NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
APRIL/MAY 2019 EXAMINATION

COURSE CODE: BFN737                                                              

CREDIT UNIT: 2

COURSE TITLE: MICRO AND SMALL BUSINESS FINANCING

TIME ALLOWED:   2HRS

INSTRUCTIONS:    

1. Attempt Question One (1) and any other two (2) questions

2. Question 1 carries 30 marks, while the other questions carry 20 marks each

1a. Discuss five (5) objectives of microfinance policy in Nigeria.                          (5 marks)                          

  b. Explain the two (2) major sources of finance available to businesses in Nigeria.  (12 marks)

  c. Discuss eight (8) of the services a Microfinance bank could render.              (8 marks)

  d. Explain five (5) of the objectives the microfinance reform intended to achieve.       (5 marks)

2a. Federal government through the CBN approved intervention fund to be managed by Bank of Industry to improve SMEs access to finance as loan; enumerate five (5) credit facilities available under this fund.   (7½ marks)

  b. Discuss at least five (5) conditions for eligibility for this credit facility. (7½ marks)                         

  c. Explain five (5) business activities covered under the fund.                      (5 marks)

3a.What is financial ratio? State four (4) of its limitations.                                     (4 marks)     

  b. Discuss four (4) categories of ratios and show how each ratios is computed.   (16 marks)

4a.Differentiate between internal and external business risk.                                 (3 marks)

  b. Discuss briefly six (6) internal risks affecting business operations in Nigeria.            (12 marks)

  c. Explain four (4) sources of working capital to business in Nigeria.                              (5 marks)

5a.Discuss five (5) of the major problems of Small Scale Businesses in Nigeria.   (10 marks)

  b. Explain four (4) uses of capital in business.                                                      (5 marks)

  c. Indicate four (4) ways a business could build up its goodwill.                         (5 marks)