It is a fact that capital constitutes a major bone in the rapid growth and development of small-scale industry in Nigeria. The importance of capital in any business setting can not be over stretched. Financing generally appears to be a crucial issue in determining whether a business should be set up, or other words, as stated earlier, Business does not require finance for it initial take-off but also need adequate funds to operate and expand effectively.
            Hence, the issue of finance and its adequacy are major areas of concern to any entrepreneur. Generally, the sources of finance open to small-scale business Include: owners capital, financial institutions, government, non-banking institutions and other sources: Akabueze (2002.p-23).
1.      OWNER’S CAPITAL: This is perhaps the most important source of finance to most small-scale enterprises in Nigeria. Generally, the capital used in this business is money gotten  from personal savings of the owner or members of the same family who came together to donate money to state up a business. About 97% of the total money use to finance a small-scale business come from this source in Nigeria, while it is estimated that between 60% and 75% in Sirraleone and averages about 65% in some parts of India. Several reason could be advanced for the source available to small-scale enterprises.
The major reasons is that small-scale business do not have access to the capital market, even with the recent introduction of the second-tier securities market by the Nigeria Stock Exchange, it is still obyious that many small-scale business will be unable to meet up with the requirement needed to collect loans.
Another reasons why the owners capital donates other sources of finance to small-scale enterprises is the fact that savings do not require any formalities or bottlenecks, before it would be used in financing small-scale business. In other words, the case with which the decision to raise this sort of finance and the speed at which such decision would be executed makes personal savings or owners capital indisputable because it is the most popular and attractive source of finance to small-scale enterprises.
2.      FINANCIAL INSTITUTION: The financial institution comparises of commercial banks, merchant bank insurance companies and development banks. Their roles in providing financing assistants to small-scale enterprises has been critized  by experts.

            Commercial and merchant banks can provide wide range of financial assistance to small-scale enterprises such as monetary loan to facilitate their projects, Financing collateral security for mortgage loans. Demand deposits, acting as stock brokers, executors as well as providing references to small-scale business to obtain credit from other organizations. In addition, this financial institutions can manage funds for small-scale enterprises and provide them investment counseling and advice, obvious areas of need which most financial institutions have neglected include export promotion marketing, managerial and technical assistance.
3.         GOVERNMENT SOURCE: Apart from the bottleneck red-tap associated with government sources, Osoba (1978) noted that the federal government financial assistance to this sector (small-scale enterprises) through Nigerian Bank for commerce and industrial (MBCI) is far from enough. Considering the problems associate with security government finance (bottleneck, bribering and favoritism) small-scale enterprises recommended the establishment of a special bank (as already existing for agricultural development) to cater for the varying need of small-scale enterprises.
            As a solution to collateral requirements of commercial banks, he suggested that the government should guarantee such as it is with agriculture. The government should also establish an insurance company similar to that of agricultural sector for the purpose of insuring small-scale enterprises manageable risk.
4.         NON-BANKING FINANCIAL INSTITUTIONS: The prominent member of this group whose main purpose of creation is to assist small-scale business is the National Directorate of Employment (NDE) there are mere to grant loans, mostly to young school leavers and graduates with the aim of setting them up in life. Another one in this group is the hire purchase by companies; they give out subsidies of their company products on installmental basses e.g. of such companies are the New Nigerian Development Company, the National Economic Reconstruction Funds, which has so far given out loans to help set up small-scale business, there have given about N12 billion for about 373 projects.
5.         OTHER SOURCES: This includes loans gotten from friends, relations and family members. The trade creditor can also give out loan though with expected returns, discount companies are also part of this group, since they give case discount to small-scale enterprises.
            The problem of capital security in the operations of small-scale enterprises has been a major obstacles to the development of industrial sectors and this explains why government financial assistance has been manly directed towards this direction. In recent times, the government has devoted a lot of financial resources to this secret in order to liberate the entrepreneurial skill of Nigeria. The Nigeria Bank for Commerce and Industry (NBCI) through loan and equity participation, finance business start ups and expands the business with emphasis on manufacturing and service oriented small-scale and medium-scale firms since 1980.
            In 1989, National Economic Reconstruction Fund (NERFUND) was established by degree two to correct the short fall in the provision of fund to small and medium-scale enterprises. By September, 1990, the fund had been able to mobilize N5.6 billion in domestic and foreign currencies for lending the local enterprises (since 1986) another important government programmes for small-scale business sectors is Small And Medium Scale Enterprises Loan Facilitating (SMELE) design to boost finance to the sector. Its total fund base in put at N415.8 million.
with three credit components. These consultancy, training and working capital needed for the establishment for the establishment of new small-scale business and expanding existing ones, pilot credit guarantee schemes and equipment and leasing funds to consist small-scale enterprises that are undercapitalized. In the same way, the credit guarantee scheme is expected to be funded by the three levels of government in Nigeria, the Central Bank and NERFUND.
            Another is the establishment of micro-finance to assist the small-scale enterprises, though such banks have been established as planned but the outcome is not encouraging, the banks are not carrying out their duties as expected, in the sense that those who truly needs the assistance are not the ones which the loan is given to and also the producers involved in collecting loans is not easy as most of the owners of such businesses are not learned. Small-scale enterprises can be financed through debt capital which can be raised from various sources; it includes banks such as commercial banks, merchant and development banks, private financial institutions and other financial intermediaries of various instructions. In addition, financial assistance is also contained in the monetary and credit guide lines which vary from year to year depending on the basic aim of increasing loan facilities to the sector at considered rates. Fiscal policy measures such as pioneer status, import tax relief, import duty relief, capital’s depreciation allowance and other forms or tariff measures have been put in place to create assistance or aids as budgetary measures, Ochejele (1992).
            Federal government active participation in promoting small-scale enterprises is also traceable to the establishment of Industrial Development Centre (IDC). Essentially, Industrial Development Centers are aimed at providing extension of loan application, training of entrepreneurs, managerial assistance product development, product planning and control and other extension services. Apart from the Owerri Industrial Development, other Industrial Development Centre have been initiated at Zaria, Kano, Port-Harcourt, Oyo, Ikorodu, Benin, Oshogbo, Bauchi, Kano and Abeokuta, thus over the years the government has provide an array of assistance to enhance the operation of the small-scale enterprises in Nigeria, Oyewande (1991).
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