THE ROLE OF UNIVERSAL BANKS IN THE DEVELOPMENT OF THE SMALL-SCALE BUSINESS IN THE NIGERIA ECONOMY

The economic reform programmed and successive development plans in Nigerian stressed much on attainment of self-reliance and self-actualization. There has been a decisive switch of emphasis from expensive capital intensive, large-scale industrial projects based on the philosophy of import substitution to small-scale industries with immense projects for developing domestic linkages for rapid, sustainable industrial development. The reason for this national objective is that much is expected from individual and it is from the viewpoint of providing employment opportunity and self-reliance in industrial and food production coupled with the provision of raw materials. Unfortunately, small-scale enterprises in Nigerian continue to decline, despite the priority given to this sector. In Nigeria, there are financial institutions like other developing countries of the world, which cater for long and medium term credit needs of businesses operating in the economy. Small and medium-scale industries are in desperate need of capital for development and expansion. That is why Central Bank requested from 1970/80 that universal banks must reserve a proportion of their minimum credit allocation to Indigenous borrowers for small and medium-scale Nigeria enterprises (S M N E). Central bank opted to achieve 10 percent in 1979, and was later raised to 19.8 percent in 1992. Currently, the reserve of their minimum credit allocation to indigenous borrowers for (S M N E) has been prescribed. From the available data, it is observed that the performance of universal banks towards the achievement of the stated objective of the Central Bank to small scale enterprises has been disappointing the quest for industrialization. It is the humble opinion of the researcher that future development in our industrialization must address the basic issue of creating linkages within the economy to begin to produce real inputs to our manufacturing activities.