In view of the important of SMEs, government has been playing an appreciation role in promoting their survival and growth, various policies towards this has enunciated plan and the ongoing three year rolling plan, priority was accorded industrialization with emphasis on SMEs.


Thus, it has been stated that the panacea for solving the problem of stunted economic growth of developing countries often reside in the adequate funding and development of the small and Medium Scale enterprise (SMEs). Indeed the establishment of that industrial and economic development of such India, Malaysia, Pakistan and Indonesia to name just a few.


Analyst have therefore continued to posit that Nigeria will continue to remain in a state of underdevelopment unless concerted efforts are made to achieve growth in the SMEs because the lack of development in this sector has continued to keep the Nigerian economy in the woods. One of the major impediments to the growth and development of this sub-sector is lack of adequate finding.


The promotion of small and medium enterprises is cornerstone of economic policy for a large number of industrialization countries. Public support for small and medium enterprises appears to be based on the widely held perception that small business sector is an incubator of economic growth, a place where innovation takes place and new ideas become economically viable business enterprises (Craig, Jackson and Thompson, 2005).


In line with this, the role of small and medium scale enterprises in fosters economic development has been well articulate in different form of government policies. The specific attention on them is based on their expected impact and potential contribution as well as accelerative effort in achieving macro objectives pertaining to full employment of local technology. They also serve as catalyst for increase national productivity and a veritable launching pad into the world export market.


Giving an insight into the small and medium scale enterprises phenomenon, the Nigerian economy does not seem to have been able to reap the advantages obtainable from the SMEs in the past. In the same vein, these industries complain about neglect or lack of government interest in their quest for rapid growth and development. The existing lukewarm relationship is not in the best interest of the economy.


It is for these reasons that the Nigerian government started to show interest in the affairs of SMEs in the 1970s to the present. Some of the positive actions taken by the government Include providing funds for some research into these industries, creating small scale industries division or departments, as well as small scale credit schemes in various states and at the federal level and giving the subject a pride of place in national development plans to the 1970s and 1980s particularly 1981 - 1985 plan.


Hence, in view of the growing public interest and governments realization of the many advantages of SMEs, the government has made some policies and distinct pronouncement with regards to the operation and promoting the sector (both economically and monetary). The monetary measures include the establishment of financial institutions to provided finance to the sector. Banks were also required to provide a specified proportion of their available credit to indigenous borrowers with particular emphasis to SMEs. In addition, various financial intermediaries were established: by monetary authorities to provide incentives to these growing industries and business with the specific purpose of aiding them financing managing business problems.


In line with the above statements, it is obvious that the study of this nature cannot be overemphasized because of the new look of the Nigerian banks and other financial institutions in providing the needed funds to small and medium scale enterprises.