COMMERCIAL BANK LENDING TO SMALL AND MEDIUM SCALE ENTERPRISES (A CASE STUDY OF UNION BANK OF NIGERIA PLC, ENUGU)

ABSTRACT

 

Various criteria had been used to define small and medium scale enterprises in different countries of the world.  In Nigeria, small and medium scale enterprises are defined as those in the industrial sector, which exclude general commerce, whose total capital investment does not exceed N2.5 million (including land and working capital or whose maximum turnover is N12.5 million annually).

These enterprises are very essential and important for the economic development of any economy.  They serve as sources of raw materials for the large-scale enterprises, channel of employment and for rural development.  As a result, the monetary authorities through the Central Bank of Nigeria (C.B.N.) credit guideline directed the commercial banks to give a certain percentage of their total assets to the small and medium scale enterprises as credit.

The project aims at examining the extent the commercial bank have completed with the guideline in providing credit to the small and medium scale enterprises, if they have complied, how adequate are the financial assistance and what the impediments on their way are.  At the end suggestions will be made for improving or increasing credit facilities to the sector.

The main source of material of this project is primary sources such as interviews.

Data analysis does not go into statistical theorems and methods but based on simple comprise and percentages.

Bases on the analysis, finding emerged, recommendations for improvement of credit faculties to the small and medium scale enterprises made and finally conclusion drawn.

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