank have awareness of the bank credit facilities?
Yes [1 No [I
3. Is the loan given by banks enough to expend or sep up a
variable business? Yes [1 No [ ]
4. Does the commercial banks demand to collateral securities
for loans before issuing loans? Yes [ ] No [I
5. Is there any affordability in the collateral demanded?
Yes[]No[ I
6. Do banking industries proved prompt payment of loan to
unity bank? Yes [ jNo[]
7. Does the loan given by the commercial payment has
duration?
Yes [I No [I
8. Is there any prompt payment of loan by unity bank? Yes []
No [I
31