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  1. Introduction
    1. Importance  of the study
    1. Scope  of study
    1. Research methodology
    1. Hypothesis
    1. Theoretical  concept and it  characteristic


2.1    Background of  information

2.2    Location analysis  of  small   scale  industries

2.3    Governmental roles  in development  of small  scale industries 

2.4    Source of finance

2.5    Eligibility of small scale industries  to government   loan

2.6    process involved  in obtaining financial   assistance  CHAPTER  THREE:  DATE COLLECTION  AND ANALYSIS

3.1    Questionnaire  TECHNIQUES

3.2    Secondary data

3.3    Testing hypothesis


4.1   Impact of small scales industries  in economic  development  of  kwara state .

4.2    Problem and prospect of small scale industries in kwara state.


Recommendation and conclusion

5.1    Recommendation

5.2    Conclusion

5.3    Reference



         One of the prominent features of the economic structure of most developing countries are the small side contribution to government development plan made by industrial sector. Consequently, many of those countries are presently faced with problem of formulating and implementing a well conceived programmed a industrial development plan that will reverse the unfortunate trend ensuring that this dream of a perfect, integrate and consistent patter of industrialization is achieved, such storage must be appropriate to these countries condition and levels of development. it is in this line that small seek industry has been recommended to fill the gap.

         The theme of this study is financial problem facing small scale industries is kwara state. The study aims at throwing more light on the basic problem facing small scale industries which is relevant to the Nigeria economy and by viewing the available source of finance in some small scale industries in kwara state.

         More over, the present economic situation in the country calls for serious attention to be paid to diversification. A situation where a country depends mainly on a single product for the foreign exchange earning is dangerious. Hence, any effort to develop the impact substituting industries should be encouraged small industries present an opportunity for the country to provide locally and therefore limit to a considerable extent the drain on our foreign exchange.

         Lastly, any measure for developing the rural urban migration should pay a greater attention to the public and development of the small scale industries.


         It could be right to also why the research the study important.

         The importance of the study originated from the single fact that finance is the life wire of any business. It can be looked at as the ability to purchase things. Finance is sued by a business in its operation just as much as labour and materials purchasing power can transfer from one person to another by lending of money and can thus, be supplied to business of a price just as physical goods and services of labour. Like market and labour finance should be bought in the favorable market and used in the most effective and economical ways

         Also the important of small scale industries is better evaluated  against the background of the objective laid up for it in peculiar circumstances prevailing in various countries of the world especially it’s contribution towards removal of bottlenecks and other inhibition of industrial growth). Among it’s very grant importance is it’s contribution toward removal of indigenous entrepreneur initiative for modern industrial development as emerging industrialist build up their potential in the small scale industries for the greater task of industrial management.

         The prevalent problems of shortage of funds skilled labour is steamed through the encouragement and establishment of industries requiring affordable capital and skilled labour of small scale industries.

         The problem of limited market is involved through localization of production centers is primary market area. The income and therefore effective demand of the people is increased through increased employment for the rural labour force.

         Furthermore, the scheme permits special earliest facilities to be find the establishment that have nothing to attract the instructional credit agencies and these facilities the acquisition of machinery raw material factory accommodation as well as encouraging manpower training.

         Also, the inform, choice of ambitions industrialist in term of technology industry or product lines plant size equipment product process will be greatly reduced when they have personally experienced small specialize industries with requirements commitment and risk,.

         Management techniques are also advanced in the small scale industries to facilitate the growth of management and marketing potential of indigenous industrialists as to be able absorb demand change of the growing and complex society.

         Small businesses also pre-empty the used lack of knowledge on standard and appealing product designs that are common with small scale industrialist of developing countries.

         Lastly, fervently hope  that useful ideas would come out for investors on the source of finance and obtaining some when required.

1.3   SCOPE OF STUDY     

         As earlier mentioned the focus of this study was financial problem facing small scale industries in kwara state the research project examine and studies the related problem and prospects in the investment of small scale industries in kwara state with particular reference to Global soap and detergent industries ilorin located in Ilorin the state capital and as a barometer of activities of small scale industries in other divisional head quarter and in Nigeria at larger. This research work has therefore enunciated the back problem setting small scale industries in raising funds to finance its programme.

         More over, the questionnaires which have been distributed and filled deals with certain questions aimed to prove social background of the respondent as it can affect their business life. Other special questions deal with capitalization staff straight government role in is development, assistance needs and recommendations.

         Information have been collected from the ministry or trade and industry, kwara state investment corporations federal ministry of trade business registration units official sets.

         However in view of the fact that only fifty small scale industries have been served questionnaire all of which were located in ilorin township it was not possible to make a broad nation wide generalizations of the result obtained.


         The approach to this research consist of fold work questionnaire have been distribution to a randomly selected investor within the town and where some of the respondent cannot read and write the research has helped to fill the questionnaire on their behalf. After the questionnaire have been completed and returned to the researchers the data been transcribed into analysis data sheet and prepared for small scale industries.

The questionnaire had been divided into such a way that it had shown a section for personal information capitalization staff strength and a section dealing with problem of incorporation and useful suggestion for future development.

         Data were collected through personal interviewed journals text books business and daily newspaper financial reports by eminent personalities and periodicals.

1.5   Hypothesis

         Hypothesis can be defined as a tentative assumption made in order to draw out and text its logical and empirical consequences it can be denied as a position condition or principle which is assumed perhaps without behalf in order to draw out its logical consequences and by this method test its accord with facts which are known or may be deteremined. Four hypothesis were formulated to determined the factors responsible for poor investment in small scale industries.

i        Poor financial affect the success of small scale industries.

ii       Lack of credit facilities from banks and other financial institution affect the chance of success in small scale industries

iii      Poor management is largely responsible for the inability of the small scale industries to survive in the small scale industrial sector enjoy little patronage from the government.


         The definition of small scale industry concepts at any point in time could this is because the industrial covered by a university acceptable definition of small scale industry in any particular state or country no means definitive. As far as the industry of kwara state is concerned the term small scale industry has undergone a lot of revision through time. For example at the inception we used to refer to such industries concentration in the financial bracket of   N500. This   was later revisal to industries with invested capital of between N1000-N5000,000 to be given to small scale industries.

       Today, definition also permit the inclusion   of establishment employing up to fifty people. Nevertheless, it is regarded as feasible option to solve problem of industrial   development.  As a result of small scale industries have been assigned very important roles in economic developing countries.  The centre of   management  studies.  University  of   Netherlands. has  classified small scale industries into four groups, These are;

  1. Handicraft and cottage industries which are usually establishment employing up to nine person.
  2. Small scale industry which are establishment employing 10-99 person.
  3. Medium scale industry employing 100-249 person.
  4. Large scale industry employing  250 person or more.

         The same centre defined a small scale industry as an industry in which  managers personally perform all the functions of management without taking active part in the production. Since in almost all cases in establishment  employing below ten person, the manager or proprietor actually participates in production . Handicraft and cottage industries will be excluded from the centre are accepted.


Small scale industry is most often characterized by the managers being the owners.  Independent in this case means that it is independence from outside share holder control over management decision. The same manager or proprietor handles or supervises the financing production marketing and the personnel of the enterprises.

       Equity capital is supplied by an individual or group this places the small scale industries is contract to companies where equity stock are traded on stock  exchange .

         The manager or proprietor finds it difficult to borrow shot term   or long term capital  through  organizational financial  institution but relies heavily on  relations  money under personal savings or profit  of enterprises.

         The operations of  small scale  business  are  essential local, one  interpretation of this is  that the local may  varies  with  weather there is saves retailing  whole sailing or manufacturing . however, local usually means that the employee and owner live in the same general areas. For whole selling and manufacturing business particularly market may be else where but production of the warehouse function would usually be in one location. The industry closely integrated  with and meet only the immediate need of wider or distance market.

         The establishment is generally weak poorly equipped and relevant to request  or even accept assistance  for reason of ignorance prejudice or fear that  information about the enterprises might reach the  tax authorities or a near by competitor.

         The rate of failure is high because of the dominance of the sole proprietor. Although since it is relatively easy for single individual to start a small industry the replacement rate is not also high and the number of unit has a tendency to multiply.

         Little or no account of business cost and revenue is kept and the banking system is hardly utilized is kept and the banking system is hardly utilized the result is that banking facilities for business financing and expansion are exported to only few of the industrialist.

         The level of education of the proprietor is usually very low with a consequent low level of business management techniques skill and market information.