Financial Institutions As A Catalyst For Small Business Development

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Financial institutions are intermediaries between the owners and users of fund. An intermediary is a go between owners and financial intermediary. This is also an institution which links lenders and borrowers either (as principal) by obtaining deposits from lenders and then retaining to borrower or (a broker) arranging a transaction.
They provide obvious and convenient ways in which lenders can save money which can then be lent our on their behalf. They aggregate savings and provide ready source of funds from surplus units to deficit units without financial institutions, there will be no meaningful intermediation process and no financial system. The financial system consist of various financial institutions, there will be no meaningful intermediations, operators and instruments for the mobilization of funds and at the fostering of economic growth and development of a nation. Whereas a financial system is a prime mover of economic developments, its ability to do this revolves round the institutions and the intermediation process. According to Christy (1977) the level of system development is the best indicator of general economic development potential of a nation.
Small business development is an important area in Nigeria economic which has not received the type of attention it deserves. In different countries of the world, the European and Asia, small scale business plays important role in the economic development.
In Nigeria today, small scale business provides employment to a large proportion of population.
Business can be defined as all profits directed economic and commercial activities that provide goods and service necessary to a nations prospective, it may be seen, involves organized activity and nothing happens through chance various business public or private exist in the country. Some of the businesses are on a small while others are on a large scale. These businesses include agriculture, manufacturing, service industries, trading, exports, imports and distributive business to mention but few. Small scale business on the other hand could be defined according to federal ministry of industries as a manufacturing, process or services enterprise whose capital investment does not exceed N250,000 in machinery and equipment only.
Practically, these businesses have been contributing towards the sustenance and buoyancy of the country. Using the role the commercial banks will play in the financial of small scale business and the economy is what the research is set to examine.

1.2 STATEMENT OF THE PROBLEM
It has observed that lack of finance coupled with poor management has dealt a big blow on the survival or development of small which are established in Nigeria do not live beyond their year of commencement due to poor financial management and lack of finance. As a result, the nation’s economic growth has suffered a serious setback since small business plays complementary role in the economic development of the nation.
In view of these problems, this research topic is designed to examine these financial problems and the ways by which commercial banks assist in alleviating this problems of finance posing a big barrier for the small business development with a particular reference to First Bank Plc Owerri.
Sa the pivot of this study, the researcher is interested in finding out the supposed role of this commercial bank as a catalyst interest rate, and the extent it has helped in providing adequate finance for the small business in Nigeria.
The under listed problems go a long way to hamper their prospects in receiving adequate finance from commercial banks.
The problems are:
Management inefficiencies, absence of viable feasibility study to their project before seeking for loan, under capitalization and difficulties in obtaining loans from financial institutions.
Misapplication of loan and the default in repayment of such loan borrowed.

1.3 PURPOSE OF THE STUDY
This research project seeks to achieve the following purposes or objectives:
1. To determine the various types of financial institutions in Nigeria.
2. To evaluate the role of financial institutions as a catalysts for small business development.
3. To determine the type of small business in Nigeria.
4. To evaluate the problems of small business development and the problem of financial institutions in assisting small business.

1.4 RESEARCH QUESTIONS
1. Does a financial institution contribute to small business development?
2. What role do financial institutions play that serves as a catalyst for small business development?
3. Is there any factor that militates against the assistance of financial institution to small business enterprise?
4. These problem or factors can they be averted?
5. Does financial institution assist small business financially only?

1.5 RESEARCH HYPOTHESIS
Ho: Financial institution does not contribute to small business development.
Hi: Financial institution contributes to small business development.
Ho: Financial institutions do not assist small business financially only.
Hi: Financial institutions assist small business financially only.

1.6 SIGNIFICANCE OF THE STUDY
A small business enterprise plays a significant role in the economic development of a nation especially in Nigeria.
Here, so many people will benefit from this research work in so many ways. Owners of small business will find this study as it will expose them to consequences of not taking cognizance certain environment factors which affect small business development.
Obviously, this study will be useful to researchers and students especially in the literature review who do future research.
This study will important to the employers and employees of the private sectors of any economy through findings solutions to the numerous issues that have impeded the development of small scale businesses.
Lastly to organization, workers and subordinate, this research work will give them the insight of borrowing for business expansion.

1.7 SCOPE OF THE STUDY
The research is basically concerned with the role of financial institution play in small business developing. Mainly the commercial banks like First Bank Plc, Owerri. This study covers also the evaluation of the role of First Bank Plc in financing small business enterprises in Nigeria.

1.8 LIMITATIONS OF THE STUDY
However, the researcher encountered so many problems during the research work. A time constraint was the major problem that omitted this work. Also lack of finances posed another barrier from the researcher in obtaining the necessary materials and data needed for this work.
More so, the tendency of the respondent to hear information need for this study posed another problem. There was exhibition of like warm attitude from the respondents especially from the respondents from the bank’s officials at the fort contact.
Again the time available to carry out this topic was extremely short and insufficient, coupled with other academic commitment, the writer view this long essay as being limited by time. These limitations notwithstanding, the researcher through his consented effort has endeavour to produce a research work which he hoped would not only meet the academic requirement, but also satisfy every interested party.
Lastly, lack of materials such as books and journals hindered the researcher from making more findings.

1.9 DEFINITION OF TERMS
1. Management: This could be defined as the process of planning, organizing, controlling, coordinating, leading and directing organization resources to achieve stated organizational goals.
2. Small Scale Business: These are those business in which its sales turnover do not exceed N500,000.
3. Small Scale Administration: A federal agency established in 1853 solely to advice and assists the nation’s small scale business.
4. Commercial Bank: An organization chartered either by the comptroller of the currency and known as a national bank or chartered by the state in which it will conduct the business of banking.
5. Financial Intermediaries: In spite of competitors for mortgage institutions, insurance companies and other financial institutions, banks are still the major financial intermediaries in Nigeria for the following obvious reasons.
6. Borrower: A person or an organization that borrows money especially from a bank.
7. Fund: An amount of money that has been made available for a particular purpose.
8. Mobilize: To work together in order to achieve a particular aim to organize a group of people to do things. The union against the cuts.
9. Financial: Connect with money and finance financial services insinuations to give financial advice, assistance, support to be in financial difficulties, an independent financial adviser.
10. Institution: A very short period of time, a moment.

1.10 BRIEF PROFILE OF ORGANIZATION
The Federal Polytechnic Nekede, Owerri Library was established by Edict No. 16 1978. It was known as the College of Technology Owerri. The college started in a temporary site at the Government Technical College Owerri. The chief Librarian of the College of Technology was appointed in March 1978 and the school opened for its classes on 15th December 1978. The school was moved to its permanent site on November 1980.
In June 1988, the name of school was changed from College of Technology to Polytechnic in line with the federal government order on renaming of the College of Technology.
On 7th of April 1993, the school was finally taken over by the federal government and assumed its present named as Federal Polytechnic Nekede, Owerri.
The collection of the library in 1980 was housed in one of the departments of the school of engineering blocks and later was moved to the classroom complex in January has not been built until 1998 when the foundation store was laid by the NBTE chairman, Dr. Abdullah, the library building was completed in the year 2000 and commence its services in 2001.
Presently, this library has a total number of twenty five (25) staff i.e. professionals, 14 paraprofessionals, 2 non-professionals, 5 support staff and 2 security guards.
Its stock at present stands was about 28, 25 books and 1,026 journals. Services undertaken by the library in the present time include readers, advisory answers to reference questions, reading books, teaching service in respect to research methodology (project documents including informal current awareness services).
The Federal Polytechnic Nekede, Owerri library is facing a great accommodation problem, which necessitated the current project of electing a purpose built floor library.
This library has the following sections:
a. The administration section which exercise general control over all library staff, funds, equipments etc. this also accompanies office of the chief librarian and his deputy.
b. Technical services division comprising of (i) acquisition section which is responsible for the section, ordering, recording and assessing of all library book and non book materials, (ii) cataloguing and classification section which is responsible for cataloguing and classifying materials acquired in the library.
c. Readers services consisting of circulations section which is responsible for the display, use and the actual circulation of library materials, (i) serials and documents section is responsible for the acquisition, recording custody and display of all periodicals. Monographic, newspapers etc in the library, (ii) reference and research section house all reference materials such as encyclopedia, dictionaries, handbooks, yearbooks and all reference materials for research purpose.
d. Binding and reprographic Unit: each of these sections has its own entrance. All these entrances are supervised by only one security stand that has the added responsibilities of the safe custody of student’s bags and library materials.
The major aims of the library are:
– To assist in meeting the set objectives of the Polytechnic Nekede As were provided in the institution established it.
– To provide all the information needs of staff students and lecturers.
– To act as the college custodian of information to serve as further training ground for studies in the depth of library and information science.
– To act as a centre for research for staff, students and lecturers inclusively.
Currently, the library has a total book stock of 16,000 and staff strength of 27, i.e. 3 professionals, 2 paraprofessionals and 22 junior staff but today they are more than all these.