CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The Nigerian financial system is vibrant and highly competitive. It consists

of 84 viable commercial banks as well as merchant banks which are

privately owned with a total of over 2,410 branches and 5 development

banks owned by government which (BIO) bank of industry is part. There are

also 200 registered non-bank finance houses with various sizes which is part

of the Structural Adjustment Programme (SAP) introduced in 1986. It was

an expansion and diffusion of the banking and financial system. By 1992,

banking sector had grown to 67 commercial banks and 55 merchant banks,

145 primary mortgage institutions, 228 branches of the people bank, 618

financial companies (48 fully licensed by CBN), 401 community banks and

about 10 other development and specialized banks. Micro finance or small

and medium scale enterprises arose in the 1980s as response to doubts and

research findings about states delivery of subsidize credits to poor farmers in

1970. Government agencies were the predominant methods of providing

productive credit to those with no previous access to credit facilities. People

who have been forced to pay unserious interest rate or were subject to rent

seeking behaviors. Government and international donors assumed that they

1
required cheap credit and saw this as a way of promoting agricultural

production by small scale entrepreneurs. In addition to providing a

subsidized loan, donors set up credit unions inspired by Raiffeien model

developed by government in 1964. The focus of these corporative financial

institution was mostly on savings mobilization in rural areas in an attempt to

train poor entrepreneurs on how to save and invest. Micro-finance has

evolved as an economic development approval intended to benefit low

income earners. The term refers to the provision of financial services to low

income clients including the self-employed. Financial services generally

include savings and credit. However, some micro finance organization also

provide financial intermediation. Many micro-finance institutions provide

social intermediation services such as group formation, development of self-

confidence and training in financial literacy and management capabilities

among members of a groups.

Micro-Finance Activities Usually Involves

i. Small loans, typically for working capital

ii. Informal appraisal of borrowers and investment

iii. Collaterals substitutes, such as group guarantee compulsory savings

iv. Access to repeat loans based on repayment and performance

v. Streamlined loans disbursement and monetary activities

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 vi. Secured savings products

In considering the type of financial assistance that can be obtained from bank and

other financial institutions, I will like to state right from the outset that banks and

the government operate from different pedestal. Most banks are privately owned

by institutions which have the profit maximization as their goals in business. In

contrast, banks owned by government are developmental finances in nature and

therefore have the capacity of giving out loans and good terms on interest or even

no collateral requirement. Therefore, this study is carried out to extensively

enumerate and employ measures to help government to give out loans to Small and

Medium Scale Enterprises (SMEs) at favorable conditions.

1.2 Statement of The Problems

The nature of financing small and medium-scale enterprises by bank of industries

is now becoming low due to lack of enough capital from government. Government

refused to effectively and efficiently provide the bank with enough finances. Some

problems of Nigerian companies according to Shamsudeen (1979) includes;

i. Lack of appropriate organizational structure

ii. No corporate planning

iii. Arbitrates in administrative decisions

1.3 Research Question

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 i. Does the Bank of Industry give out loans, advances and expertise advice

to small and medium scale enterprises?

ii. Does the Bank of Industry know the viability of a project or venture

before giving out loan?

iii. Are local entrepreneurs aware of the need to make proper use of the bank

facilities in order to encourage and boost the morale of entrepreneurs in

Nigeria?

iv. In what ways could government be advised to make more funds available

to Bank of Industry for industrial growth and development?

1.4 Objectives of the Study

The objectives of the study are:

i. To know whether Bank of Industry give out loans, advances and

expertise advise to small and medium scale enterprise.

ii. To investigate whether Bank of Industry know the viability of a project

before giving out loan.

iii. To let the local entrepreneurs, obtain more awareness on the need to

make proper use of the bank facilities in order to encourage and boost the

morale of entrepreneurs in Nigeria

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 iv. To obtain more ways in which government could be properly advised in

order to make more funds available to the Bank of Industry for Industrial

growth and development.

1.5 Statement of the Hypothesis

Ho The bank of industry loans and advance does not in any way improve the

standard of productivity and viability of goods and services provided by small and

medium scale enterprises.

Hi the finances and advances given by the Bank of Industry do greatly boost

the morale and improved on the standard of products and services provided by the

small and medium scale enterprises.

1.6 Significance of the Study

The significant of the study is to review how best bank of industry can help in

the development of small scale industries and the entrepreneurship as well in

Nigeria.

i. I want to know from this study the ability of the banks in promoting

export through making available a high technical expertise advises to

entrepreneurs to help them produce qualitative goods and provision of

5
 viable goods and services that could be attractive and as well as dominate

domestic and international markets.

ii. To know the capability of bank of industry in terms of loans and to what

category entrepreneurs and ventures are to be adequately financed by

bank of industry.

iii. To know the type of viable enterprises and entrepreneurs that are

financed and supported for expansion.

iv. To equally know the number of small and medium scale enterprises that

were financed by bank of industry and how viable they are today.

1.7 Scope and Limitation of the Study

This study is conducted to know the efficiency of the Bank of Industry in

financing small and medium scale enterprises in Nigeria for growth and

development in the industrial sector of the economy since there are no

enough data and information. It will cover 1998-2002. This study is equally

restricting itself to knowing the expertise availability in the Bank of Industry

and whether there is need to improve on them.

1.8 Definition of Operational Terms

NIDB: Nigerian Industrial Development Bank (BIO) Bank of Industry.

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Loans: these are monies given to both industries as well as companies by a

bank e.g. Bank of Industry with motive of investing or making transaction

on which at the end of the month or year, they pay back with interest

Collaterals: these are tangible assets movable or stationary like land and

building that are given or shown, or its particulars surrendered to any bank

that is willing to give out loan to individuals or companies in case of failure

of the company to repay, the bank can confiscate them

Finance: these are funds or currencies that can be moved about with,

making buying and selling (transactions) possible, since they are generally

acceptable.

Enterprises: these are businesses set up with the motive of transacting

lawfully with the aim of making, maximizing profits or providing

humanitarian services to communities or industries.

Entrepreneurs: these are set of established, educated, oriented and

organized sets of persons that have the capability of setting up enterprises

and invest, with the aim of maximizing profit in the long run forties

consumption.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 The Concept of Small and Medium Scale Enterprises

A business maybe described as either large, medium or small scale depending on

the yardstick used to measure its size. Therefore, what is small depending on one’s
point of view may be considered a large enterprise in another person’s point of
view. For instance, most observers would argue that automobile manufacturing
firm is a large business depending on their own reasonable judgment. These and
main other issues raised the question as to what yardstick should be applied to
determine what is to he described as small, medium or large business. In most
cases, the number of employees in the firm’s payroll is sometimes perhaps the
most widely used criterion. Other criteria that draw a line of demarcation between
a small, medium and large business are turnover, assets, investment and paid-up
capital (SMEDAN, 2011)

Ayegusi (2014) defines a small business as an enterprise which has an investment

capital of up to one hundred and fifty thousand naira (N150,000) and employs not
more than fifty (50) persons or workers. In another view, small business is that
enterprise with total assets in capital, equipment, plant and working capital that

8
does not exceed two hundred and fifty thousand naira (250, 000) and employs not
more than thirty (30) fulltime workers (Julius 2016). These two definition did not
clearly differentiate micro, small and medium scale businesses. They only
categorized business as small if workers are between 30-50 and investment capital
of N150, 000-250, 000. The small and medium enterprise development agency
SMEDAN (2011) gave a better definition by drawing a line of demarcation
between small, medium and large enterprises.

According to Ayaggari, & Ban (2013), noted that small and medium scale
enterprises recognized as an instrument of economic growth and development. The
growing recognition of this fact has led the world bank group on small and
medium scale enterprise sector to ensure that it is the core value in its strategy to
foster economic growth, employment generation and poverty alleviation.

However, there is no one definite definition of small and medium scale enterprise
and its classification is based on value judgment which makes it subjective. The
Organization for Economic Co-operation and development (OECD) (2012), notes
that small and medium scale enterprises are a mixed group found in a wide array of
business activities and the concept of small and medium scale enterprise is relative
and dynamic. Ganhold (2018) submits that the statistical definition of small and
medium scale enterprise varies with countries and is usually based on the number
of employees, value of sales and/or value of assets and size of capital.

Ayaggari (2013). However, contended that the definition of small and medium
scale enterprise varies according to the context, author and countries. Ekpeyong
& Nyang (2016) notes, that in countries such as USA, Britain and Canada, small
scale business is defined in terms of annual turnover and the number of paid
employees.

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In Nigeria a clear cut definition between small and medium scale enterprise does
not exist According to CBN (2011) monetary policy circular No. 22 of 2011,
small scale industries are those enterprises which have annual turnover not
exceeding 500, 000 Naira, but in 2013, the federal government of Nigeria for
purpose of commercial bank loans defined small scale enterprise as those
enterprises whose annual turnover does not exceed five hundred thousand naira
(N500, 000) and for merchant bank loans, as those enterprises with capital
investment not exceeding two million naira (N2M) (excluding the cost of land) or
a minimum of five million and (N5M). Ogechuku (2016) writes that in the wake
of the structural foreign exchange market (SFEM) and structural Adjustment
programme (SAP) in 1993, the value definition of small and medium scale
enterprise was reviewed and subsequently increased to five million naira (N5M),
arising from this situation; there may be a need to classify the small scale
business into micro and super micro businesses. Responding to this observation,
CBN (2011) reported that at the 13th council meeting of the national council on
industry held in July, 2001 micro, small and medium enterprise (MSMEs) were
defined by the council as follows:

i. Micro/Cottage Industry: An industry with a labor size of not more than

10 workers, or total cost of not more than N1. 50 million, including
working capital but excluding cost of land.
ii. Small-Scale Industry: An industry with a labour size of 11-100 workers
or a total cost of not more than N50 million, including working capital
but excluding cost of land.
iii. Medium Scale Industry: an industry with a labour size of between 101-
300 workers or a total cost of over N50 million but not more than N200
million, including working capital but excluding cost of land.

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 iv. Large Scale: An industry with a labour size of over 300 workers with a
total cost of over N200 million, including working capital but excluding
cost of land.

In addition to their definition, small and medium scale enterprise can equally be
described and identified by means of their characteristics; Onwumere and
Nwachukwu (2012) identified 21 characteristics of small and medium scale
enterprise in Nigeria as follows;

 Labour intensive production processes

 Concentration of management on the key man
 Limited access to long time funds
 High cost of fund as a result of high interest rates and bank charges
 High mortality within their first two years
 Over-dependence on imported raw materials and space parts
 Poor inter and intra-sectional linkages. This means they hardly enjoy
economies of scale benefits
 Poor managerial skills due to their inability to pay for skilled labour
 Poor product quality output
 Absence of research and development
 Little or no training and development for their staff
 Poor documentation of policy, strategy, financial, plan and information
system
 Low entrepreneurial skill, inadequate educational or technical background
 Lack of adequate financial record keeping
 Poor capital structure, i.e. low capitalization

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  Poor management of financial resources and inability to distinguish
between personal and business finance
 High production cost of inadequate infrastructure and wastages
 Use of rather outdated and inefficient technology especially as it relates to
processing, preservation and storage
 Lack of access to international market
 Lack of succession
 Poor access to vital information

Small and medium scale enterprise in Nigeria can be found in all areas of
business. According to Ogundele (2017) small and medium scale enterprise
operate in the following areas:

i. Servicing: the small and medium scale enterprise in this category provide
service like photocopying, catering, transportation etc.
ii. Retailing: these are small and medium scale enterprise that involved in
buying goods and services from wholesalers for onward selling to
consumers
iii. Wholesaling: these are small and medium scale enterprise involved in
buying goods and services in bulk from producers for onward sale or
distribution to retailers
iv. Manufacturing: this category of small and medium scale enterprise is
involved in production of goods and services which are distributed by
agents or wholesalers and retailers

2.2 Small and Medium Scale Enterprises and Access to Financing

According to Beck & Ben (2018), small and medium scale enterprise access to

finance has been a subject of great interest to policy makers and researchers of
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both developed and developing economies because of the pivotal and significant

role of small and medium scale enterprise in growing the private sector and by

extension the economies of nations around the world. There exists diverse

definition of the concept “access to finance” World Bank (2014) defined access

to finance as the absence of price and non-price barriers in the use of financial

services determined by the forces of demand and supply. As the literature

documents, a number of issues are connected with access to financial services,

(Dela & Aremu, 2019), notes that improving access to finance entails improving

the degree to which financial services are available to all at a fair price.

Claesen (2015), opined that one of the issues connected to access to finance
relates to the question of whether financial services are available and in what
quantity. The second relates to cost, that is, at what price both implicit are
financial services available including opportunity cost. The third is about the
range, type and quality of financial services being offered. Can bold (2018)
argued that the problem of access to finance by small and medium scale
enterprise exists when projects that could be financed internally in the event of
recourses availability do not get external financing due to what Stieglitz & Weiss
(1981) referred to as principal-agents and transaction cost. He contended that this
happens when there is a lock between the expected internal rate of return of the
project and the rate of return that external investors require to finance it further,
lie asserts that the importance of small and medium scale enterprise access to
finance is predicated upon four reasons which he outlined as follows:

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One is that empirical evidence has shown that the expansion of access to finance
may reduce prevailing poverty particularly in developing countries. Two, the
channels through which financial development may lead to growth often include
access related stories. Three, there is a lack of financial services in emerging
economies compared with the extent of access in developed countries. Four, there
is lack or access to financial services by agents of economic growth and
development.

2.3 Financing of Small and Medium Scale Enterprise in Nigeria

Financing of small and medium scale enterprise in Nigeria has been a thorny
issue Nweachukwu (2012) submits that small and medium scale enterprise in
Nigeria have not made the expected desired impact on the economy and this may
unconnected to the numerous challenges facing the small and medium scale
enterprise among which is finance, drawing on this, Olorunshola (2011), asserts
that the major gap in Nigeria’s industrial development process is the lack of long-
run and in sonic eases short-term finance for small and medium scale enterprise .
as noted from the literature, finance sources can be categorized into informal and
formal sources.

Similarly, Ango (2011) stressed that the informal sources comprise of owner’s
savings/retained earnings, contribution/borrowing from friends, relations etc.
Okungwu & Sale (2011) observed that finance generated from informal sources
fall short of the required capital for the small and medium scale enterprise. As a
way of support, Ango (2011) commented that to raise the balance of the required
finance, entrepreneurs look up to the formal sources which comprise of banks,
other financial institutions, co-operative societies and government loan agencies,
14
Lawal & Ijaiye (2010) in their study observed that small and medium scale
enterprise face a lot of challenges in raising finance through the formal sources
especially as it affects banks and other financial institutions. In support, Oholi
(2002) wrote that most of the banks are not willing to advance loan tosmall and
medium scale enterprise mainly because of the absence of the so called collateral
security. Main-while, small and medium scale enterprise are in need of loans for
improvement in local, technology, transfer of foreign technology, domestic
capital formation, provision of more employment opportunities as well as earn
more foreign exchange than oil exports earn for the country. The paucity of
finance and the rigorous process to obtain it by small and medium scale
enterprise prompted the federal government of Nigeria to provide small and
medium scale enterprises’ access to finance. What is the story since Bank
Consolidation in 2005 to initiate different financing programmes and policies in a
bid to intervene through dedicated ministries and agencies Ango (2011) chronicle
these efforts to include?

i. Provision of direct financial assistance through government owned

financial institutions which include the Nigerian Agricultural cooperative
and Rural Development Bank, the Federal Mortgage bank of Nigeria etc.
ii. Provision of packages of subsidized or discounted loan portfolio through
special schemes arranged between government and commercial banks. For
instance, in 2001 the medium industries investment scheme was
established. This scheme requires banks to set aside 10% of their profit
before tax for equity investments in small and medium scale enterprise.
iii. Provision of capital to small and medium scale enterprise through soft
loans advanced by government owned financial institutions such as the
Nigeria industrial Development Bank established in 1964, the Nigerian

15
 Banks for commerce and industry established in 1973, the peoples Bank
established in 1986, the Economic Reconstruction fund established in
1989.
iv. Funding of small and medium scale enterprise in liaison with multilateral
financial institutions such as the world Bank, the African Development
Bank, and the international finance corporation (IFC) etc. in 1989, for
instance the world Bank gave Nigeria a facility of $270 million out of
which a total of $267.7 million was set aside for lending to small and
medium scale enterprise through eligible participating banks.
v. Issuance of directive on mandatory credits to small and medium scale
enterprise through the central Bank of lending (CBN) credit guidelines to
commercial banks in to mandatorily allocate 20% of their credits to small
and medium scale enterprises.

Osa-Afiana (2014), observed that this scheme was only partially successful
mainly due to the reluctance of banks to advancing loans to small and medium
scale enterprise without collateral security and appropriate credit scheme.
Some banks did not comply and were more interested and comfortable paying
the penalty attached to default. This directive was eventually abolished in
1996.

2.4 Problems Confronting Small and Medium Scale enterprise

Access to Fund

Since 1975 when the government change its industrialization policy to give
focus and eminence to small and medium scale enterprise away from import
substitution and large scale industrialization, there have been series of
incentives by financial institution and otherwise by successive government to

16
promote small and medium scale enterprise, the private initiatives are also
legendary. The achievement recorded cannot be said to commensurate with
the efforts put into it Despite the potential importance of small and medium
scale enterprise in economy, high mortality rate among established small and
medium scale enterprise is a matter of major concern in eloping economies.
International finance corporation (IFC) reported in 2002 that only 2 out of 10
newly established businesses survive up to fifth year in Nigeria. The report
was corroborated by small and medium Enterprise Development Agency of
Nigeria (SMEDAN) that only 15% of newly established businesses survive
first five years in Nigeria. This is a pointer to tact that there is a problem. The
poor performance of this sector has been attributed to their ability to access
funds to finance their businesses.

A study by Ekpenyong (2010) showed that very little financial supports have
been given by the traditional financial institutions (the commercial banks) to
the small and medium scale enterprise. The reasons are that small businesses
have serious inherent structural defects that make them high risk borrowers,
and the traditional banks are not structured to cater for the type of credit
demanded by the small businesses owing to the nature of their credit
assessment procedures (Hammond, 2013), the reasons for small and medium
scale enterprise failure to access funds successfully from the financing source
have been summarized by solola (2012). First, accessibility to bank loans is
greatly hampered by inability to meet stringent conditions set by financial
institutions especially bank. Second, banks generally consider small and
medium scale enterprise as high risk and as such would demand for as that
would put them in comfortable positions, third, majority of the small and
medium scale enterprise project are not bankable projects and as such, small

17
and medium scale enterprise are unable to convince lenders(banks) of the fifty
of such proposals. Fourth, cost of accessing funds (high interest rate) is
another limiting factor. Promoters of small and medium scale enterprise do
not provide sufficient information to accelerate the processing of their
financial request. Fifth, experience has shown that basic information such as
the market, the price of the equipment and machinery etc. are not forth
coming. These leads to delay in appraising the funding request, delay in funds
injection and projection implementation period.

Basically, the inherent structural defects of the small and medium scale
enterprise make them high risk borrowers and the major contributing factor to
their inability to access funds from the formal sources (commercial banks).
Hence, most of these financial institutions, banks for instance, ask for
collateral in lending to small and medium scale enterprise because of the high
transaction cost involved in the process of evaluating the financial statement
and supporting documents of the small and medium scale enterprise. The aim
is to minimize risk of loss of funds when this requirement is strictly enforced
(Adejoh, 2013).

2.4.1 Constraints to Small and Medium Scale Enterprise Financing in

Nigeria

The banks by their nature and position in the economy remain the unknown
formal source of finance for enterprise. A 2011 World Bank survey on the
Nigeria small and medium scale enterprise showed that although 85% of the
firms have relationship with banks, most of them have no access to their credit
(Terungwa, 2011). The lack of adequate financing is traceable to among other

18
reasons the reluctance of banks to extend credits to them for the following
reasons;

i. Inadequate collateral by small and medium scale enterprise

operators.
ii. Weak demand for the products of small and medium scale enterprise
as a result of the dwindling purchasing power of Nigerians.
iii. Lack of patronage of locally produced goods.
iv. Poor management of practices of small and medium scale enterprise
operators
v. Undercapitalization.
vi. Venture capital and equity is another source of financing small and
medium scale enterprise.

Some of the challenges facing Nigerian policy makers in the area of venture
capital include;

i. Institutionalizing tax benefit for equity investment to attract foreign

investors.
ii. Providing risk guarantees to create strategic venture capital industries
that improve self-reliance and curb import quotas.
iii. Enhancing venture capital capacity to stimulate and promote the
industrial expansion.
iv. Focusing equity investment on small and medium scale enterprise that
optimize resource utilization and assist local raw materials
development.
v. Promoting innovative business ideas, processes and techniques that
boost both productivity and profitability.

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2.5 Establishment of Bank of Industry (BOI)

The bank of industry (BOI) was established in October, 2001, then Nigerian
Industrial Development Bank (NBIC). It is Nigeria’s oldest, largest, and most
successful Industrial financing institution. The Nigerian Industrial
Development Bank (NIDB) Limited was incorporated in 1964 to address the
problem of long term financing to manufacturing and service industries in
Nigeria. The Bank took off in 1964 with an authorized share capital of
$2million.

BOI devotes 85% of the Bank’s resources to small and medium scale
enterprise and 15% for large enterprises who have linkages with small or
medium enterprises. BOI has partnered with State Governments and
encourages them to set up Industrial Parks to assist in situating entrepreneurs
in the same area and help them reduce operating costs. The Bank also renders
support to businesses that add value to local raw materials (creating value
chains), generate employment, and have the potential for export. Strong
external working relations have also been developed with both local and
international Development Organizations such as; United Nation
Development Programmed (UNDP), United Nations Industrial Development
Organization (UNIDO), African Development Bank (AFDB), Small and
Medium Enterprise Development Agency of Nigeria (SMEDAN), Nigerian
Association of Small Scale Industrialists (NASSI) and Nigerian Association
of Small and Medium Enterprises (NASME), Manufacturers Association of
Nigeria (MAN) etc. the bank also partners with commercial bank that assist
the entrepreneurs with working capital (Oputu, 2012).

2.6 Functions of Bank of Industry

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i. The Bank of Industry (BOI) targets the industrial sector of the
economy. The bank of industry is set up to encourage industrial
production and value creation by manufacturing and processing
activities of businesses. The objective is to provide the industrial
sector with finance as well as business support services. It targets
sub-sectors including Agricultural and Agro-allied businesses,
solid minerals, Oil and Gas, manufacturing and any business
which operates in any of these value chains and uses equipment
to carry out processes that add value.
ii. The Bank of Industry finances plant and equipment. The bank of
industry does not finance raw materials, nor working capital, nor
lands and building. The bank is principally set up to finance
industrial equipment. In the case of primary agricultural
producer. For instance, what the BOI will finance is the
equipment that is needed to produce the goods. That could be in
the case tractors, combine harvesters, dryers, freezer, or any other
such machinery.
iii. The Bank of Industry disburses funds to the vendors and
suppliers of the equipment your business needs: The bank does
not disburse the loan to the borrower but rather to the vendor of
the equipment that the loan is intended to finance. The bank will
carry out all necessary due diligence to ensure that the quotation
from the vendor has been vetted for genuineness. The bank will
want to ensure that the price quoted is reasonable for the type of
equipment being quoted for. While the bank will not necessarily
finance the lowest quotation, the bank will want to confirm that
the purchase is indeed value for money. Where possible and
21
 applicable, the bank will encourage borrowers to first investigate
sourcing their equipment from local manufacturers that can be
identified through the federal institute of industrial Research
Oshodi (FIIRO). This ensures that spare parts and support
maintenance are locally available at prices that immune from
exchange rate risks.
iv. The Bank of industry requires collateral but is very flexible about
its collateral requirements: Many prospective borrowers are put
off by the requirement for collateral to back their borrowing.
Obtaining a certificate of occupancy (C of Os) for landed
property in many parts of Nigeria is a herculean task and this has
prevented many businesses from accessing finance. This is one of
the usual concerns that most borrowers have. The good thing is
that the BOI accepts collateral other than landed property. They
also know about the difficulty in obtaining C of Os and actively
embark on advocacy to the states affected.

Other forms of security they accept include:

i. All assets debenture on existing and future plant and equipment

and raw materials subject to a cover of 2.5 times the loan amount
ii. Bank Guarantee
iii. Performance Bonds from any one of ten accredited Insurance
companies
iv. Advance Payment Guarantees

And in some cases they would also require the personal guarantee
of the promoter(s) if a lender already has an existing loan from

22
 another lender and have provided any of the acceptable collateral as
above. The bank of industry is willing to share the collateral pari-
pasu with the pre-existing lenders provided that collateral is
adequate to cover the total requirement of both loans. The bank of
Industry is also accepting third party collateral subject to a tripartite
agreement in place between the bank, the borrower and the owner
of the assets. Of course such third party collateral will be
thoroughly vetted to ensure genuineness and validity of title.

2.7 Solution to Small and Medium Scale Enterprise on Finance

Unlike the large-scale industrialization strategy, which is the category of

import-substitution strategy practiced by Nigeria without any success, small-
scale industrialization has made a very glaring impact on the economy of
nations.

Roles of Small and Medium Scale Enterprise in Economic Development:

i. Technological Industrial Development: they have short-term

gestation period and high potentials for quick yield on investment. They
therefore provide promising alternatives for countries that desire the
fast option for industrial development.
ii. Employment Generation: it has been observed the more jobs per unit
of investment capital and per unit energy consumed are created
worldwide by small and medium scale enterprise than large-scale
enterprises.
iii. Technological Acquisition: They provide opportunities for the
development of local skills and technological acquisition. The “Aba
made” syndrome is a clear manifestation of such technological
23
 acquisition and if encouraged will give rise to rapid economic
development.
iv. Capacity building: They provide a training avenue for the creation of
local entrepreneurs in several areas of economic activities. They are
regarded as the ’University’ where a large class of Nigeria
entrepreneurs usually receives training. It is therefore more important to
lay a good foundation of an industrial class by promoting small
entrepreneurs than it is to build a few large factories.
v. Promoting Growth: Most are involved in primary and secondary
economic endeavors that rely heavily on locally sourced materials,
equipment and parts. As a result, they achieve high local value added
operators.
vi. Increased standard of living: sound development of small and
medium scale enterprise has positive implications for improved
standard of living of the citizenry and generates foreign exchange for
further development of the economy.
vii. Industrial Dispersal or spread: They could easily be located in rural
areas because they can survive on rudimentary industrial infrastructure.
Consequently, they serve as major facilitators for industrial dispersal
and rural development and thus help in mitigating the rural-urban drift.
viii. Serving of large-scale industries: Raw material and goods are
supplied to the large-scale industries to consume.
ix. Export promotion: Most small and medium scale enterprise engaged
in manufacturing serve as channels for import substitution and export
promotion.
x. Structural Transformation or rural areas: When they are cited in
rural areas, they help to improve rural infrastructure and the living
24
 standard of the people. Social amenities such as: road, electricity, pipe-
borne water, telecommunication facilities, etc. are attracted to the areas
as a result of the presence of small and medium scale enterprise in the
community.
xi. Flexibility: They react swiftly to change in the operating environment.
They therefore provide good testing ground for new products and
nascent production technique.
xii. Low Take-off requirement: Take-off capital requirement are low.
Small-scale industrialization therefore widens the scope for
participation in industries activities by individuals with limited capital.
They are effective instruments of mass participation in industrial
development.

2.8 Theoretical Framework

Grameen Social Business Model a Manifesto for Proletariat Revolution.

Rashidul Ban (2014) detailed how to develop the idea of microcredit and
social business and places them within the context of economic theory and
provides a scientific underpinning for why he believes these two concepts can
change the course of economic and human development. The author further
claims that Grameen Bank (GB), founded by Muhammad Yunus, provides
developmental tools to poor people, especially women, the work proposes two
theories to explain the influence of Grameen Bank. Firstly, microcredit spurs
entrepreneurship in people living in poverty and secondly social Business
(SB), offers a new dimension for capitalism. Ben (2011), suggest that
25
microcredit income have a positive linear relationship because income tends
to increase when the poor have been granted access to social business
organizations like the Grameen Bank. The author shows how these two
concept have gone from being theory to inspiring practices adopted
internationally by universities (such as Glasgow university), entrepreneurs
(such as Franek Ribound) and corporations (such as Danone). Yunus claims to
demonstrate that the Grameen Bankand social business can homes the
entrepreneurial spirit to empower poor women and alleviate their poverty. The
author stresses that microcredit is just an economic theory that does not work
unless one tries hard enough. However, the Grameen model works very well
for the poor and especially the women who may not be able to access loans
from banks. These actually reduce the level of poverty and also empower
women who may have remained neglected in the society.

Brown, Bane & Lup (2014), employed panel data techniques to analyze a
survey of 297 new small enterprises in Romania containing detailed
information from the start-up date through 2016. They found strong evidence
that access to external credit increases the growth of both employment and
scales.

Surveys conducted in Asia, south America, Caribbean region, and in Africa

indicated that microfinance institutions have contributed a great deal in
poverty alleviation. The poor people have significantly been able as access
friendly micro-credit loans and have ventured in entrepreneurial activities. In
addition to earning a profit, sustainable micro-finance providers are in a better
position than their subsidized peers to expand their operations and share of the
market (Ogbor, 2019). Santerm (2018) argues that through the provision of

26
credit, MFIs will stimulate and create opportunities for the poor to set up
small businesses.

Kevan & Wydick (2015), stated that the provision of credit to the poor
increases capitalization of business, employment creation and long-term
income growth in support of Muktar (2017), Agriculture and microenterprise
in Nigeria contributes immensely to job creation, and are of particular interest
to all Microfinance Bank in rural areas. Microfinance banks have so far
engaged in extending credits and other services to many rural enterprise and
hence generating employment and promoting entrepreneurship. The
promotion of employment in rural areas by microfinance banks covers the
following areas; blacksmithing, gold-smiting, watch repairing, basket
weaving, barbing, palm wine tapping, cloth weaving, dyeing, food selling,
carpentry, brick-laying, pot-making, leather works and drumming.

Luper (2012), examined banks financing to small and medium scale financing
in Nigeria with a view to determining if there is any difference between small
and medium scale enterprise financing before and after banking sector reforms
(bank consolidation in 2005). Using descriptive and sample test the findings
revealed that banking sector reforms led to a decline in small and medium
scale enterprise financing from 5. 78 percent to less than one (0.47) percent on
average and there is significant improvement in small and medium scale
enterprise financing in Nigeria after bank consolidation. Mamman & Aminu
(2013) investigation of the effect of 2005 banking reforms on loan financing
of small and medium scale enterprise in Nigeria. Iloh (2013), assessed the
implications of bank consolidation on lending (financing) to small and
medium scale enterprise in Nigeria Using ordinary least square, correlation
matrix test and Granger-causality test, the study found out bank deposit
27
impacted on lending which has insignificant effect on small and medium scale
enterprise.

CHAPTER THREE
RESEARCH METHODOLOGY

28
3.1. Research Design

Saunders, lewis and Thornhill (2012) defined research design as a general plan to
answer a research question. A research design, also called a research strategy, is a
plan to answer a set of questions (M.C combes 2019). It is framework that includes
the methods and procedures to collect, analyze and interprets data. In other words,
the research design describes how the researcher will investigate the central
problem of the research and is thus part of the research proposal. Research design
is a kind of blue print that guide the researcher in his or her investigation. It is a
format in which the researcher employs in order to systematically apply the
scientific method in the investigation of the problem. This project adopted
description survey research design with both qualitative and quantitative methods.
The design is appropriate in assessing how Bank of industry (BOI) Finance Small
and Medium Scale Enterprises.

3.2. population, sample size and sampling technique.

Population of study for any research work has been variously defined by different
scholars and their definitions pointed towards the same direction.

According to OKEKE (2011), a population consists of subject or observation

relating to the particular phenomenon of interest to the investigator. Adeniyi
(2011) see it as the total number of large habitations of people in one geographical
area. Popoola (2011) defined population as the totality of the items or objects
under the universe of study. Avwokeni (2016) referred to population of study as
the set of all participant that qualify for a study. Akinade and Owolabi (2019)
defined population as the total set of observations from which a sample is drawn. It
often connotes all the member s of the target of the study as defined by the aims
and objectives of the study. A target population comprise of the entire group which

29
the researcher wishes to study. It is the population on which generalization is
based. We concur with the definitions of the above scholars. But we conceptualize
population to mean the whole body of items objects, materials or people that fall
within the geographical location in which a researcher intend to investigate for his
study. The population of this study is 57 staff of Bank of industry Abuja branch.

3.2.1 Sample Size

Taro Yamane formula was used to determine the desired sample size of the
research work.

Given the survey population of 57 Staff and making an allowance for error of 5
percent, the sample size is determinant at approximately 50 staff as worked below.

N
n=n= 2
1+ N (e)

Where:

n= the required sample size from the population under study

N= the whole population that is under study

e= the precision of sampling error which is usually 0.10, 0.05 or 0.01

Therefore:

57
= 1+ 57 ¿ ¿

57
= 1.1425 = 50

3.2.2 Sampling Technique

30
Stratified the random sampling technique was used to select the sample across the
department that constitute the Bank of Industry. The table below presents the
stratified sample size randomly drawn from each of the 6 departments.

Table 1: population and sample size

Departments in Bank of Industry Population Sample Size Percentage

Micro Enterprises 10 9 18%
Corporate service 9 8 16%
Risk Management 6 5 10%
Finance 8 7 14%
Small and medium enterprise 20 17 34%
Large enterprise 4 4 8%
Total 57 50 100%
Source: field survey 2021

3.3 Methods Data collection

During the course of this research, both primary and secondary data were used.
The primary data were obtained from the source. This was used where one
required information does not exist elsewhere or in another form or when the topic
was being researched on for the first time. The researcher collected primary data
through going to field.

These are self-administered questions that are both structure and semi-structured
formalized questions used in the survey to collect information which is later
analyzed to provide result necessary for solving a given research problem. The
research used self-administered questionnaires. These allowed respondents to
choose from alternative that were provided by the researcher. The questionnaire
was divided into two sections. Section (A) contain questions regarding to the

31
general information of the respondents. Section (B) contain questions relating to
how Bank of industry finance small and medium scale Enterprises.

Secondary data was the one obtained from sources which already exist about
organization and had been used before, for example information from journals,
books and internet. The researcher collected information from both external and
internal sources.

3.4 Procedures for Data Analysis and Model Specification

This involves editing, coding, measuring and tabulation of the collected data. A
quantitative method will be used in computation of percentages and totals. Table
will be used to present and summarize data for easy interpretation and display of
information. The formula for calculating chi-square is stated below;

X2 = ∑ (F0-Fe)2
Fe
Where f0 = observed frequency of the data
Fe = Expected frequency of the data
X2 = Chi-square

∑ = Summation sign

The degree of freedom is

(R-1) (C-1)

Where R = Row

C = Column

Decision rule

32
Accept the null hypothesis (H0) if the computer value is greater than the critical
value (table value) and reject the alternative hypothesis (H i). Accept the alternative
(Hi) if computed value is less than the critical value (table value) and reject the null
hypothesis.

3.5 Justification for the Methods Used

The research work adopted the use of survey research design because it is efficient
for gathering diverse opinions from a wide population. The study also adopted the
used of stratified random sampling technique to uncover the sample size from each
strata (staff) of the departments in Bank of industry without any form of bias that
may influence the findings. The chi-square model became the appropriate model to
test the hypothesis of the study because there is more than one dependent variable
under the two models to be tested. The choice of the variables utilized by the study
was necessitated by the fact that they are about the best measures of Small and
Medium Scale Enterprises, financing known to the researcher.

CHAPTER FOUR

33
 DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION

This chapter is devoted to the presentation and analysis of the data collected for
the study. The data collected were analyzed using sample percentage and
interpreted with chi-square method in such a manner that specific strategies of
financing small and medium scale enterprises in Nigeria through Bank of industry
is made known. Thus, this section contains the presentation and analysis of the
data, Including test of hypothesis.

4.2 QUESTIONNAIRE DISTRIBUTED

The questionnaire is divided into two sections. Section (A) involves demographic
distribution of respondents. Section (B) involves general questions relating to how
Bank of Industry finance Small and Medium Scale Enterprises. Options yes or No
are made available for respondent to tick if they agree or disagree with the
questions that are presented to them. A total number of twenty (20) questions were
contained in the questionnaire and these questions were analyzed as follows;

Table 4.1 Gender Distribution of respondents

Sex No of respondent Percentage
Male 32 64%
Female 18 36%
Total 50 100%
Source: field survey, 2021

The above shows that majority of the respondents are males, and this may be due
to the facts that most of the staff of Bank of Industry are male.

Table 4.2 Age distribution of respondents

34
 Age No. of respondent Percentage
20-30 5 10%
31-40 14 28%
41-50 20 40%
51 and above 11 22%
Total 50 100%
Source: field survey, 2021

The table above shows that 40% of the respondents are between the age bracket of
41 to 50 years, 28% are 31 years and above, 10% are 20 to 30 years and 22% are
above 51 years.

Table 4.3 Marital status of respondents

No of respondent Percentage
Single 7 14%
Married 40 80%
Divorced 3 6%
Total 50 100%
Source: field survey, 2021

The above table shows that 80% of the respondents are married, 14% are single
and 6% are divorced. This shows that most of the staff in Bank of Industry are
married.

Table 4.4 what is the minimum qualification to obtained loan

Response No of respondent Percentages

35
 B. Sc./HND 24 48%
OND 22 44%
GCE “O” level 4 8%
Total 50 100%
Source: field survey, 2016

From the above table, it is clearly stated that most people engaged in SMEs and
can access loan are from OND, B. Sc and HND as that of B. Sc/HND constitute 24
respondents which represent 48% and is almost the same with that of OND which
is 44%.

Table 4.5 Does the Bank of industry loans and advances in any way improve the
standard of productivity and viability of goods and services provided by Small and
Medium Scale Enterprise?

Respondent No of respondents Percentages

Yes 46 92%
No 2 4%
No idea 2 4%
Total 50 100%
Source: field survey, 2021

It is deduced from the above response that 92% agree that loans and advances
given by Bank of industry do greatly improve the standard of productivity and
viability of goods and services provided by small and medium scale enterprises.
4% says it does not improve the standard and 4% have no idea.

Table 4.6 Does the finances and advances given by Bank of Industry boast of the
morale and provided by Small and Medium Scale Enterprises

36
 Response No of respondent Percentage
Yes 30 60%
No 10 20%
No idea 10 20%
Total 50 100%
Source: field survey, 2021

The response above shows that 60% of the respondents are the opinion that
finances and advance go a long way in boasting the morale and the standard of
goods and services provided by Small and Medium Scale Enterprises. 20%
disagree by saying No and 20% have No idea

Table 4.7 How many years does it take for bank of industry goosefoot loans and
advances enough to teeming industrialist to enhance their productive capacity?
Response No of respondent Percentages
5-years 40 80%
2-5 years 10 20%
Total 50 100%
Source: field survey, 2021

Froom the analysis of the above table it is obvious that 80% of the respondent are
on the opinion that the highest necessary length of years one can access loan from
bank of industry is 5-10, while 20% of the respondent are on the opinion that it
shouldn’t be less than 2 years and should not be than 5years.

Table 4.8 In your opinion, what do you think is the role of bank of industry to
SMEs?
Response No of respondent Percentage
Issuing loan 35 70%

37
 Accessing SMEs 15 30%
Total 50 100%
Source: field survey, 20221

Base on the responses 36 respondents which constitute 70% of the total

respondents says that loans should be the major priority of the Bank of industry
while 15 respondents which constitute 30% of the respondent opined that the bank
of industry should have little access.

Table 4.9 Does the bank of industry undergo a detailed feasibility study before
apprising loans.
Response No of respondent Percentages
Yes 46 92%
No 2 4%
No idea 2 4%
Total 50 100%
Source: field survey, 2021

The responses above show that 92% feel that regular check of feasibility study
should be their major assessment before SMEs can access loan from the bank, 4%
says is of no importance, and 4% have no idea.

Table 4.10 Do bank of industry includes in sensitization of the entrepreneurs to

make them know the kind venture to enter into
Response No of respondent Percentages
Yes 30 60%
No 10 20%
No idea 10 20%

38
 Total 50 100%
Source: field survey, 2016
Analysis of the above table shows that 60% of the total respondent are on the
opinion that sensitization of entrepreneurs is adhere by the bank of industry while
20% say no and 20% have no idea.
Table 4.11 How regularly does the bank of industry checkmate the management of
SMEs
Response No of respondent Percentage
Annually 10 20%
Half yearly 10 20%
Monthly 30 60%
Total 50 100%
Source: field survey, 2021
From the above table 60% of the respondent says that the SMEs write and forward
the report on monthly bases, 20% says that it is half yearly and 20% percentage are
on the opinion that the SMEs forward their report annually to management to
respond to some areas not found to be cleared to the BOI. This implies ensuring
adequate control of financial resources.

Table 4.12 Do the management of the bank of industry prefer giving out loans to
their relatives and friends than other expect entrepreneurs.
Response No of respondent Percentages
Yes 40 60%
No 5 20%
No idea 5 20%

39
 Total 50 100%
Source: field survey, 2016
The responses show that 60% of the respondents Greed that the management of the
BOI engage in such act, 20% say no and 20% have no idea. This implies that the
management of BOI is reducing the strength of entrepreneurs.
Table 4.13 Does the BOI issue query to SMEs that involves fraud?
Response No of respondent Percentages
Yes 40 60%
No 5 20%
No idea 5 20%
Total 50 100%
Source: field survey, 2021
From the responses in the able above, 60% say that BOI issue query to those SMEs
involve in fraudulent activities and embezzlement, 20% say no and 20% have no
idea. It suggests that BOI query should be given to any case of fraud and
embezzlement.
4.3 Test of Hypothesis
In testing the hypothesis earlier formulated in chapter on of this research, the
researcher used chi-square method of analysis (x2) distribution.
The formula for calculating chi-square is (x2) is thus;
X2 = ∑ (f0 – fe)2
Fe

Where F0 = observed frequency of the data

Fe = Expected frequency of the data
X2 = chi-square
∑ = summation sign
The degree of freedom is

40
 (R-1) (C-1)
Where R = Row
C = Column

Decision Rule
Accept null hypothesis (H0) it the computed value is greater than the critical value
(table values) and reject the alternative hypothesis (Hi) and vice versa.
Hypothesis
Ho: The bank is industry loans and advance does not in any way improve the
standard if productivity and viability of goods and services provided by small and
medium scale enterprises.
Hi: the finances and advance giving by the bank of industry do greatly boost
the morale and improved on the standard of product and services provided by the
small and medium scale enterprises.
In testing the above hypothesis, the researcher made use of question that were
analyzed in table 4.5 and table 4.6 the table is therefore extracted for the purpose of
testing the above hypothesis. The extracted table is shown as follows;
Table 4.10 Observed value

S/No Responses Table 4.5 Table 4.6 Total

1 Yes 46 30 76
2 No 2 10 12
3 No idea 2 50 12
Total 50 50 100
Expected value = ∑ = RT x CT
GT

41
Where RT = Row Total
CT = Column Total
GT = Grand Total
(1) 46 = 76x50 = 38. 00
100
(1) 30 = 6x50 = 38. 00
100
(2) 7
(3) 2 = 12x50 = 6. 00
100
(4) 10 = 12x50 = 6. 00
100
(5) 2 = 12x50 = 6. 00
100
(6) 10 = 12x50 = 6. 00
100
Table 4.10 Computation of Chi-square (x2)
F0 Fe F0-Fe (F0-Fe)2 (F0-Fe)2
46 38 8 64 1.68
30 38 -8 64 1.68
2 6 -4 16 2.67
10 6 4 16 2.67
2 6 -4 16 2.67
10 6 4 16 2.67
Total 14.04

42
Degree of freedom (DF)
= (3-1) (2-1)
= (2) (1)
= 2
Table value to. 05 = 5.99 (i.e. 2 under 0.05)

if the computed value is greater than the critical value we accept the null
hypothesis (Ho) and reject the alternative hypothesis (Hi).
4.4 Discussion of Finding
Our findings show that the computed value is greater than the table value (i.e.
14.014>5.991), we therefore, reject the alternative hypothesis (H i) and accept the
null hypothesis (Ho) which says that there is significant relationship between the
independent of BOI and SMEs. Table 4.5 shows that 92% of the respondents a
firm that BOI check in the SMEs before appraising loans to help in financial
control of resources. Table 4.6 indicates that there is much to be done is creating
awareness in using ethical code conduct of BOI profession in ensuring that
adequate measures is put in place for financial control.
4.4 Summary of Finding
This chapter discusses the data presentation and analysis to be able to test the
hypotheses and come out with a reasonable conclusion of the study. The chapter
contains the analysis of the questionnaire distributed for the purpose of the study as
well as the calculation of chi-square to determine which hypotheses are to be
accepted or otherwise.

CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION

43
5.1. SUMMARY
Following the findings, it can be seen that commercial bank loans to small and
medium scale enterprise in Nigeria has come to point where it will stimulate
investment in small and medium scale Enterprise on economic growth.
Commercial Bank loans to Small and medium scale Enterprises have not done
anything significantly to improve the loans of Small and medium scale Enterprises.
Therefore, it becomes paramount for commercial banks to increase the percentage
of loans to accredit to Small and medium Scale Enterprises and to cut down the
requirements for acquisition of loans by Small and medium scale Enterprises to a
minimal level within the capacity. In recognition of these potential role of the
sector, successive government in Nigeria have continued to articulate policy
measures and programs to achieve industrial growth and development, including
direct participation, alone or jointly with the private sector, interest groups,
assistance from external agencies provision of industrial incentives and adequate
finance.

5.2. Conclusion
From the above findings, this research concludes that loans to Small and medium
scale Enterprises has a significant impact on economic growth of Nigeria. This is
evident with its contribution to the Nigeria Gross Domestic Product (GDP) over
the period under study.
Given the above, it is clear that if proper attention is given by government and
proper policies are directed at improving the situation, given out loans to the SMEs
is not only limited but is dwindling over the years and the Small and medium scale
Enterprises cannot raise their fund from savings as a result of highly skewed
income distribution that kept operators impoverished. Unemployment rate is still
44
very high and one realistic way of reducing it is to empower the Small and medium
scale Enterprises to serve as a source of income for the government to develop the
nation’s economy.

5.3. Recommendations
Driven by the findings in this research, Small and medium scale Enterprises in
Nigeria have a long way to go for the sector to be relevant, focused, productive
enough and play the crucial role it is expected to his relations to contributing to the
economy growth of the country.
The following represent key recommendations to Government to make Small and
Medium Scale Enterprises in Nigeria have virile and vibrant structure through.
i. Creation of an enabling environment for Small and Medium Scale
Enterprises optimum performance.
ii. Government should pursue with vigor, the total deregulation of the
financial seeks and fine its monetary policies so as to reduce the rate of
interest change by banks as well as bring about a more realistic exchange
rate of naira.
iii. Improving business condition which will lead to proper information,
clear accounting standard, impartial legal system, effective bankruptcy
procedures, favorable tax policies and prompt payment of government
debts.
iv. Helping Small and Medium Scale Enterprises meet the requirements of
financial institutions.
v. Making the financial system more accessible to Small and Medium Scale
Enterprises.
vi. Expanding the supply of finance through the non-financial private sector.

45
vii. Government should as a deliberate policy, encourage rural based
industrialization whereby investor in different communities should be
encouraged to establish Small and Medium Enterprises that would be
based entirely on local raw materials, including machines equipment.
viii. Government should formulate policies that will enhance agricultural
development and production so that resources can be transferred from
this sector to facilitate growth of the non-agricultural sector especially to
small and medium industries.
ix. There should be policies that will focus on technical education at all
levels, for development of human capital.
x. Government should formulate policies that will deal with the problem of
specific sectors. For example, substituting, protecting, favoring fostering
small and medium Scale Enterprises at one time or the other.
xi. Government has to find way to encourage financial institution to lend to
Small and Medium Scale Enterprises by providing guarantees, interest
rate subsidies and other incentives.

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46
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49
APPENDIX I

Department of Accounting
Faculty of Administration

50
 Nasarawa Satate University, Keffi
Nasarawa State.
P.M.B 1022

Dear Respondent,
REQUEST TO FILL QUESTIONNAIRE
I am an under graduate Student of the above Department in Nasarawa State
University (NSUK). As a prerequisite for the award of Barchelor of Science (B.Sc) in
Accounting, I am carrying out a research study on "Financing Small and Medium
Scale Enterprises" A Study of Bank of Industry, Abuja Branch.
I therefore plead for your kind assistance on completing the attached
questionnaire and returning same to me. You are therefore that all information
given will be treated with utmost confidence and used for the purpose of the
study.
Thanks for your cooperation.

Yours faithfully
___________________
OKOLIKO SAMUEL EKOWOICHO
NSU/ADM/ACC/2255/17/18

APPENDIX II
QUESTIONNAIRE TO STAFF OF BANK OF INDUSTRY ABUJA BRANCH
Please kindly tick within the box, any option that is best known to your
knowledge

51
SECTION A : BIO DATA
1. Name: .......................................................................
2. Address: ......................................................................
3. Gender: Male [ ] Female [ ]
4. Age: range: 20 - 30 [ ] 31 - 40 [ ] 41 - 50 [ ] 51
and Above [ ]
5. Marital Status: Single [ ] Married[ ] divorce [ ]
6. Educational qualification: GCE ' O ' Level [ ] OND/NCE [ ]
BSC/HND[ ] MSC / PhD [ ]
7. Other qualification: please specify....................................................
SECTUON B :
1. What is the minimum qualification to obtain loan from Bank of i Industry?
GCE 'O ' level [ ] OND/NCE [ ] BSC/ HND [ ]
2. Does the Bank of Industry loans and advances in any way improve the
standard of productivity and viability of goods and services provided by small
and medium Scale Enterprises? Yes [ ] No [ ] No Idea
[ ]
3. Does the finances and advances given by Bank of Industry boost the morale
of Small and medium Scale Enterprises? Yes [ ] No [ ]
No Idea [ ]
4. How many years does it take for Bank of Industry to goosefoot loans and
advances to teeming industrialists to enhance their reductive capacity?
2-5 years [ ] 5-10 years[ ]
5. Does Bank of Industry request for collateral before giving loans finances to
Small and Medium Scale Enterprises? Yes [ ] No [ ] No
Idea [ ]
6. Does the Bank of Industry undergo a detailed feasibility study before

appraising loans? Yes [ ] No [ ] No idea [ ]

52
 7. In your opinion, what do you think is the role of Bank of Industry to Small

and Medium Scale Enterprises? Issuing loan [ ] Assessing SMEs [ ]

8. Does the Bank of Industry involve in sensitization of the entrepreneurs to

make them know the kind of ventures to enter into? Yes [ ] No [ ] No

idea [ ]

9. How regularly does the Bank of Industry checkmate the management of Small

and Medium Scale Enterprises? Quarterly [ ] Half yearly [ ] Annually [ ]

10. Do the management of the Bank of Industry prefer giving out loans to their

relatives and friends than other expert entrepreneurs? Yes [ ] No [ ] No idea [

]

11. Does the Bank of Industry issue query to Small and Medium Scale

Enterprises that involve in fraud? Yes [ ] No [ ] No idea [ ]

12. Does the Bank of Industry charge low interest on loans and advances they

give to small and Medium Scale Enterprises? Yes [ ] No [ ] No idea[ ]

13. Has the Bank of Industry been able to achieve their objective of strengthening

the economy with the loans they give? Yes [ ] No [ ] No idea [ ]

14. Do Bank of Industry checkmate industrialist make sure that loans are

committed the proposed business? Yes [ ] No[ ] No idea [ ]

15. Does government have favorable policies towards development of Small and

Medium Scale Enterprises? Yes [ ] No [ ] No ideas [ ]

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16. The Bank of Industry have good relationship with industrialists to enable

them source for loans? Yes [ ] No [ ] No idea [ ]

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