ABSTRACT
This research work evaluates the sources of finance for small scale entrepreneurship development
in Kogi and Benue State of Nigeria. Entrepreneurs in Kogi and Benue State who are duly
registered by the Ministry of Commerce and Industry and recognized by Kogi State Chambers of
Commerce and Industry and its Benue State Counterpart were used in the study. The specific
objectives of the study are: to determine the extent to which small scale entrepreneurs utilize the
sources of finance available to them; to access the extent to which stringent requirements by
financial institutions affect the accessibility of funds by small scale entrepreneurs; to find out how
small scale entrepreneurs suffers discrimination from financial institutions in their quest for credit
facilities; to determine the effectiveness of government policy towards the financing of small
scale entrepreneurship development in Nigeria. The study x-rayed various sources of finance
available to entrepreneur in the course of carrying out his business activities including the review
of past works on the subject.
Attempts were made to test four hypotheses; viz: Small Scale
Entrepreneurs to a large extent do not effectively utilize the sources of finance available to them;
Stringent requirement by financial institutions do not affect accessibility of funds for small scale
entrepreneurship development; small scale entrepreneurs do not suffer discrimination from
financial institutions in their quest for credit facilities; and Government policies towards small
scale entrepreneurship development effort has not been effective. Both primary and secondary
data were utilized for the study. In addition the researcher ensured that the descriptive research
approach was employed. The researcher worked with the population of 2,149 staff of
entrepreneurial firm in Kogi and Benue States. Oral interview were also conducted among the
management of specialized financial institutions. A combination of Analysis of Variance
(ANOVA) and non parametric test of Chi-Square were used to test the hypothesis formulated for
the study set at alpha level of 5%. The findings of the study revealed that small scale
entrepreneurs do not effectively utilize the sources of finance available to them; that stringent
requirements by financial institutions do not affect accessibility of funds for small scale
entrepreneurship development effort among others. It is therefore suggested that financial
institutions especially bankers be encouraged by CBN by way of minimum credit allocation to
give long term credit to SSEs, this is because the short credit given SSEs will not facilitate
growth.
This is the surest means of facilitating growth and development in the economy.
Secondly, small scale entrepreneur association be formed where there are none, the formation of
such association should facilitate easy access of SSEs to credit facilities without much ado about
collateral security. The association will in a way guarantee and monitor members as per their
credit obligation in order to alleviate the fear of repayment. The Federal Government should set
up a credit guarantee scheme to alleviate fear of financial institutions granting long term credit
facilities to SSEs because of the risks involved.
