Finance
can also be referred to as funds ;that is to say Finance
therefore is also branch of economics that funding for small scale
business can also be said to be a way of financing the small scale businesses. concerned with providing funds to
individuals, businesses, and governments. Finance allows these entities to use
credit instead of cash to purchase goods and invest in projects. For example,
an individual can borrow money from a bank to buy a home. An industrial firm
can raise money through investors to build a new factory. Governments can issue
bonds to raise money for projects.
Finance plays an important role in the economy. As banks, credit unions, and other financial institutions provide credit, they help expand the economy by directing funds from savers to borrowers. For example, a bank acquires large amounts of money from the deposits of individual savers. The bank does not let this money sit idle but instead provides loans to borrowers who might then build a house or expand a business. The savings of millions of people percolate through many financial institutions, spurring economic growth. Small scale business are business that individuals or group of persons can start with a small amount of money at times they are later able to get loans from banks to enable them expand the business.
We
can categories funding sources in terms of their conventional orientation,time
duration,and intra-ultra considerations.We see from the analysis thus far that
the business firm is best suited for the intra-ultra considerations which
covers the time duration classification as well.In view of their nature
classifying funding sources best applies to private households more than other
economic units.It is not that the other categorizations do not apply,esp when
we know that individuals can source funds through a number of internal and
external sources including,his personal savings and earnings,loans and
overdrafts from banks and other non-bank
institutions,sales of commercial papers and short term securities held,hire
purchase and leasing agreements,trade credits,receivables financing and bills
discounting.Other external sources may include disposal of assets and
property,sale of long term securities such as stocks and shares through the
activities of stock brokers.
Conventionally,the individual can source funds from the formal sources
mentioned above.Traditionally,he can obtain funds from the informal financial
system with sources including esusu,local money lenders,relatives and
friends,revolving credit arrangements,age-grade associations,extended family
credit arrangements, etc.
Tags:
SOURCES OF FUND FOR SMALL
SCALE BUSINESS IN NIGERIA GOVERNMENT ATTEMPTS TO BOOST SMALL SCALE BUSINESS IN NIGERIA. WHY SMALL SCALE BUSINESS FAIL
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