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It is now common knowledge according to egbe(2000) that the 1980’s witnessed a rapid growth of commercials banking activities in many Nigeria rural communities where banking habits, culture, commitment and community development was poor if not non –existent

It is instructive to note that during this period, community funds among rural dwellers hardly were gathered for saving and loans in order to stimulate domestic investment

Also, interest on borrowed money was made as low as possible by the two bank to enable small-scale rural community industrialist and agriculturist to borrow with ease

However, the idea behind micro-finance bank is to encourage rural development through rural commitment in modern financial institution within the rural environment. Thus, microfinance banking is supposed to be the machineries for financial and economic emancipation as its growth is connected with the community in which it server.

It is based on this that the purpose of this work attempts to ascertain the of microfinance bank in the socio-economic development of rural community in Cross River State and specific call to

1.                 Identify and analyze the effect of microfinance banks on socio economic development i.e. employment and income generation of the rural communities in cross river state.

2.                 Examine the influence of bank credit policy on both the institutional lenders such as CBN and borrowers such as microfinance banks.

3.                 Examine the influence of micro-finance credit subsidy, interest ect. On the level of credit demand by small-scale business.

4.                 Make policy recommendations.


Small scale enterprise are the fulcrum for the development of any economy whether developing or developed the reason being that a larger bulk of the people engage, in this form of business especially in developing economic such as the cross river state government has in the recent time made.

Collaborative efforts with commercial banks and other development institution to create windows of special funding for the sector, in the last five years of a good number of financial institution have opened shop in Calabar as at last count there are not less than 40 bank branches in the state with more of them still coming up the whole essence of their presence is to facilitate and offer support to the private sector in growing the economy of Cross River State (CR SEEDS) 2006 MS M6) it is pertinent to define small scale business in order to offer an understanding of this study Osaze (1989) defined small scale business as one owned managed and controlled by one or two persons, with family influence in decision making and a relatively small share of the market and Nigeria bank for commerce on industry (NBCI) regards small scale business as these investing not more than N500,000.00 excluding the cost of land but including working capital CR SEED (2011 153) defined small scale business as those with the total investment of between N100,000 and one million exclusive of land but including working capital.

Akinrodoye (1982) defined business as the sum total of the organized efforts by which people engage in commerce and industries providing goods and server needed to maintain and improve the standard of living and quality of life to which each of us may aspire, Toung (1977:36) reports that president Richard Nixon of the United States of America during the small business week in 19th century.

Asserted that nineteen out of every twenty firm are considered small they provide approximately 35 million jobs and contribute more than 476 billion annually to gross national product. (G.N.P) this shows that the main stay of any economy no matter how highly developed is small scale business.

Consequently the Cross River State government therefore gives high priority to the small and medium scale enterprise project to and medium scale enterprise project to show case government interest in sinc, small scale the business state has set up a co-ordination umbrella association of “small scale industrialists” charged with the responsibility of, promoting small scale industries developing policies and programmes for small scale industries.

Provision of extension services meeting the training needs of small scale industrialists and provision of technical and management assistance of small scale business operation in Cross River State as it in other part of the developing world has a free entry and excite, it is relatively easy to start a small scale business very quickly also could it go into oblivion if it is not properly managed yet no economy can dispense with this form of business for many obvious reason.

Cross River State has a current estimated population of about 30 million for year 2004 with an average annual growth rate of 299% (Obtained from the 1990 national census figure) out of this estimated population about 40% (representing 1:2 million) are engaged in small scale business operation.


The role of small scale business operation in the economic development of cross river state is very unique and remarkable, however, there are series of problem, which impair it progress and occasionally cause such as business to get stagnated and even go into extinction this research work is intended to highlight all such problems.

1.                 Poor management is seriously affecting the operation of small scale industries.

2.                 Recruitment of unqualified personnel’s to manage small-scale industries.

3.                 Lack of adequate capital and credit facilities for growth

1.3            RESEARCH QUESTION

1.                 Does small-scale industries have management problem?

2.                 Do they experience inadequate funding?

3.                 Does the progress of small-scale industries delayed by the employment of qualified personnel?


The objective of this research work is to serve as a guide to researcher in gathering relevant data. The research objectives are as stated below:

1.                 To investigate if poor management affects the operation of small-scale industries

2.                 To find out whether funding is a problem of small scale industries.

3.                 To determine whether the recruitment of a qualified personnel hinders smooth running of small scale industries.

4.                 To ascertain if improper keeping of maintenance back of accounts affect speedily development of small-scale industries.

5.                 To establish whether inadequate capital as well as credit facilities hinder their growth.

6.                 To find out whether on separation of accounts obstacle for growth of small scale industries.


This research work is very significant especially being that the Cross River State Government is posed to transforming the state from her present civil service status to a private sector driven economy.

In doing this, it is pertinent to consider the role of small scale business operation in the economy development of the state.

1.6            SCOPE OF THE STUDY

The researcher wishes to state here that this work is to assess the impact of small-scale industries in the economic development of Ikom Local Government Area.

The Ikom Local Government Area comprise of Ofutup, Akperabong, Nde, Yala, Abayoung, Nta, Nnam, and Ikom four corners.

The researchers choice of Ikom four corners as a case study of Cassava, Yams, Poultry and Fishery farms at Ikom Local Government Area, Cross River State

In this regard research is prompted by the perennial shortages of food to sufficiently feed the teaming population of Ikom Local Government area. Though the communities have vast areas of rich farm land and verities of farm crops, they severely suffered object poverty.

They lack capital to purchase modern farming implement to dig deeply into the sub-strata of their supposedly rich soil form our findings, we can conclude that the inability to adapt the modern scientific method of farming, lack of capital to purchase modern agricultural equipments, non-availability of trained  technocrats non-orientation and utilization of the target population of mon Local Government Area.

1.7            DEFINITION OF TERMS

1.       BUSINESS

 Can be defined as the sum total if all organized efforts by which people engage in commerce and industry providing goods and services needed to maintain an improve the standard of living and quality of life to which each aspire glass and Sleede (1975:5)

2                   MANAGEMENT

Management is the process of designing and maintaining an environment in which individual working together in group efficiently accomplish selected aims.

3                   SMALL-SCALE BUSINESS

It is one which is owned managed and condoled by one or two persons.

Decision making is influence by the family has an undifferentiated organization structure is relatively small shares of the market and employees than 50 (fifty) people 9 Osaze (1986)

4                   ENTERPRISE

It is the person who co-ordinates all the other factors of production namely land, labour, capital and combine then for productive uses Lawal (1982)

5                   DEVELOPMENT


The united nations define development as a country or countries whose initial economic condition has been more or less static for a long time to generate and sustain an annual increase in its Gross National Product (G.N.P) at rates perhaps 6-7% but when viewed as an individual it implicate increases and capacity greater freedom creatively self discipline responsibility and material well being however, the realization aspect of 2personal development depend on the state of society Hanson (1977).

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