Title page




Table of content


1.1 Introduction

1.2 Statement of problem

1.3 Aims and Objectives of the study

1.4 Significance of the study

1.5 Scope of the study

1.6 Limitations and constraints to the study.


2.1 Concept of small – scale business

2.2 Characteristics of small – scale businesses.

2.3 Concept of finance

2.4 Types of finance

2.5 Financial needs of small-scale business


3.1 Research population and sample

3.2 Research design

3.3 Instrument of data collection

3.4 Administration of instruments

3.5 Method of data analysis


4.1 Brief History of Diamond Bank, plc

4.2 Functions of diamond Bank

4.3 Requirements for small business finance by diamond bank.

4.4 Types of finance given to small business by the bank.

4.5 Advantages of the Loans to the businesses

4.6 Problems associated with the loans


5.1 Summary of findings

5.2 Conclusions

5.3 Recommendations




Nigeria has always been a strategic country in Africa with their enormous economic and political power. Unfortunately, a history of prolong military rule left the nations civil institutions in run. The economy grossly mismanaged, and individual values completely misplaced thus preventing Nigeria from attaining it’s full potential. Consequently, due to this uncertainty, quite a number of investors have been way of doing business in Nigeria and with Nigerians. With the successful transition to civil rule in 1999, the cloud of uncertainty cleared up a bit and in 2003 when the sustainability of it’s democracy was tested, a significant number of investors are expected to be interested in investing in the Nigeria economy.

As a part of its strategies to revive the economy and uplift the standard of living of Nigerians, the government has identified sector within the economy with potential for rapid growth. One of such sectoral strategies in the development of small scale business (SSB) are known to encourage people centered development, which helps in alleviating poverty, vereating wealth and employment, and stemming rural – urban drift. However, without finance, SSB cannot be a reality. To alleviate this problem of finance the federal government of Nigeria – set up a number of development Banks.


The purpose of this research is related to the financing SSB S.S.B is a global concept that can be seen from different points of view depending on the angle from where it is been considered, either from the developed or developing countries. The problems that are inherent with S.S.B depends mainly either in the government of such a country where it is been managed or the entrepreneur that a country where it is been managed or the entrepreneur that is managing such an enterprise.

For the growth and development SSB, it can be enhanced by the government through the schemes that has been put in place as it had been in Nigeria in general and in delta state in particular. But there are some problems that equally hinder this growth and development of SSB, especially with reference to finance, and these among where are the reason for this research. These problems include.


The objective of these study is to acquaint and potential SSB with the sources of funds available and problems arising from the establishment and growth of SSB in Nigeria and particularly in rural areas and to offer possible means of ensuring efficient use of these funds so that SSB can grow rapidly.

Some of objectives of this research are:

i. To help those already in business to expand through better means of financing.

ii. To appraising that efforts of Diamond Bank in terms of financing.

iii. To examine the ways and manners through which working capital funds are raised and managed for the operation of the enterprise.

iv. To appraise the effort of diamond Bank in term of financing.


The outlay of this study is important because, at this state of development, the government of Nigeria is currently placing emphasis on the development of SSB, since it has been discovered to posses the likely solution to the rural – urban drift of her citizens.

The study shall particularly probe into sources of fund to SSB in Delta state with Isoko North Local Government in View.


Small scale business is fairly wide in scope, but in this study, we will take a look at it from the Nigerian perspective and how it affects the populace area of study.

The study also covers the activities of diamond bank plc regarding SSB expansion in Nigeria (Take a look at various form and sources of business finance including the procedures for obtaining loans and in the future prospect of finding SSB in our society despite the associated problem).


It is assumed that this research work has been carried out before. As a result, website were consulted, textbooks, annual reports, seminars, workshops and conference materials which discussed the relevance of financing small and medium enterprises were also consulted.

Because this study was done intermittently with lecturers, examination and private study limited time was at my disposal for carrying but this study.

However, as the researcher I will put in the best of my knowledge and understanding to capture and unravel the main purpose and objectives of this study.



This research is summarized in five chapters. Chapter one focused on the introductory part of the research, which includes introduction, statement of problem, Aims and objectives of the study, significance of the study, scope of the study and limitations and constraints to the study, The second chapter focused on a review if related literature, concept of small – scale business SSB, characteristics of small – scale business, concept of finance, types of finance and financial needs of small – scale business chapter three focused on the research methodology. Chapter four focused on the data presentation and analysis, Brief history of Diamond bank plc, functions of diamond bank, requirements for small business finance by diamond bank, types of finance seven to small business by the bank, advantages of the bank loans to the business and bank, advantages of the bank loans to the business and problems associated with the loans.

Chapter five contains the summary of the whole research conclusions and recommendation.


The research was on financing small – scale businesses, in Nigeria with particular reference to operators of S.S.B in Nigeria.

S.S.B in general is found to be operated as sole proprietorship in this research, and some others as partnership and this does, not give room for expansion as the death of the owner in most cases as the end of such business.

Furthermore, because of the nature in which they are operated, their source of finance is usually very small and usually from personal saving and loans obtained from fruits and relatives.

The research also discovered that though the operators of S.S.B in Nigeria has felt the need to expand, they on intend to do so through the plugging back of profit made from borrowings. Though they are aware of bank loans and other government schemes, they do not give it much evidence, chiefly because of the negative outcome they have experienced t one time or the other.

A handful of the operators of S.S.B in Nigeria are also un-educated and uniformed and as result, still experience the problem of how S.S.B can be financed from maximum production. Based on the above stated conclusion, the researcher will want to make the following recommendation.


The researcher strongly believes that if the outlined recommendations are worked upon by the government agencies, banks institutions and the operators of S.S.B, financing S.S.B in Nigeria, will be lot easier and more productivity will be achieved.

i. The government, stock exchange and financial institutions should be actively involved in educating S.S.B promoters of the various sources of finance (especially equity type) and benefits accruable from these sources through seminars, conferences and workshops.

ii. Banks should be involved in providing venture capital to S.S.B they should also be involved in building such enterprises from “Cradle to consiomerates”.

Contemporary framework whereby banks exercise non challant attitude to trouble enterprises and are only interested, in appointing, receiver when such business failed should be modified. Rather banks should be interested in bailing out such enterprises by injecting capital to help restore management, problems.

iii. The classification of S.S.B by type, viz: manufacturing, commercial, and services should be made use of as a form of ranking in credit allocation. For instance, the manufacturing section should be given priority in credit allocation. This could be followed by services (technical artisans and others) and commercial activities.

iv. Existing S.S.B and indigenous small manufacturing concerns, with high growth potential (soap making, paper, cello phone bases, kernel crusting firm etc) should break away from present egocentric oviculation of smallness by seeking quotation on the second tier security market thereby requiring potential benefits arising from increased capital and listing. Entrepreneurs of small firm with slow growth rate would have to improve their performance before seeking to be listed.

v. Financial institution that deals with S.S.B should re-assess the variable by which they attempt to judge the credit worthiness of the enterprises. These institutions must reorganize that rigid organizational structure in S.S.B of about 100 employees could be handicap rather than an asset.

vi. Industrial development  which was originally, set in 1961 for the purpose of the promotion of S.S.B in Nigeria should organize special follow – up training programme for entrepreneurs that will enhance performance.

vii. Small and medium industrial development agency, (SMIDA) which was formed to coordinate the development of the S.S.B sectors should map out relevant training for S.S.B along technical accounting, legal, managerial and marketing line.

The government should give a wider publicity or the small scale industrial credit scheme. More so, all the bureaucratic laws surrounding the scheme should be uplifted to encourage patronage by S.S.B operators.



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