AN EVALUATION OF FINANCIAL PROBLEMS FACING SMALL SCALE INDUSTRIES
|BANKING AND FINANCE|
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One of the prominent features of the economic structure of most developing countries is the small side contribution to government development plan made by industrial sector. Consequently, many of those countries are presently faced with problem of formulating and implementing a well conceived programmed a industrial development plan that will reverse the unfortunate trend ensuring that this dream of a perfect, integrate and consistent patter of industrialization is achieved, such storage must be appropriate to these countries condition and levels of development.
It is in this line that small scale industry has been recommended to fill the gap.
The theme of this study is financial problem facing small scale industries is Kwara state.
The study aims at throwing more light on the basic problem facing small scale industries which is relevant to the Nigeria economy and by viewing the available source of finance in some small scale industries in Kwara state.
Moreover, the present economic situation in the country calls for serious attention to be paid to diversification.A situation where a country depends mainly on a single product for the foreign exchange earning is dangerous.
Hence, any effort to develop the impact substituting industries should be encouraged small industries present an opportunity for the country to provide locally and therefore limit to a considerable extent the drain on our foreign exchange.
Lastly, any measure for developing the rural urban migration should pay a greater attention to the public and development of the small scale industries.
1.2 IMPORTANCE OF SMALL SCALE INDUSTRIES
It could be right to also why the research the study important.
The importance of the study originated from the single fact that finance is the life wire of any business. It can be looked at as the ability to purchase things.
Finance is sued by a business in its operation just as much as labour and materials purchasing power can transfer from one person to another by lending of money and can thus, be supplied to business of a price just as physical goods and services of labour. Like market and labour finance should be bought in the favourable market and used in the most effective and economical ways
Also the important of small scale industries is better evaluated against the background of the objective laid up for it in peculiar circumstances prevailing in various countries of the world especially it’s contribution towards removal of bottlenecks and other inhibition of industrial growth). Among its very grant importance is its contribution toward removal of indigenous entrepreneur initiative for modern industrial development as emerging industrialist build up their potential in the small scale industries for the greater task of industrial management.
The prevalent problems of shortage of funds skilled labour is steamed through the encouragement and establishment of industries requiring affordable capital and skilled labour of small scale industries.
The problem of limited market is involved through localization of production centers is primary market area.
The income and therefore effective demand of the people is increased through increased employment for the rural labour force.
Furthermore, the scheme permits special earliest facilities to be given the establishment that have nothing to attract the instructional credit agencies and these facilities the acquisition of machinery raw material factory accommodation as well as encouraging manpower training.
Also, the inform, choice of ambitions industrialist in term of technology industry or product lines plant size equipment product process will be greatly reduced when they have personally experienced small specialize industries with requirements commitment and risk.
Management techniques are also advanced in the small scale industries to facilitate the growth of management and marketing potential of indigenous industrialists as to be able absorb demand change of the growing and complex society.
Small businesses also pre-empty the used lack of knowledge on standard and appealing product designs that are common with small scale industrialists of developing countries.
Lastly, fervently hope that useful ideas would come out for investors on the source of finance and obtaining some when required.
1.3 SCOPE OF THE STUDY
As earlier mentioned the focus of this study was financial problem facing small scale industries in Kwara state the research project examine and studies the related problem and prospects in the investment of small scale industries in Kwara state with particular reference to Global soap and detergent industries Ilorin located in Ilorin the state capital and as a barometer of activities of small scale industries in other divisional head quarter and in Nigeria at larger. This research work has therefore enunciated the back problem setting small scale industries in raising funds to finance its programme.
Moreover, the questionnaires which have been distributed and filled deals with certain questions aimed to prove social background of the respondent as it can affect their business life. Other special questions deal with capitalization staff straight government role in is development, assistance needs and recommendations.
Information have been collected from the ministry or trade and industry, Kwara state investment corporations federal ministry of trade business registration units official sets.
However in view of the fact that only fifty small scale industries have been served questionnaire all of which were located in Ilorin Township it was not possible to make a broad nationwide generalizations of the result obtained.
1.4 STATEMENT OF THE PROBLEM
The small scale industries are still faced with many problems which stand as obstacles to it rapid growth in Kwara state.
The factors which constitute the main obstacles to the industries growth may be categorized as management, technical, commercial and financials.
The management problem arises from the one stated ability of the manager/owner of the business or enterprises.
The problem of finding the right success or to him often his retirement or debt and the shortage or absence of staff/officer capable of advising him on management policies, this limited education and training and the rural and sub-urban nature of his functions allocation further deny him access to modern management limited technical and possibilities make the risk of lending money to small industries very high, in return the shortages of busies capital further aggravate the technical , commercial and managerial problems .
The managerial and technical problem facing the small scale industries in the state can be improved upon if not totally stopped by the assistance of small scale industrial credit scheme and industrial development centre by organizing training and service.
In conclusion with the industrial training find for various entrepreneur in the state so as to improved and open them to modern manage and technical training which participants of the services in their industries productivity , also , the traditional advice offered but the industrial development centre will also solve the managerial technical problems of the various in- industry list
The training and seminars can either be twice or thrice in a years.
The financial problems can actually be reveals even now that the federal government has reduces the interest on loan to small scale industries in the country which will now encourage many small scale industrialist to borrow for industrial development as well as reduce the bottle rock problem that usually discharge them from borrowing either to expand or set a new small scale industry.
Through the trade associations for small business government and government subsidized institution technical , financial as commercial information can be made available to the small scale industries.
In addition, banks and various other external advisers can help as much as possible to fill the gap in the management function and contributes to the quality of decision made and the production techniques adopted by these industries.
In conclusion, the small scale industrialist required a lot of encouragement from financial institution and government given the necessary of Intensive supervision by a body interested with control supervision of small scale industries. They can grow up and contribute immensely to the industrial and economic growth of the state and the whole country.
1.5 AIMS AND OBJECTIVES OF THE STUDY
a) The objectives of this project are primarily to find out the disastrous of financial problem facing small scale industries in our society (a case study of global soap and detergent industries asa-dam road Ilorin).
b) This project will help to discredit the wrong impression that financial problem facing small scale industries is restricted to the pages of textbook, newspaper, business journal and other relevant books. But contrary to general believes its existence is in practical terms on very obvious.
c) Consideration was given to business enterprises or sector, because I have carefully considered the nature of business, its role, relevance and importance in nation building of a country economic.
1.6 LIMITATIONS OF THE STUDY
Generally speaking in carrying out research on any study, cost must be very important without enough money at one’s disposal it will be very difficult to carry out effective research project. In our economy, education is with terms and average student find it difficult and to receive the sum of N6, 000.00 on project work as a result of this problem financial has limited the efforts of the research from going to various places in order to get some data for his project work.
More textbook and journal and not made available in the library.
The journal room is not open at the appropriate time for the student, books, that are in the library are outdated which can not give enough data for the researcher.
1.7 HISTORICAL BACKGROUND OF THE CASE STUDY
Global soap and detergent industry Nigeria limited, Ilorin, Kwara state is situated along Asa-dam industry layout in Ilorin town, the company is a limited liability company under the chairmanship/ managing director of Dr. Samuel Adedoyin.
The global soap industry was established in 1985 as a division of Doyin Group of Companies.
It was incorporated in 1984 as the first indigenous detergent industry.
The company has its head quarter in Lagos, production started at the company in December 1985.
The pioneering product lines of the company are flash detergent, Grant soap, Sash-rite detergent and Bar soap. Other products such as Hi-clean, scurrying powder, vogue soap were later added to existing ones.
The recently introduced ones were Super deal detergent and Dento clean.
Three years after the commencement, its brand was awarded with Nigeria institute of standard quality certificate in 1988 in recognition of the industry’s performance from the information given by one of the top management personnel about four reasons were given which added to the establishment of the company and particularly in Kwara state.
Firstly, that the proprietor is from Kwara state.
In establishing a company is the state, is to reduce the problem of unemployment in this state. Another reason for setting up of the company is for the profit object and its service as a source of capital market.
Also, the proprietor wishes to meet the demand for the citizens of the country in quality and quantity and is possible to extent its supply to other African sub-regions where the need for the product is inexistence.
Lastly, the monopoly being enjoyed by foreign investors like close-up by lever brothers makes of super blue. Omo is reduced to certain extent monopoly by going into the production of detergent. Because of the reason explained above. The proprietor wishes to produce or join other producers for soap and detergent making.