The banking sector tends to be lukewarm in meeting the
credit requirements of the small-scale enterprises. This is because of
inadequate prepared project proposal, incomplete financial documentation and
inadequate collateral including the inability to raise the required equity
contribution by the small-scale enterprises.
As a result, working capital is
still a major constraint on production; more worrisome is the inability of the
small-scale enterprises to tap available finance from the Capital Market. This
has been attributed to their aversion to disclosure and ownership dilution,
although some blamed this phenomenon on the cumbersome requirements and
procedure for listing on the stock exchange.
SHORTAGE OF SKILL
Inadequate financial resources as
well as desire to operate with limited openness on the part of proprietors lead
many small-scale enterprises to employ semi-skilled or unskilled labour.