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THE ROLE OF BANKS IN FINANCING SMALL SCALE BUSINESS IN NIGERIA”. (A CASE STUDY OF AGBARHO MICRO FINANCE BANK LTD)
1.1 BACKGROUND FOR THE STUDY
Banks are in the Business of accepting deposit from the public and on lending those funds to borrowers and make profit in return. Banks therefore as a custodian of depositors funds will from time to time have to repay usually on demand, the money that those depositors have placed with the bank and so must ensure that any money that they have lent to borrowers can be safely repaid within a short period of time and is profitable to the Bank.
The oxford English Dictionary defined a bank as an establishment for the custody of money which it pays out on a customer order.
A bank can also be defined as a dealer in debt. This definition which aptly describes the activities of the bank is more appropriate than the dictionary definition. A bank note is a sort of promissory note an acknowledgement of the issuing banks debt to whomsoever maybe the bearer of it by means of loans and overdrafts a bank create debts to itself. All these and other forms of debts from the stock in trade of modern banks.
More so, Banking service are not other convince not cheap and not easily assessable by the member of the public. This is why many banks finds it difficult to mobilize domestic savings and giving effective lending service to their customers undoubtedly many banks customers may be suffering in silence due to limited service of the banks.
1.2 STATEMENT OF THE PROBLEM
In the course of this study, the researcher wants to examine or investigate what benefits that are derived from the banks and also the problems encountered by banks
- Why is it that many Banks (commercial Banks) go into liquidation?
- Does a bank really finance small scale business?
- Why is it that small scale Business finds it difficult to obtain credits from the bank?
1.3 PURPOSE OF THE STUDY
The purpose of this research work could be itemized below.
- To know the role of banks inNigeriaeconomy in respect of:
- Training of manpower.
- Output level.
- To give possible ways of improving the operations of the banks.
- To know some of the problems militating against the effective and efficient management of business.
1.4 RESEARCH QUESTIONS
In the quest of fully understanding the role of Banks inNigeriaare raised to guide the researcher and the reader.
- Why do banks go on liquidation?
- What are the problems in which customers face in transacting business with banks?
- What are some of the ways in improving banking system inNigeria?
- What are the causes of delay and process involved in obtaining loan from the banks?
- What are the possible solution to the problems facing banking system inNigeria?
- What are the factors responsible for the various problems faced by banks inNigeria?
- What are the contribution of banks towards the nation development?
- Why is it that small scale business finds it difficult to obtain loans from the bank?
- What is the impact of bank loans or credit in small scale business?
- What are the problems militating against banks inNigeria?
1.5 SCOPE OF THE STUDY
The research work is limited to Ughelli North Local Government Area,DeltaStateofNigeria. The researcher are particularly focusing her attention on Agbarho Micro Finance Bank Ltd, as a case study. Though the findings can also be used by other banks in the banking industry.
1.6 SIGNIFICANTS OF THE STUDY
This research work shall be useful to all banking industry inNigeria. It will be of importance to all financial institution inNigeria. It will also contribute to the body of the knowledge of students who may want to carryout further research on this topic.
1.7 LIMITATION OF THE STUDY
In the process of carrying out this on “the role of Bank in Nigeria Economy” the researcher encountered some limitation such as:
1. LIBRARY: It was difficult to obtain related materials for the project work due to inadequate and insufficiency of current books in the library.
2. QUESTIONNAIRE: it was also difficult to find a wizard in small scale business to get useful and relevant information my project work.
1.8 DEFINITION OF TERMS
a. CHEQUE: This is a bill of exchange drawn on a bank payable on demand.
b. BANK: Is defined as an establishment for the custody of money which it pays out on a customers order. It can also be said that bank is a dealer of debts.
c. MONETARY POLICY; Is a government policy which is used to regulate the volume of cash flow in circulation.
d. SMALL SCALE BUSINESS; a small scale business is a business that small amount of money can easily finance or is a business that can be operated with little fund.
e. BILL; is a statement of items and charges made for services rendered, products purchased or rented or accommodation used. Also a draft of a law for consideration by a legislative committee or body