The concept “small scale enterprise” has been defined in many ways by many authors or scholars to suite their environment and thinking. Small-scale enterprise has contributed enormously to the development of Nigeria economy via employment generation, income creation, and poverty reduction. Of course, this can be seen in the number of effort made by the government to develop this sector.

   The topic “problem and prospects of financing small-scale enterprises in Nigeria” has been thought for concern for most researchers in our country. This is not only because small-scale enterprise have a lot to offer to our society or the inaccessibility of the small-scale enterprises to acquire resources to operates upon, but because the mechanism of operations employed by them is subjected to the influence of the market.
Notable among the writers is Drucker (1977.p.6), who stated in his work that in every developing country, except those in which government totally owns, runs and controls in the economy, small business have proven themselves to be a major vehicle of development and the engine of social and economic growth.
According to Scholder(1998), collaborated Druckers view, he believes that small business can offer a good solution to the twin problem of a pressing need for higher and increasing employment. The above fact portrays the importance of the survival of small business in the content of national development.
    In general terms, the meaning of small-scale enterprises varies from country to
country, enterprise to enterprise as well as financial institution to another. There have been attempts by many authors to define small-scale enterprises in terms of employments, asset and value or money sales volume, though the definition has proven unsatisfactory in some respect. This irresolution stems largely from the averse character of varying enterprises to the cost of project which is used as an interior or parameters, price inflation may render the definition meaningless in the short term. If, however, the number of employees is used as a yard stick, the definition would tend to ignored the fact that some firms are purely capital intensive and therefore need few employees; their sales turnover and profit may be relatively high or the need for a large number of employees may not really be called for and such firms may still have fantastic year billings, Aladekomo (2003;p.2).
The committee for Economic Development (CED) in the United States, considered a business to be a small-scale when at least two of the following characterics prevail.
(a)           The business operation is local (though a market is not to be local).
(b)            Size within the enterprises is relatively small (that is, the business is small when compared with the biggest unit)
(c)            Individual owners or a small group furnishes capital.
From the above features we can summarize by saying that a small business is the one that is managed and controlled by its owners, highly personalized, largely local in its area of operation, it is relatively small in size within the enterprises and largely dependent on internal sources for capital to finance its growth. Most of these features give rise to most of the problems faced by small business and their needs in Nigeria.
  The central Bank of Nigeria in February 1998, came up with a definition of small-scale enterprises, it states that for the lending purpose of merchant banks, a small-scale enterprises is one with a labour size of 11-100 workers or a total cost of not more than N50 million including working capital but excluding the cost of land, while commercial Banks on their own view, states that a small-scale enterprise is one with an annual turnover not exceeding N500, 000.
The centre for industrial Research and Development (CIRD),Obafemi Awolowo University defines small scale enterprises as a business which  as a business which total investment capital will not exceed N250000 and employees should not more than 50 full time workers.
According to Obiaguzor (2001), small-scale enterprises is defined as an establishment whose annual turnover should not exceed N500000 and also a dominant form of business enterprises in any economy whether developed or developing. He also opined that small-scale enterprises play an important role in the economic development of most countries of the world. But unfortunately, small-scale business has not been accorded the respect and the necessary financial and other support they deserve to make them grow. He was also of the view that financial institutions that have been established to grant loan to small scale enterprises have not yielded fruits, as result of fear by the lending institution which emanate from the perceived inability of the small-scale business to re-pay.
The Nigeria industrial development bank classified small-scale enterprises with cost(investment and working capital) not exceeding N750000. The federal government interest and recognition of small-scale enterprises is now well articulated. The major criteria set throughout the work for describing small scale enterprises is the enterprises average i.e. any enterprises average, such criteria may include;
a.               Types of enterprises
b.               Types of ownership
c.               Initial capital outlay not more than N50,000,000
d.               Financial strength
e.               Relative size
f.                Number of employees from 11-100
g.               Volume and value of sales.
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