1.1 BACKGROUND OF THE STUDY
The Nigeria economy appears to have been reaping the advantages obtainable from Small Scale Enterprises. These include stimulation of indigenous entrepreneurship, transformation of traditional industry, e.tc. The experiences in many parts of the world point to the direction that Small Scale Enterprises can make positive impact on the economies of many nations both developed and developing.
It is for this reason that the government of Nigeria (Federal and State) started showing interest in Small Scale Industries (SSIs) from the 70s to date some of the positive actions taken by government in this regard include providing funds for some form of research into these industries, creating SSI divisions or departments as well as small scale credit schemes in the various states and at the federal level.
The implementation of the programmes that have been outlined for the development of the Small Scale Industries in the past have often been hampered by the lack of information concerning the industries, most especially with the constraints to their development, what and what motivates them, their economic contributions and so on. Hence, the need for adequate research into them to provide the basic data for planning effectively for them. Detailed and extensive nationwide research on these industries in Nigeria have generally been lacking until the pioneering work of the Industrial Research Unit of the University of Ife, now Obafemi Awolowo University Ife in the early 1970s.
The first in the series of surveys carried out by the Ife unit on SSIs, covered the then Western States, Kwara State and former mid western state. A survey of SSIs in the former north eastern states was also carried out by the unit. The University of Zaria now Ahmadu Bello University Zaria, also carried out similar studies in the remaining states of the country at that time.
The objectives of those studies were similar and were meant to study and analyze the structures of the SSIs, the pattern of ownership management and control in the SSIs as well as the size of employment, marketing procedures, level of education and training in the industries, the studies also sought to examine the extension services available to the industries and the impact of public policies on their general performance.
Also, after 1970s, the number of Microfinance Institutions (MFIs) around the world proliferated at a fast pace. In view of the dismal performance of the conventional finance sectors, policy makers, practioners and international organizations advocated micro financing as the tool for poverty reduction. Today, there are more than 7000 micro lending organizations providing loans to more than 25 million poor individuals across the world, the vast majority of who are women. The United Nations Capital Development Fund declared 2005 as the year of micro credit. The success of Grameen bank model in Bangladesh, which offered loans to poor people through group collateral, was emulated in many countries worldwide.