The Role of Government and Financial Institutions in Small and Medium Scale Enterprises in Nigeria

BABALOLA ADESOLA O., AYODELE, O. CHURCHILL AND USMAN, BABA U.

Department of Business Administration & Management, The Federal Polytechnic, Bida

E-mail: dessybjay@yahoo.com

ABSTRACT

Small and Medium Scale Enterprises constitute essential ingredients in the lubrication and development of any economy. In Nigeria, the story makes no remarkable difference as Small and Medium Scale Enterprises dominate the economy. Government over the years has formulated a number of policies aimed at developing Small and Medium Scale Enterprises. While most policies actually failed due to poor implementation, others however, succeeded. It is therefore the thrust of this paper to identify the role of government and other financial institutions particularly micro finance institutions in the development of small and medium scale enterprises in Nigeria. Relevant literatures were reviewed to bring out salient issues on the subject matter of this paper. The chief source of information for this write up is secondary method of data collection. It concludes that financial institutions provide the necessary financial lubricants that facilitate the development of Small and Medium Scale Enterprises, but, a lot still need to be done by the government in terms of policy formulation in order to complement the efforts of financial institutions. This paper recommends among others, further establishment of micro finance institutions to serve the grass root financial needs, sensitization of the general public on how to access funds for SMEs development, public private partnership should also be encouraged, the financial muscle of the financial institutions must be geared up to meet the financial need of SME5 in their respective locality.