Behaviorism: Classical Conditioning Essay

There are four essential molding hypotheses of behaviorism. These four speculations are Pavlov’s (1849-1936) traditional molding, Thorndike’s (1874-1949) connectionism (otherwise called law of impact), Guthrie’s (1886-1959) bordering molding, and Skinner’s (1904-1990) operant molding. As per the content (Shunk 2012) Classical molding was found around the start of the twentieth century by Russian physiologist Ivan Pavlov. Pavlov was examining stomach related procedure in hounds when he found that the pooches salivated before they got their food. Pavlov used a tuning fork and meat powder. He hit the tuning fork and followed the sound with the meat powder. To start with, the pooch salivated distinctly to the meat powder, however after this was rehashed, salivated at the sound of the tuning fork. In old style molding, a subject figures out how to connect one upgrade with another. The subject discovers that the main boost is a signal for the subsequent improvement. At the end of the day, the meat powder is an unconditioned upgrade and the salivation is the unconditioned reaction. The tuning fork is a nonpartisan boost until the pooch figures out how to relate the tuning fork with food. At that point the tuning fork turns into an adapted boost which creates the molded reaction of salivation after rehashed pairings between the tuning fork and food. As per Guthrie’s Contiguous Conditioning the main condition important for the relationship of improvements and reactions is that there is a nearby sequential connection between the upgrades. Guthrie expresses that discipline and prize have no noteworthy job in the learning procedure on the grounds that the prize and discipline happen after the relationship between the improvement and the reaction has been made. He additionally accepted that you can utilize diverting change past molding. Derailing finding the underlying signs for the propensity and partner other conduct with those signals. Therefore diverting the inside relationship to separate. At the end of the day overlooking is because of impedance as opposed to the progression of time. Operant molding was spearheaded by B.F. Skinner and based on the traditional molding work of Ivan Pavlov (McLeod 2007). It is a technique for discovering that happens through remunerations and disciplines for conduct. Through these prizes and disciplines, an affiliation is made between a conduct and a ramification for that conduct. In operant molding, conduct happens all the more much of the time when followed by support, and happens less regularly when followed by discipline. The thought is that conduct is impacted by the outcomes that follow. At the point when you are remunerated for accomplishing something, you are bound to rehash that conduct. At the point when you are rebuffed for accomplishing something you are more averse to rehash that conduct. As per the content (Shunk 2012) Thorndike’s connectionism has two sections. First when a specific conduct is trailed by a prize, that conduct is bound to happen again later on. Second is that if a specific conduct is trailed by a discipline that conduct is less inclined to happen again later on. Hence the compensating conduct is found out and the rebuffing conduct isn't found out. Connectionism underscores that the more noteworthy the prize or discipline, the more prominent the fortifying or debilitating of the affiliation. Behaviorism depends on the reason that conduct is an element of its ecological outcomes or possibilities. Behaviorism was the essential worldview in brain science between the 1920s through 1950 and depends on various basic presumptions with respect to approach and conduct investigation (McLeod 2007). Behaviorism manages the results of conduct and those practices can be compensated or rebuffed. Prize fortifications can reinforce practices or increment the conduct for instance, giving commendation advances great conduct. Disciplines objective is to diminish the conduct or probability of it happening once more. A positive to behaviorism is that it will in general foresee the conduct in specific conditions. The potential outcomes to foresee is the way to controlling conduct and therefore maintain a strategic distance from unnecessary responses. Another positive, is the idea of remunerations and discipline in behaviorism can be helpful so as to adjust to the necessary conduct. As it were behaviorism proposes that one can foresee and adjust conduct by deliberately controlling the outcomes. Interestingly the shortcoming of behaviorism is that it endeavors to clarify all the activities of an individual just through obvious events, making it difficult to legitimately watch the event of cognizance. So the principle restriction is that the conduct of an individual is consistently an educated affiliation that was once bolstered or rebuffed. Behaviorism somehow or another dismisses the independence of each individual by making the suspicion that individuals are not answerable for what they do yet rather infers that the entirety of the social demonstrations of an individual are based past remunerations/results experienced. Behaviorism ideas can be applied to in home family directing. To begin with, gauging exercises, ventures and case plan goals to relate with the corresponding measure of exertion one might want for the family to place into these exercises compensates and strengthens family exertion, inclusion and execution in those zones. So also, giving criticism during the improvement of the case plan and fulfillment of case plan destinations remunerates and fortifies learning after some time, and should bring about better maintenance and expertise advancement. This later kind of support much of the time happens with the guardians yet additionally can be utilized adequately young people too as things, for example, errand diagrams. The standards of behaviorism can be helpful in encouraging learning inside the in home advising. Be that as it may, they don't represent the inspiration or thought behind activities taken in light of the fact that behaviorism centers around practices that can be watched as it were. For instance a family could be finishing destinations for a situation plan basically just to have the case shut instead of to really advance in their child rearing abilities. As per the content (Shunk 2012) self-guideline includes practices, as people manage their practices to keep themselves concentrated on objective accomplishment. Behaviorism expresses that conduct is found out, and new learning is an aftereffect of securing new standards of conduct by methods for natural molding. It very well may be contended that there is a relationship between's the two, in any event from a learner’s point of view. It very well may be said that self-guideline is dependent on objective setting and self-viability. In this way except if students have objectives and feel that acquiring them is significant, a student may not enact the procedures required for self-guideline. Behaviorism could introduce itself as exemplary molding that being found out conduct dependent on experience. A student realizes that so as to handle a class one must excel on alloted work. The student would then focus on it to work constantly on said work, through the procedure of self-guideline. The accentuation put on the work would be done as such because of the scholarly conduct that in the event that one doesn't do well one would get a not exactly heavenly evaluation and accordingly risk not getting through the class. References Schunk, D. H. (2012). Learning hypotheses: An instructive viewpoint, sixth ed. Boston, MA: Pearson.Fields, H. (2011). Is Behaviorism Dead? Recovered from http://www.scholarshub.wordpress.com McLeod, S. A. (2007).Behaviorism. Recovered from http://www.simplypsychology.org/behaviorism.html

SAT Historical Percentiles for 2015, 2014, 2013, 2012, and 2011

SAT Historical Percentiles for 2015, 2014, 2013, 2012, and 2011 SAT/ACT Prep Online Guides and Tips On the off chance that you took the SAT from 2011-2015, you might be thinking about what your percentile score is on the SAT. Is a 1500 on the SAT in 2011 a similar percentile score as a 1500 out of 2015? Do percentile scores change after some time? In this article, I will clarify SAT percentile scores, how they change, and I'll give the percentile scores to SAT consolidated scores and segment scores for 2015, 2014, 2013, 2012, and 2011. Note: Go to this article rather in case you're searching for recorded percentiles for the new SAT (tests taken March 2016 and later). What Are Percentile Scores? Percentile scores uncover how well you did corresponding to others. On the off chance that you scored in the 99th percentile, at that point you showed improvement over 99% of the individuals who stepped through the examination. On the off chance that you scored in the 50th percentile, at that point you scored higher than half of the individuals who stepped through the exam. The College Board decides its percentile scores every year from the scores of school destined secondary school seniors who took the SAT. The higher your percentile score, the better you did comparative with other secondary school seniors. Do Percentile Scores Change? By and large, percentile scores for equal SAT scores remain the equivalent from year to year. For instance, a joined SAT score of 2180 was the 98th percentile in2011, 2012, 2013, 2014, and 2015. Be that as it may, percentile scores for the equivalent joined and area scores can change marginally. A consolidated score of 1990 was the 92nd percentile for 2014, however it was the 93rd percentile in 2011-2013 and 2015. Essentially, a score of 630 on Critical Reading was the 86th percentile in 2011, 2013, 2014, and 2015, yet it was the 87th percentile in 2012. The SAT tries to use its scoring framework with the goal that proportional SAT scores are demonstrative of a similar percentile scores and aptitude level, paying little heed to when the test was taken. The motivation behind the SAT is to give a legitimate method to look at understudies. A score of 1600 from March 2015 should be comparable to a 1600 from April 2015 or April 2007. By what method Should You Use This Data and Why Is It Important? Your percentile score is the most clear approach to decide whether you got a decent or badSAT score. On the off chance that you scored higher than most of test-takers, at that point you progressed admirably. Notwithstanding, when you apply to a particular school, you're being contrasted with different understudies who apply to that school. Most schools plug their 25th and 75th percentile SAT scores. On the off chance that you need to be serious for confirmation at a specific school, at that point your objective score ought to be aroundthe school's 75th percentile score. Additionally, percentile scores help put your scores in setting. There may not appear to be a lot of contrast between a 680 on the Critical Reading area and a 600 on Math, however the Critical Reading score is the 94th percentile while the Math score is the 75th (as indicated by 2015 SAT percentiles). Raising each area score by 100 would raise the Critical Reading percentile positioning by 5 however the Math by 18. In case you're thinking about retaking the SAT, your percentile scores can assist you with deciding how you ought to organize your time. Likewise, a little composite score increment can hugy affect your percentile score in the event that you got a center score. For instance, in 2015, a 1500 was the 52nd percentile yet a 1750 was the 78th. Raising your score 250 focuses can raise your score from normal to among the best 1/4 of test-takers. At long last, seeing the percentile scores for numerous years shows how little fluctuation there is between percentile scores for a similar SAT composite or area score in various years. In case you're stressed over how a more established SAT score piles up with later scores, investigate these graphs to get a thought of how it analyzes. Composite Score Percentiles, 2015 - 2011 Score 2015 Percentile 2014 Percentile 2013 Percentile 2012 Percentile 2011 Percentile 2400 99+ 99+ 99+ 99+ 99+ 2390 99+ 99+ 99+ 99+ 99+ 2380 99+ 99+ 99+ 99+ 99+ 2370 99+ 99+ 99+ 99+ 99+ 2360 99+ 99+ 99+ 99+ 99+ 2350 99+ 99+ 99+ 99+ 99+ 2340 99+ 99+ 99+ 99+ 99+ 2330 99+ 99+ 99+ 99+ 99+ 2320 99+ 99+ 99+ 99+ 99+ 2310 99+ 99+ 99+ 99+ 99+ 2300 99 99 99+ 99 99+ 2290 99 99 99 99 99+ 2280 99 99 99 99 99 2270 99 99 99 99 99 2260 99 99 99 99 99 2250 99 99 99 99 99 2240 99 99 99 99 99 2230 99 99 99 99 99 2220 99 99 99 99 99 2210 98 98 98 99 99 2200 98 98 98 98 98 2190 98 98 98 98 98 2180 98 98 98 98 98 2170 98 98 98 98 98 2160 98 98 98 98 98 2150 97 97 97 97 98 2140 97 97 97 97 97 2130 97 97 97 97 97 2120 97 97 97 97 97 2110 97 96 97 97 97 2100 96 96 96 96 96 2090 96 96 96 96 96 2080 96 96 96 96 96 2070 95 95 95 96 96 2060 95 95 95 95 95 2050 95 95 95 95 95 2040 94 94 94 95 95 2030 94 94 94 94 94 2020 94 94 94 94 94 2010 93 93 93 93 93 2000 93 93 93 93 93 1990 93 92 93 93 93 1980 92 92 92 92 92 1970 92 92 92 92 92 1960 91 91 91 91 91 1950 91 91 91 91 91 1940 90 90 90 90 90 1930 90 90 90 90 90 1920 89 89 89 89 89 1910 89 89 89 89 89 1900 88 88 88 88 88 1890 88 87 88 88 88 1880 87 87 87 87 87 1870 87 86 86 87 86 1860 86 86 86 86 86 1850 85 85 85 85 85 1840 85 84 84 85 84 1830 84 84 84 84 84 1820 83 83 83 83 83 1810 83 82 82 82 82 1800 82 81 82 82 82 1790 81 81 81 81 81 1780 80 80 80 80 80 1770 80 79 79 79 79 1760 79 78 78 79 78 1750 78 77 78 78 78 1740 77 77 77 77 77 1730 76 76 76 76 76 1720 75 75 75 75 75 1710 74 74 74 74 74 1700 74 73 73 73 73 1690 73 72 72 72 72 1680 72 71 71 71 71 1670 71 70 70 70 70 1660 70 69 69 69 69 1650 69 68 68 68 68 1640 68 67 67 67 67 1630 67 66 66 66 66 1620 66 65 65 65 65 1610 65 64 64 64 64 1600 64 63 63 63 63 1590 62 62 62 62 62 1580 61 61 61 61 61 1570 60 60 60 60 59 1560 59 59 58 59 58 1550 58 57 57 57 57 1540 57 56 56 56 56 1530 56 55 55 55 55 1520 55 54 54 54 53 1510 53 53 52 53 52 1500 52 52 51 51 51 1490 51 50 50 50 50 1480 50 49 49 49 49 1470 49 48 48 48 47 1460 48 47 46 47 46 1450 46 46 45 45 45 1440 45 44 44 44 44 1430 44 43 43 43 42 1420 43 42 42 42 41 1410 42 41 40 40 40 1400 40 40 39 39 39 1390 39 38 38 38 38 1380 38 37 37 37 36 1370 37 36 36 36 35 1360 36 35 34 34 34 1350 34 34 33 33 33 1340 33 32 32 32 32 1330 32 31 31 31 30 1320 31 30 30 30 29 1310 30 29 29 29 28 1300 29 28 27 27 27 1290 28 27 26 26 26 1280 27 26 25 25 25 1270 26 25 24 24 24 1260 25 24 23 23 23 1250 24 23 22 22 22 1240 22 22 21 21 21 1230 22 21 20 20 20 1220 21 20 19 19 19 1210 20 19 18 18 18 1200 19 18 17 17 17 1190 18 17 17 16 16 1180 17 16 16 16 15 1170 16 15 15 15 14 1160 15 14 14 14 14 1150 14 14 13 13 13 1140 14 13 13 12 12 1130 13 12 12 11 11 1120 12 11 11 10 11 1110 12 11 11 10 10 1100 11 10 10 9 9 1090 10 10 9 9 9 1080 10 9 9 9 8 1070 9 8 8 8 8 1060 9 8 8 7 7 1050 8 7 7 7 7 1040 7 7 7 7 6 1030 7 6 6 6 6 1020 7 6 6 6 5 1010 6 6 5 5 5 1000 6 5 5 5 5 990 5 5 5 5 4 980 5 5 4 4 4 970 5 4 4 4 4 960 4 4 4 4 3 950 4 4 3 3 3 940 4 3 3 3 3 930 3 3 3 3 3 920 3 3 3 3 2 910 3 3 3 2 2 900 3 2 2 2 2 890 2 2 2 2 2 880 2 2 2 2 2 870 2 2 2 2 2 860 2 2 2 1 1 850 2 2 1 1 1 840 2 1 1 1 1 830 1 1 1 1 1 820 1 1 1 1 1 810 1 1 1 1 1 800 1 1 1 1 1 790 1 1 1 1 1 780 1 1 1 1 1 770 1 1 1 1- 1- 760 1 1 1- 1- 1- 750 1 1 1- 1- 1- 740 1- 1- 1- 1- 1- 730 1- 1- 1- 1- 1- 720 1- 1- 1- 1- 1- 710 1- 1- 1- 1- 1- 700 1- 1- 1- 1- 1- 690 1- 1- 1- 1- 1- 680 1- 1- 1- 1- 1- 670 1- 1- 1- 1- 1- 660 1- 1- 1- 1- 1- 650 1- 1- 1- 1- 1- 640 1- 1- 1- 1- 1- 630 1- 1- 1- 1- 1- 620 1- 1- 1- 1- 1- 610 1- 1- 1- 1- 1- 600 Area Score Percentiles Basic Reading Score 2015 Percentile 2014 Percentile 2013 Percentile 2012 Percentile 2011 Percentile 800 99 99 99 99+ 99+ 790 99 99 99 99 99 780 99 99 99 99 99 770 99 99 99 99 99 760 99 99 99 99 99 750 98 98 98 98 98 740 98 98 98 98 98 730 97 97 97 97 97 720 96 97 97 97 97 710 96 96 96 96 96 700 96 95 95 95 95 690 95 94 94 94 94 680 94 93 94 93 93 670 92 92 92 92 92 660 91 91 91 91 91 650 90 90 90 90 90 640 89 88 88 88 88 630 86 86 86 87 86 620 84 84 84 84 84 610 82 82 82 83 82 600 80 80 80 81

Room Arrangement

Room Arrangement Arrangement of class space is crucial when dealing with disruptive students and important to consider for all students. Updated on: January 9, 2001 Room Arrangement Editor's Note: The following list has suggestions for working with students with behavior problems, but the ideas are easily modified for any student.Provide students with adequate space around their desks. If students are seated so that they can touch each other easily without getting up, stealing and hitting problems could escalate. Keep all items not in immediate use in cabinets or closets. Lock the cabinets or closets if possible. The more items available for an angry child to throw, the more rewarding and potentially harmful the tantrum becomes. Keep scissors, X-acto knives, and other potential weapons out of students' reach. Closely supervise art and cooking activities. Make it clear that these activities will stop if rules are not followed. If necessary, arrange furniture to provide students with visual barriers during independent work times. Make areas of the room activity specific. For example, desks are for work; the rug is for p lay; the large table is for group discussion; and the time-out corner is for cooling off and thinking. This helps the students develop constructive classroom behavior habits and reduces confusion over what behavior is expected at a given place and time. Check activity-specific areas for appropriate space, lighting, storage, and furniture needs. Remove everything from the room that is not absolutely necessary. Make furniture and materials accessible to students in order to increase productivity and decrease anger and frustration. Actively enforce the rule that people are not for hurting.  

The Holocaust And Its Effects On The Jews And The Rest Of...

The Holocaust was a systematic government enforced persecution and murder of the Jews that took place throughout Nazi-occupied territories under the command of Adolf Hitler. Although the rest of the world did not suffer from the abuse, murder and isolation that the Jews endured, the brutal polices against Jews caused major destruction and sparked tremendous outrage globally. World War 2 erupted after Adolf Hitler won the election for Germany’s leader in 1933. Throughout the years, his dictatorship grew and his aim was to abolish the Treaty of Versailles, issued at the end of World War 1, and regain Germany’s power. A study of the Holocaust provides the information on what prompted the holocaust and its relation to the dictatorship that Germany was under, the policies that were involved, including Ant-Semitism, Concentration Camps and Ghettos, and how the Holocaust impacted the Jews and the rest of the world. The Holocaust was prompted by Adolf Hitler’s views on re-introducing Eugenics, a practice aimed to ‘improve’ the human gene pool by controlling who gives birth to children. The Nazi’s policies were heavily influenced by the notion of Eugenics to an extent where the sterilization of Jews was introduced. Hitler believed that the ‘personification of the devil as the symbol of all evil assumes the living shape of the Jew’ (R Smith, 2009). His entire purpose was to create a race of ethnic Germans by developing these policies diminishing the Jewish race’s chances ofShow MoreRelatedEssay on The Importance of Holocaust In the Establishment of Israel900 Words   |  4 PagesThe Importance of Holocaust In the Establishment of Israel The holocaust seems to be a major reason in the establishment of the state of Israel. The state of Israel was created in May 1948; the Jews finally had a homeland of their own. 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Key Concepts in Conversation Analysis

Though a man succeeds, he should not (as is frequently the case) engross the whole talk to himself; for that destroys the very essence of conversation, which is talking together .(William Cowper, On Conversation, 1756) In recent years, the related fields of discourse analysis and conversation analysis have deepened our understanding of the ways in which language is used in everyday life. Research in these fields has also widened the focus of other disciplines, including rhetoric and composition studies. To acquaint you with these fresh approaches to language study, weve put together a list of 15 key concepts related to the ways we talk. All of them are explained and illustrated in our Glossary of Grammatical and Rhetorical Terms, where youll find a name for . . . the assumption that participants in a conversation normally attempt to be informative, truthful, relevant, and clear: cooperative principlethe manner in which an orderly conversation normally takes place: turn-takinga type of turn-taking in which the second utterance (for example, Yes, please) depends on the first (Would you like some coffee?): adjacency paira noise, gesture, word, or expression used by a listener to indicate that he or she is paying attention to a speaker: back-channel signala face-to-face interaction in which one speaker talks at the same time as another speaker to show an interest in the conversation: cooperative overlapspeech that repeats, in whole or in part, what has just been said by another speaker: echo utterancea speech act that expresses concern for others and minimizes threats to self-esteem: politeness strategiesthe conversational convention of casting an imperative statement in question or declarative form (such as Would you pass me the potatoes?) to co mmunicate a request without causing offense: whimperativea particle (such as oh, well, you know, and I mean) thats used in conversation to make speech more coherent but that generally adds little meaning: discourse markera filler word (such as um) or a cue phrase (lets see) used to mark a hesitation in speech: editing termthe process by which a speaker recognizes a speech error and repeats what has been said with some sort of correction: repairthe interactive process by which speakers and listeners work together to ensure that messages are understood as intended: conversational groundingmeaning thats implied by a speaker but not explicitly expressed: conversational implicaturethe small talk that often passes for conversation at social gatherings: phatic communicationa style of public discourse that simulates intimacy by adopting features of informal, conversational language: conversationalization Youll find examples and explanations of these and over 1,500 other language-related expressions in our ever-expanding Glossary of Grammatical and Rhetorical Terms. Classic Essays on Conversation While conversation has only recently become an object of academic study, our conversational habits and quirks have long been of interest to essayists. (Not surprising if we accept the notion that the essay itself may be regarded as a conversation between writer and reader.) To take part in this ongoing conversation about conversation, follow the links to these eight classic essays. The Musical Instruments of Conversation, by Joseph Addison (1710) I must not here omit the bagpipe species, that will entertain you from morning to night with the repetition of a few notes which are played over and over, with the perpetual humming of a drone running underneath them. These are your dull, heavy, tedious, story-tellers, the load and burden of conversations. Of Conversation: An Apology, by H.G. Wells (1901) These conversationalists say the most shallow and needless of things, impart aimless information, simulate interest they do not feel, and generally impugn their claim to be considered reasonable creatures. . . . This pitiful necessity we are under, upon social occasions, to say something—however inconsequent—is, I am assured, the very degradation of speech. Hints Toward an Essay on Conversation, by Jonathan Swift (1713) This degeneracy of conversation, with the pernicious consequences thereof upon our humours and dispositions, hath been owing, among other causes, to the custom arisen, for sometime past, of excluding women from any share in our society, further than in parties at play, or dancing, or in the pursuit of an amour. Conversation, by Samuel Johnson (1752) No style of conversation is more extensively acceptable than the narrative. He who has stored his memory with slight anecdotes, private incidents, and personal peculiarities, seldom fails to find his audience favourable. On Conversation, by William Cowper (1756) We should try to keep up conversation like a ball bandied to and fro from one to the other, rather than seize it all to ourselves, and drive it before us like a football. Childs Talk, by Robert Lynd (1922) Ones ordinary conversation seems so far beneath the level of a small child. To say to it, What wonderful weather weve been having! would seem an outrage. The child would merely stare. Talking About Our Troubles, by Mark Rutherford (1901) [A]s a rule, we should be very careful for our own sake not to speak much about what distresses us. Expression is apt to carry with it exaggeration, and this exaggerated form becomes henceforth that under which we represent our miseries to ourselves, so that they are thereby increased. Disintroductions by Ambrose Bierce (1902) [W]hat I am affirming is the horror of the characteristic American custom of promiscuous, unsought and unauthorized introductions. You incautiously meet your friend Smith in the street; if you had been prudent you would have remained indoors. Your helplessness makes you desperate and you plunge into conversation with him, knowing entirely well the disaster that is in cold storage for you. These essays on conversation can be found in our large collection of Classic British and American Essays and Speeches.

Lebron v Kobe Free Essays

People are always looking forward to basketball season. There are many good players in the league. I think that the two best players are Kobe Bryant and Lebron James. We will write a custom essay sample on Lebron v Kobe or any similar topic only for you Order Now Both players perform excellent on the court. Although the players play well, they are totally different athletes. The attitudes, skills, and passion for the game are expressed in different ways. Although, Lebron James is young in the league of NBA basketball, he has the ability to shutdown most all-star veterans. Lebron’s attitude towards basketball hasn’t changed a bit from his high school career. Even though he is in the pros, his mentality is still teamwork. In a game like basketball you can’t do everything by yourself. Many may think he is a one man team or a ball hog but, his attitude towards the game makes himself stand out. On the other hand, Kobe Bryant has had a few more years of experience than Lebron James. In the beginning of his basketball career his attitude was similar to that of Lebron James’ current one. After a couple of years of playing with the same team and winning a variety of championships, his outlook on the sport began to change. Many in which caused controversy with his fellow former teammate Shaquille O’Neal. Lebron James has very exceptional skills in the level that he plays at. Not only did he get drafted directly out of high school but, he is one of the top players that are recognized when one mentions basketball. James has led his team to consecutive playoff appearances from 2006 through 2009. On offense, Lebron is known for using his size, strength, and quickness to get past offenders. His skills have led to many comparisons to NBA legends like Magic Johnson, Oscar Robertson, and Michael Jordan. Kobe Bryant is considered one of the most complete players in NBA history. Kobe has the ability to create shots for himself and is an effective outside shooter. Aside from this, he is a standout defender, having made the All-Defensive first and second team nine of the last ten seasons. The passion each individual has for the game of basketball is different from one another. Lebron James’ perspective on basketball is it’s â€Å"More Than a Game†. Basketball to him is more like a lifestyle in other words. The teamwork he and his teammates show on the court create a sense of brotherhood. Lebron knows that its not all about him because the game of basketball is a team sport. Kobe Bryant’s passion for the game is different. He started playing the sport at the age of 3 years old. Kobe’s father was in the NBA when he was young and had a big influence on him. On the court, he knows it’s a job to be done and he dominates on a regular basis. There are many similarities between Lebron James and Kobe Bryant. In contrast, there are many differences as well. Each individual has a certain way they present their selves on and off the court. One thing for sure, professional basketball would not be the same without them. How to cite Lebron v Kobe, Essay examples

Crazy Little Thing Called Love Sample Essay Example For Students

Crazy Little Thing Called Love Sample Essay It is a Thailand Movie. The narrative revolves on the life of a pupil her name is Nam. She is a immature and ordinary high school miss. unattractive with nerd spectacless and dark tegument tone. She has a large crush on a heartthrob senior ( Shone ) at school. To do him see that she exists in his universe. the miss tries to better her physical expression and efforts to go the star at school. However. her crush seems non to pay any attending to her yet. Until Nam tried to hike in her surveies and besides doing herself reasonably. It all started when her friends started speaking about a book that introduces a measure process on â€Å"How to do the individual you love fall for you† . She did non believe it at foremost but subsequently on tried all stairss her friends helped her in her â€Å"make-over† . she was chosen to play as â€Å"Snow White â€Å" in a drama. Shone was at that place to assist in doing other props. During the school parade she chose as a replacement to be the lead in the parade. Everybody was shocked or amazed on her transmutation and on the parade her crush was taking images of her. Graduation twenty-four hours has Nam tried to squeal to Shone she went in the pool country to speak to Reflect when she gave the rose to Shone she saw a name and its ( P’pin ) . Girlfriend of shone she was so hurt at that clip. She went to America to complete her calling as a manner interior decorator she became popular. Shone besides had his calling as a Football participant. Nam returned to Thailand after few old ages for an interview. On that interview she didn’t expect that Shone would demo up and all the secrets they hid from each other were burst in the populace. Nam ask shone if he was married. Shone said that she’s waiting for her miss to come back from America they had a same feeling for each other in the terminal . The dramatis personae in the film were great. particularly the lead stars. Pimchanok Baifern Lerwesetpibol played as Nam while Mario Maurer played Shone. Two great subscribers that made this film great with their directing accomplishments were Puttipong Pormsaka Na-sakonnakorn and Wasin Pokpong. After this film was aired in the Philippines Television web. ABS-CBN. it truly hit the heartsof the viewing audiences and made them fall in love with it. What we love about this film is that you can acquire and larn many things about love from it. From the adversities of falling in love and in doing the individual you love notice you. Giving your best in everything you do to better yourself. You will see in the film that when it comes to love people becomes a sap. Making secret things behind the individual you love’s back. like taking stolen images and giving simple but difficult intimations for them notice. It is non easy to squeal ; at times a individual turns into a jerk or in tagalog â€Å"torpe† . There will ever be tests in love. sometimes a love trigon happens and will convey hurting to the individuals involved. Friendship will besides impede love. when both you and your friend love same individual. Finally. one will make up ones mind to allow travel in order non to ache the other but in the terminal all of them will be in hurting. What is of import is that from the film you will larn that†Love is worth the delay and a happy stoping may be after all the things you’ve been through† . .ubb86b21e89a36091b370ca9dc0dfd27b , .ubb86b21e89a36091b370ca9dc0dfd27b .postImageUrl , .ubb86b21e89a36091b370ca9dc0dfd27b .centered-text-area { min-he ight: 80px; position: relative; } .ubb86b21e89a36091b370ca9dc0dfd27b , .ubb86b21e89a36091b370ca9dc0dfd27b:hover , .ubb86b21e89a36091b370ca9dc0dfd27b:visited , .ubb86b21e89a36091b370ca9dc0dfd27b:active { border:0!important; } .ubb86b21e89a36091b370ca9dc0dfd27b .clearfix:after { content: ""; display: table; clear: both; } .ubb86b21e89a36091b370ca9dc0dfd27b { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ubb86b21e89a36091b370ca9dc0dfd27b:active , .ubb86b21e89a36091b370ca9dc0dfd27b:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ubb86b21e89a36091b370ca9dc0dfd27b .centered-text-area { width: 100%; position: relative; } .ubb86b21e89a36091b370ca9dc0dfd27b .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ubb86b21e89a36091b370ca9dc0dfd27b .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ubb86b21e89a36091b370ca9dc0dfd27b .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ubb86b21e89a36091b370ca9dc0dfd27b:hover .ctaButton { background-color: #34495E!important; } .ubb86b21e89a36091b370ca9dc0dfd27b .centered-text { display: table; height: 80px; padding-left: 18px; top: 0; } .ubb86b21e89a36091b370ca9dc0dfd27b .ubb86b21e89a36091b370ca9dc0dfd27b-content { display: table-cell; margin: 0; padding: 0; padding-r ight: 108px; position: relative; vertical-align: middle; width: 100%; } .ubb86b21e89a36091b370ca9dc0dfd27b:after { content: ""; display: block; clear: both; } READ: 8220To Infinity and Beyond8221 Essay

Poverty Research Proposal

Table of Contents Introduction Problem statement Significance of the study Relevant Literature Review Methodology Conclusion References Introduction For a long time, poverty has been perceived to constitute lack or inadequacy of basic needs, including food, clothing, and shelter. The levels by which different societies achieve these three basic essentials vary, and this explains the differences in poverty levels among different societies. Today, America is described to have the highest level of poverty rate compared to other industrialized countries (Garcia, 2011).Advertising We will write a custom research paper sample on Poverty: Research Proposal specifically for you for only $16.05 $11/page Learn More To justify this, the recent and most current statistics from the Census Bureau shows that the level and rate of poverty in USA is increasing, with minority ethnic groups being the most disadvantaged (Dye, 2010). In the past, numerous poverty reducti on policies have been formulated and implemented, but their overall impact remains below expectations, as the main beneficiaries are the middle class in expense of the poor (Dye, 2010). Therefore, the situation calls for paradigm shift in policy formulation and implementation. Problem statement In the year 2010, poverty rate in USA stood at 15.1% up from 14.3% recorded in the previous year-2009 (USA Census Bureau, 2011). At the same time, it was noted that poverty rate for the last four years has been increasing at an estimated rate of 2.6%. On overall, in 2010, estimates indicated that about 46.2 million Americans are poor and the rate of poverty increased was observed to affect almost all major ethnic groups in America: Whites, African American, Asians, Hispanic (USA Census Bureau, 2011). Furthermore, the 2010 official statistics indicated the highest rate of poverty the country had experienced and recorded since 1993. Therefore, in order to address this issue of increasing povert y, there is need to conduct an action research that investigates public policy initiatives in USA with regard to poverty, and subsequently propose the most effective public policy that can be pursued successfully. Significance of the study Poverty remains an issue that ought to be addressed in the American society as a way of achieving the American Dream. Social inclusion goals and objectives postulate that, the well-being of humankind is the essence of stability, peace, and societal development.Advertising Looking for research paper on government? Let's see if we can help you! Get your first paper with 15% OFF Learn More Therefore, addressing poverty is one way of achieving social inclusion goals. At the same time, there is need for an effective public policy that comprehensively addresses the issues of poverty in the country. Therefore, this study possesses the ability to create a sound body of knowledge that in turn can be used to create an effective public policy f ramework. Relevant Literature Review Poverty level in USA is increasing at gradual rate, and the overall impact of this to the society is huge (Garcia, 2011). Addressing poverty has assumed and utilized unilateral public policy models that in turn have led to inadequacy in tackling the issue of poverty. For instance, many of the convectional poverty policies address education, employment, social security, health, economic growth, and tax (Anonymous, 2006). This has been done in separatedness and the result has been construction, formulation, and implementation of skewed and weak poverty reduction models. There is need to establish broad-based understanding of poverty and know that it interplays with other factors and elements simultaneously, hence any attempt to address poverty requires addressing the interplay of accompanying factors. According to Corak (2005), in order to fight poverty, social and physical infrastructure and services can be funded and maintained effectively if the target groups are involved in designing, implementing, and monitoring them, as well as in ensuring accountability of the government officials responsible for such policies. Methodology Primary and secondary research methods will be utilized, where primary data will be generated through actual field research techniques, while secondary data will be generated from works already done in the field. Furthermore, reliability and validity of information will be enhanced through use of both quantitative and qualitative techniques. This will see the use of questionnaires, field interviews, poverty program surveys, and in-depth discussion. The aim of this will be to ensure that the public policy to be designed captures the aspect and essence of poverty and subsequent reduction strategies in broad perspective.Advertising We will write a custom research paper sample on Poverty: Research Proposal specifically for you for only $16.05 $11/page Learn More Conclusion P overty remains a social issue that requires clear strategies of addressing it. Efforts in the past have bore fruits, but given recent trends of increasing cases of poverty in the society, there is an urgent need to address poverty comprehensively. It is from this fact that it is recommended that addressing poverty in modern America require an action plan originating from an inclusive and integrated social equity policy strategy. References Anonymous. (2006). How can we solve the problem of poverty. Web. Corak, M (2005). Equality of Opportunity and Inequality across the Generations: Challenges Ahead. Policy Options, 26(3), 78–83. Dye, T.R. (2010). Understanding public policy (13th ed.). Longman: Pearson Prentice Hall. Garcia, G. (2011). Mexican American and Immigrant Poverty in the United States. NY: Springer. USA Census Bureau. (2011). ‘Poverty Highlights. USA Federal Press. Web. This research paper on Poverty: Research Proposal was written and submitted by user Mikaela Patrick to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

How Long Should The Perfect List Post Be

How Long Should The Perfect List Post Be List posts, the stuff of magic. The staple food of Buzzfeed and social media and content marketing everywhere. Maybe Martin Luther started a trend when he nailed a list to that door. Readers  love lists. Content marketers love lists. But a Buzzfeed list is one thing, with its catchy photos, quick blurbs, and fast takeaways for the reader. How  about a long-form blog post, on a topic that isnt so fun and full of baby animal photos? Do list posts still perform even if youre not  selling Buzzfeeds brand of emotional adrenaline? 3  Unbelievable Reasons List Posts  Create Traffic Why are list posts so popular? Why is your social media feed either filled with Upworthy-type headlines or numbered lists? 1. List posts stir up curiosity. 50 Laws That Are Ruining Your Life,  5  Signs Youre About To Be Rich, 7 Ways To Lose Weight In Just One Week – I wrote these fake headlines and Im dying to know the answers myself! List post headlines tend to promise big with just a hint of the vague to make you wonder how such a promise could ever be fulfilled. A 2009 study by the University of Athens discovered that readers preferred a slightly ambiguous headline. In talking about the power of lists and this study, The New Yorker writer Maria Konnikova wrote  that people preferred headlines that were both creative and uninformative, like â€Å"THE SMELL OF CORRUPTION, THE SCENT OF TRUTH† or â€Å"FACE TO FAITH.† These were headlines that didnt give away the farm. You had to read the article to make complete sense of them. List posts answer the questions we have and the questions we didnt know we had. They do this with headlines that have just enough ambiguity to pull us in. 2. List posts are finite. As a reader trying to quickly consume content during the day,  a list post looks easy to scan or read. I can zip through the listed items, which are like mini packaged blog posts all on their own. I dont have to commit to the full post if I dont want to. I can just read the listed item (or even their headings) and be fine. The great Umberto Eco even wrote a book about how lists help us comprehend (and manage) the infinite. Lists are a powerful tool. They help us know there is an ending. They help us  remember it easier. We all like simplification. We like to know there is a beginning and an end. The finite is comforting. List posts simplify complex subjects. Readers like that.3. Lists bring order to chaos. There is a lot of information available. It is chaos, if you ever bothered to step back and consider it all. We have too many options, too many choices, and its harder to make a decision. This excessive choice sometimes leaves us unable to process any of it, a frustrated state of being called analysis paralysis. We want to have to think less, when faced with all of this choice, and list posts stand out. They are ordered, and orderly.  According to David Wallechinsky, co-author of the Book of Lists, lists help us in organizing what is otherwise overwhelming. 5  Expert  Secrets That Guarantee  List Post Success How long should your list post be? How can you make your list post as viral as possible? How do you get your list post read? 1.  The magic number for lists posts seems to be 25. According to the (fascinating) research on the RJMetrics blog, a list post of 25 is the number that gets the most hits on Buzzfeed. RJMetrics ran several tests to determine which posts were top in search results and which ones were shared the most. After the averages were taken, the winner was 25 (or thereabouts). 2. Odd or rounded numbers are best. In the same research, RJMetrics learned that numbered lists that ended with a 5 or a 0 received better traffic  (Oops.) This preference for 5 and 0 is backed up by a study done by Robert M. Schindler of Rutgers University. Schindler discovered that we prefer and understand those round numbers most of all. But wait. After studying 300 articles, online instruction specialist  Abreena Tompkins discovered that students learn better when things are grouped in odd numbers. She described how the brain best remembers no more than nine items in a group, with three or five being an optimal amount. According to Tompkins,  odd numbers work better than even numbers. If you’re going to give students a list of six things to do, make it one, two, three, whitespace, four, five, six. The brain responds to whitespace because the brain processes things in groups. Perhaps the takeaway here is that our brain likes simple groupings, and that for small lists, odd numbers are best. Once your list heads past nine, you should start aiming for the round numbers ending in 5 and 0. The best list post has an odd or rounded number in the title.3.  Successful headlines have  emotional words  in them. Merely assembling a list of items isnt going to get it read. You will always  need a compelling headline to sell it. There is still no getting away from the need to use emotional words in your headlines. You still must work on finding the best possible headline, even if you are writing a headline with a list number in it.  So is there a list post blog headline formula that works? Blogger Steve Davis came up with one: (odd number) (adjective) (mistakes/tips/insights/shortcuts) for (achieving/avoiding) (desired outcome/disaster) And then Davis wisely recommends you be cautious in using a formula because formulas are not where greatness comes from.  Good headlines are still good headlines, whether youre using the magic of the list post or not. 4. Use the actual number, not the word. I struggled, when I first started blogging, to abandon the AP Style Guide and use a numeral instead of the word in a headline. It still bothers me quite a bit, but thats the way online content handles numbered headlines now. Why do we write 10 Reasons instead of Ten Reasons? Lazy brains and character counts, thats why. We see and comprehend 10 better than ten. We can save a character or two when we use the number 3 instead of writing three. 5. List item content is inversely related to the number. Hubspot makes a great point  by stating that the best list posts have the right balance between list length and list item explanation. In other words, the longer your list is, the shorter the content under each item should be. A list post of five can get away with several paragraphs, but could you imagine a list post of 100 doing the same? Youd never finish!

IT strategy and information system Essay Example | Topics and Well Written Essays - 1500 words

IT strategy and information system - Essay Example It is done so on the account of fact that it requires skills and adapatibilty against the excessively advanced knowledge that the company may seek. The goal pursuit requires clear determination of the path to be followed. This is a generic rule for any operation or task so undertaken. The same rule applies to the field of digital technology. However, often the instances are seen where the path so adopted doesnot provide the desired results. This failure to reach the desired may be on account of number of factors. Some of these may be the result of internal poor performance, others possibly due to the external factors within the supply chain network (McKeen and Smith). Ther internal dyanmics relating to the various variables such as the relationship between the partners, ownership versus partnerships, lag in catching on the new trends, innovations and counter innovations from the other parties. Another important factor that often leads to the failure in terms of goals accomplishment is that of the financial crunch or inability to meet up the expenditure against the given originally set forth goals and objectives.All these constraints demand setting a plan that is realistic and takes into account the facts that are aforementioned and ensure that it is a failure proof plan. Technology road maps come along with set of constraints, restrictions which makes the overall planning relatively difficult and hard to accomplish. Preparing for the alternate route often comes along with external constraints and costs in terms of technological road map planning process. The difference between a generic plan and a technology plan is the phases that follow after the initial phase. This often results in deviation from the original path set forth. In order to ensure the technology plan is a successful one, the leading steps need to be taken into account with regard to the due actions. Following the

Understanding of Augustine Essay Example | Topics and Well Written Essays - 250 words

Understanding of Augustine - Essay Example The natural evil has no distinction with the human evil in the God’s treatment of evil. Human blames God partly for the prevailing evil due to the degree of freedom bestowed upon men by God. Rubenstein points out that its God’s failure to allow for the rise of evil especially during the holocaust in Europe. The philosophical argument about the design of the world and the maker of the world and due to the prevailing evils, it points out that there is flaw in both the design of the world and its designer, who is god. It expounds on the controversy of the existence of a holy, caring and righteous God in which evil also exist. It’s difficult to comprehend the existence of a benevolent, omnipotent, omnipresent and omniscient God together with the evils on the cosmos (Abel, 72). Evil therefore presents many problems to the world. It’s both difficult to argue and understand further the co-existence of God’s majesty with evil on the same cosmos. Also, the evil has presented serious mystery in its relationship to the designer and design of

Development of Credit Facilities in Sierra Leone

Development of Credit Facilities in Sierra Leone Chapter 1 This study is on the creation of credit facilities to Small and Medium Size Enterprises in Sierra Leone with special focus on the construction industries. 1.1 Background to the Economy of Sierra Leone Sierra Leone is a relatively small country, on the West Coast of Africa with an area of approximately 28,000square miles. The estimated population is 5.5 million inhabitants, 30% of whom resides in the western area of the country according to recent census in 2006. The state of the country’s economy, immediately after independence from the British Colony in 1961 up to the 1970’s, was quite satisfactory in terms of performance. The exchange rate between the Leone and other foreign currencies was relatively good. More so, the British Pound Sterling was exchanged at One pound ( £1) to One Leone (Le1). The inflation rate was extremely low. The country’s earnings from exports were very much attractive, with Diamond export accounting for well over 50% of the country’s foreign exchange earnings. This was closely followed by cash crop exports such as Cocoa, coffee, oil palm, piassava and chillies. The country’s external debt position at this time was not high, Between 1972 to 1975, the economy started experiencing down turn that was mainly due to external factors, such as the famous oil price shock in 1973. Naturally, the 1980 Organisation of Africa Unity (OAU) summit that was hosted by the government of Sierra Leone fuelled the debt crisis in Sierra Leone. Because of the foreign exchange scarcity in the country, the credit agreement between domestic importers and their business partners aboard collapsed. In 1988, the country was forced to devalue her currency. Between 1992 and 1994, Sierra Leone successfully implemented an adjustment program supported by the International Monetary Fund (IMF) under the Right Accumulation Program (RAP). The World Bank also supported the program through the Reconstruction of Import Credit (RIC) in 1992 and the Structural Adjustment Credit (SAC) in 1993. Following the successful implementation of the RAP, the IMF approved a three year arrangement support under Enhanced Structural Adjustment Facility (ESAF). The implementation of the first annual program was disrupted by the escalation of the rebel activities in 1995. With the return of democracy in 1996, the IMF supported the economic recovery program adopted by the new Government with a second annual program under the ESAF. Poverty intensified with real per capita declining to US$142 in 2000. Since then Sierra Leone has been classified as the poorest country in the world and ranks at the bottom of the United Nations Development Programme (UNDP) Human Development Index. The growth in the economy has been underpinned by broad recovery in Agriculture, mining, manufacturing, construction and the service sector. The economy of the Country continues to worsen in early 1992 when the civil unrest started which causes untold sufferings on humans and the entire country. Many people were forced out of their houses and eventually became displaced persons and refugees in their own country and neighbouring country like Guinea, The Gambia and Ghana. Almost all segments of the business economy collapsed including banking and lending institutions. It was then the problems of growth in economy worsen and every thing completely deteriorated and collapsed. The almost 11 years of civil unrest ended in March 2002. The end of the war actually opens the door for a new beginning, for new economic growth and prosperity in the face of peace and unity. The situation has recently worsened because of the credit crunch faced by many of the world famous banking institutions and Sierra Leone has not been any exceptions. The effect coupled with other factors has created more gaps for banking institutions to provide loans to small and medium enterprises. In a press release from Prlog Dec. 15, 2008 by Robin Trehan as quoted â€Å"SMEs represent over ninety-nine percent of the country’s employers. While it is essential that these businesses obtain the necessary funding to remain active, they are often the first to suffer when financial crisis hits. Banks already facing financial hardship often deem SMEs as too risky to finance. Credit terms are becoming increasingly harder and qualifying for financing is subject to much stricter guidelines. The re are things that SMEs can do, however, to increase their chances of finding financing†. 1.2 Statement of the Problem The term credit in this thesis refers to an amount or sum placed at a person’s disposal by a bank and usually to be repaid with interest within a given period of time. Small and Medium Size Enterprises (SME) is very important in terms of the dynamic role in the development of the private sector in Sierra Leone. The SME’s are regarded as an engine for any economic growth and development in any country. They provide opportunities for job creation and expansion in the physical reconstruction of the economy especially for a post war development country like Sierra Leone. Majority of the physical infrastructures ranging from housing, office buildings and business structures were all destroyed during the civil unrest. These structures need to be reconstructed for the economy to grow and become prosper. Today many construction companies or firms have emerged to assist in the rehabilitation and reconstruction. While there may be some of the construction companies who have existed of years, it is also true that majority of these construction companies are new ones who are just coming up to help and provide their expertise in the development of Sierra Leone. But yet still, it is a challenge for many of these companies to adequately involve in the process of rehabilitation and reconstruction simply because they cannot get the required finance in the form of overdraft or loans, or provide the necessary collateral for the banks as required, making them less competitive. In Sierra Leone the performance of SME’s over the years has been very poor which is due to the fact that the creation of credit from the banks which is an essential stimulant for private investment in the construction industries has been grossly under performing. This is one of the reasons for poor performance of the economy in terms of growth in most developing countries including Sierra Leone. Construction companies have not been able to access huge funds by way of loan over the years from the banking and other financial institutions, mainly due to lack of confidence in the private sector as a result of problems like moral hazards and the absence of collateral security and the lack of experience in construction engineering. 1.3 Justification of the Study The importance of the construction industries in the process of rehabilitation and reconstruction of the war towns in Sierra Leone cannot be over-emphasized. During the war there was so much destruction of infrastructures in the country, now that there is peace there is high need for reconstructions and the development of new roads and structures to aid national growth. International organisations like the International Monetary Fund (IMF), World Bank, African Development Bank (ADB) main focus is to assist Small Medium Size Enterprises (SME) in developing countries gain strong financial base. It had been felt that SMEs employ majority of the work force in the developing countries, therefore, they have realised that when SME become financially stable the economy of the nation will be better and that the citizens will be able to live a comfortable life. The role of commercial banks and other financial institutions in private sector development and the assessment of their overall performance in terms of economic growth and development has not received much of the attention by researchers. The central bank maintaining interest rate at high level has greatly contributed to discourage SMEs from borrowing from retail banks and other financial institution for investment purposes. This is one of the reasons why most SMEs are under developed. Besides commercial banks are requesting for very stiff conditions to access loan by the private sector. A study on the provision of credit to construction companies for investment towards economic growth has not been studied in greater detail by previous researchers. This among others, gave me the urge to probe into the activities of the commercial banks and other financial institutions in the creation of credit to construction companies in Sierra Leone, This study is to help government and other professionals as well as other stakeholders, to grasp fully the implications of credit refusal to small and medium size enterprises and how it will affect the development of the nation. The result of this study is hope to enable banking and other financial institutions, local and national government and other stakeholders to device concrete ways by which small and medium size enterprises can easily get access to credit to undertake construction programmes. 1.4 Objectives of the study The main aim of the study is to assess the implications of credit creations by the banks and other financial institutions to Small and Medium Size Enterprises with special focus on the Construction Industries for economic growth and development in Sierra Leone. The specific objectives are: To determine the extent to which banks have been contributing to the development of the construction industries in Sierra Leone. To examine some of the reasons responsible for the inability of the construction industries to solicit loans from the banks and other financial institutions for the purpose of investment. To establish reasons for the reluctance of the banking and other financial institutions to provide the much needed funds for private sector development. To examine the reasons for the reluctance of the banking sector to provide the much needed funds for SME in the construction industries for development, even though SME’s are regarded as the engine of economic growth. 1.5 Research Questions: Certain research questions will be drawn up for proper examination of this objective. These include: To what extent do commercial banks provide funds to Small and Medium Size Enterprises in the construction Industries? What are the main problems encountered by the construction companies in terms of securing loans and overdrafts from the commercial banks? What is responsible for the low investment of the private sector (SME’s) in Sierra Leone? What is the role of the central bank in facilitating credit creation for SME’s in the pursuit of development in Sierra Leone? What is the role of the Government ministry in the area of infrastructural developmental plans for Sierra Leone? The study will make use of secondary data received from the Bank of Sierra Leone, Commercial Banks and some of the registered construction companies in Sierra Leone. The study will try to reveal the reasons for the constraints Small and Medium size Enterprises are facing in securing credit facilities from the banks. Interviews will be conducted with senior officers of both the banking industries and construction sectors, together with government officers in the area of national development for the country. 1.6 Definition of Operational Terms: 1. Credit Creation: Credit creation is the multiple expansions of banks demand deposits. It is an open secret now that banks advance a major portion of their deposits to the borrowers and keep smaller parts of deposits to the customers on demand. 2. Venture Capital: Venture Capital is the name given to equity finance provided to support new, expanding and entrepreneurial businesses. Venture capitalists usually prefer to take a close interest in the business that is the subject of their investment. This could involve taking part in decision made by the business. Funds provided by venture capitalist are often referred to as private capital.(Mclaney E, 2003) 3. Gearing: Small businesses are in a fundamentally different position from that of the larger one on the issue of gearing. Financial risk to which capital gearing gives rise tends to emphasise operating risk, which will be present with or without gearing. Small businesses are more exposed to financial risk than public liability companies. (Mclaney, 2003) 4. Bank and Institutional Debt: Long term loans are available from banks and other financial institutions at both fixed and floating interest rates, provided the issuing bank is convinced that the purpose of the loan is a good one. The cost of bank loan is usually a floating rate of 3-6 percent above the base rate, depending on the perceived risk of the borrowing company. The issuing bank charges an arrangement fee on bank loans, which are usually secured by a fixed and floating charge, the nature of the charge depending on the availability of assets of good quality to act as security. A repayment schedule is often agreed between the bank and the borrowing company, structured to meet the specific needs of the borrower and in accordance with the lending policies of the bank. (Watson D Head A, 2007) 5. Security –the Bank’s Perspective: A bank has little to lose and much to gain by taking security for a loan. A bank’s solicitor should check that the borrower and any other party providing security have capacity to do so. (The company act 1989, prima facie, a company could pursue only the objects for which its memorandum stated it was incorporated) 6. Security – the Borrower’s Perspective: It is often difficult for a borrower to argue against a reasonable request for security. However, some borrowers will be contractually prohibited from providing security by a negative pledge in a document to which they are already a party. Specialised lending for financing a project will always be secured over the asset or project in question. (Adams D, 2006) 7. Cash Flow Statements for Small Companies: Financial Report Standard (FRS1) prescribes a format for cash flow statements. Except for very small companies, all companies are required to prepare a cash flow statement for each accounting period. There are two approaches available under the standard; the direct method which shows the operating cash receipts and payments summing to the net cash flow from operating activities, and the indirect method which identifies the net cash flow via reconciliation to operating profit. (Wood F, 2002). CHAPTER 2 Literature Review 2.0 Introduction The purpose of this chapter is to make a review of related literature on Small and Medium isze Enterprises and the Creation of Credit in the Construction Industry. With these literatures the researcher will have a better understanding of the study, as well as what has already been done on it in the form of previous research. 2.2 Definition of Small and Medium Size Enterprises A business can be considered small on basis of predetermined criteria such as the number of employees, annual turnover or capital employed. In the late 1990s, it was estimated that small businesses with fewer than 50 employees accounted for 99 per cent of all UK business, almost 50 per cent of non government employment and 42 per cent of turnover. Small firms have become a focus for governmental policy at both national and intergovernmental level. Bolton in his report in 1971 identified three main characteristics of a small firm: were independently owned The business securities are not quoted in any established capital market that is they are not traded in the efficient market. were managed in a personalised way- The ownership of the business’s equity and hence its control lie in the hands of a small close knit-group; that is it is a family type business. possessed a limited share of the total market 2.3 Nature of Small and Medium Size Enterprises The Bolton report, the first official government inquiry into small firms attempted to establish standard definitions of small firms for particular sector of industry based on numerical indicators of size such as sales or number of employees. A firm with 250 employees in a labour intensive industry may still be a small firm. (Brown, 1987) Criteria for Small and Medium Size Enterprises Size Category Number of Employees Maximum Annual Turnover (euros) Maximum Balance balance sheet total Micro Firm 0 -9 2 million euros 2 million Small Firm 10 – 49 10 million euros 10 million Medium-sized Firm 50 – 249 50 million 43 million 2.4 Objectives of Small and Medium Size Enterprises In SME’s the managers and the shareholders are likely to be substantially the same person or at least closely connected with one another. Thus agency problems, and their potential associated costs, are likely to have little or possibly no impact on the typical small business. Because of the elimination of agency gap, most managers of SME’s are shareholder; they would make decisions following a pure wealth-maximising goal more determinedly than would be the case in the typical large enterprise. The motives of managers or owners of small businesses are diverse. These motives might be the desire to experience the satisfaction of building up a business, a desire to lead a particular way of life, or a desire to keep someone (perhaps family) tradition alive. Since it is possible for managers to know the personal objectives of shareholders of small business, decisions can probably be made with these in mind. Both large and small businesses that makes a series of decisions causing the wealth to diminish, will sooner or later fail. Wealth maximisation goal is very important to small business and cannot be ignored. 2.5 Organisation of Small and Medium Enterprises The research will consider Small and Medium Size Enterprises in the construction industries that are organised as private limited companies. According to Mclaney (2003) private companies need be of no minimum size; public companies must issue at least  £50,000 of nominal share capital, of which 25% must be paid up. There is no upper limit on the size of a private company. Private companies are entitled to restrict the transfer of their shares; that is it is possible for the company’s Articles of Association to contain a clause giving the directors the power to refuse to register a transfer, at their discretion. While private companies must publish annual accounts, the volume of details is rather less than that which the law requires of public companies. 2.6 Sources of Finance for Small and Medium Size Enterprises Several inquires have dealt with the financing of SMEs and each of these enquires discovered, to a greater extent, that small businesses find it more difficult and more expensive to raise external finance. A particular problem faced by small businesses in their quest for equity capital is the lack of an `exit route’. Generally investors require that there be some way of liquidating their investment before they are prepared to commit funds to it. A number of schemes have been introduced to help small businesses: 2.6.1. The loan Guarantee Scheme (LGS) as first introduced in 1981 to cover situations were potential borrowers were unable to provide sufficient collateral or where the bank deem the risk of lending unacceptable. 2.6.2. The Enterprise Investment Scheme (EIS) – This scheme replaced the Business Expansion Scheme (BES) and it is designed to help small unquoted companies to raise equity finance from business angels 2.6.3.The Venture Capital Trust (VCT) – The trust was introduced in 1995 to encourage individuals to invest in smaller, unlisted trading companies. Venture Capital is the name given to equity finance provided to support new, expanding and entrepreneurial businesses. Venture capitalists usually prefer to take a close interest in the business. This could involve taking part in decision made by the business. Funds provided by venture capitalist are often referred to as private capital.(Mclaney E, 2003) 2.6.4. The Enterprise Fund (EF) it was announced in the competitiveness white paper in 1998 and is designed to help the financing of small businesses with growth potential. 2.6.5. The National Business Angel Network (NBAN) it was launched in 1999 to connect ‘business angels’ with companies seeking equity capital 2.6.6. The late payment of Commercial Debts (Interest) act 1998 gives certain small businesses a statutory right to claim interest from large businesses and the public sector on late payment of commercial debts. 2.7 Gearing Small businesses are in a fundamentally different position from that of the larger one on the issue of gearing. Financial risk to which capital gearing gives rise tends to emphasise operating risk, which will be present with or without gearing. Small businesses are more exposed to financial risk than public liability companies.(Mclaney,2003) 2.8 Help and Advice to Small Businesses One of the major barriers faced by SMEs is the lack of information, help and advice on their operations. Recent initiative to improve this sphere includes: 2.8.1. The business link network – organised in 1993 as a ‘one stop shop’ for information and advice to SMEs. It brings together the services of major business development services in the single accessible location. 2.8.2. The Enterprise Zone – launched in 1997 as a definitive internet site for business information. It provides help on a whole range of business issues. 2.8.3. The Information Society Initiative/Interforum E-Commerce Award – launched in 1999 as part of government’s e-commerce strategy. It is essentially an award scheme to recognise and reward best practice in the use of electronic trading among smaller firms. 2.9 Bank and Institutional Debt Long term loans are available from banks and other financial institutions at both fixed and floating interest rates, provided the issuing bank is convinced that the purpose of the loan is a good one. The cost of bank loan is usually a floating rate of 3-6 percent above the base rate, depending on the perceived risk of the borrowing company. The issuing bank charges an arrangement fee on bank loans, which are usually secured by a fixed and floating charge, the nature of the charge depending on the availability of assets of good quality to act as security. A repayment schedule is often agreed between the bank and the borrowing company, structured to meet the specific needs of the borrower and in accordance with the lending policies of the bank. (Watson D Head A, 2007) 2.10 Security –the Bank’s Perspective A bank has little to lose and much to gain by taking security for a loan. A bank’s solicitor should check that the borrower and any other party providing security have capacity to do so. (The company act 1989, prima facie, a company could pursue only the objects for which its memorandum stated it was incorporated) 2.11 Security – the Borrower’s Perspective It is often difficult for a borrower to argue against a reasonable request for security. However, some borrowers will be contractually prohibited from providing security by a negative pledge in a document to which they are already a party. Specialised lending for financing a project will always be secured over the asset or project in question. (Adams D,2006) 2.12 Working Capital Problems of the Small Business Working capital is the difference between current assets over current liabilities. The amount invested by businesses in working capital is often high in proportion to the total assets employed. It is important that these amounts are managed properly. It is often claimed that many small businesses suffer from a lack of capital and, where this is the case, tight control over working capital investment becomes critical. There are evidence, however, that SB are not very good at managing their working capital, and this has been cited as the major cause of their high failure rate compared with that of large businesses. 2.13 Credit Management Small businesses don’t have the resources to manage their trade debtors (account receivables) effectively. Most small businesses don’t have a credit control department. Small business also lack proper debt collection procedures, such as prompt invoicing and sending out regular statements. These risks probably tend to increase where there is an excessive concern for growth. In an attempt to increase sales, small businesses may be too willing to extend credit to customers that are poor credit risk Lack of market power is another issue for small businesses. They find themselves in a weak position when negotiating credit terms with larger businesses. When big customer exceeds the terms of credit, the small supplier may feel inhibited from pressing the customer for payment in case future sales are lost. (A survey undertaken by the Credit Management Research Centre (CMRC) during April and June, 2003, indicates that small businesses are likely to have to wait an average of 60 days for their trade debtors to pay. 2.14 Cash Flow Statements for Small Companies Financial Report Standard (FRS1) prescribes a format for cash flow statements. Except for very small companies, all companies are required to prepare a cash flow statement for each accounting period. There are two approaches available under the standard; the direct method which shows the operating cash receipts and payments summing to the net cash flow from operating activities, and the indirect method which identifies the net cash flow via reconciliation to operating profit.(Wood F,2002) Credit Creation 2.15 Definition of Credit Creation The BNET business dictionary defines credit creation as the collective ability of lenders to make money available to borrowers. Credit creation is the multiple expansions of banks demand deposits. Banks advance a major portion of their deposits to the borrowers and keep smaller parts of deposits to customers on demand. The tendency on the part of commercial banks to expand their demand deposits as a multiple of their excess cash reserve is called creation of credit. 2.16 Functions of Financial Intermediation in Credit Creation Financial intermediation is the process of channelling funds between those who wish to lend or invest and those who wish to borrow or require investment funds. Financial intermediaries act as principal, creating new financial assets and liabilities. They do not act solely as agents, charging a commission for their services. (The Monetary and Financial System-CIB/BPP Publication 1993 Edition) Any institution standing between the ultimate provider of funds and the ultimate user of funds is engaged in financial intermediation. There are many types of institutions and other organisations that act as intermediaries in matching firms and individuals who need finance with those who wish to invest. These institutions also provide other services which are non-intermediary services like financial advisory services, fund management services and advice to undertakers and mergers provider by merchant banks. Some of the organisation that acts as financial intermediaries is as follows: 2.16.1 Clearing Banks – this bank participate in system which simplifies daily payment so that all the thousands of individual customer payments are reduced to a few transfers of credit between the banks. They offer various accounts to investors and provide large amount of short to medium-term loans to the business sector and the personal sector. The work of these institutions can best be understood through a consideration of the main items in their balance sheet. 2.16.2 Clearing Bank Liabilities – The money from the banks responsible comes chiefly from their customer’s sight and time deposits- mostly current and deposit accounts with which most people are familiar. An important additional item relates to certificates of deposit. These are issued generally for a medium amount of  £50,000 and a maximum of  £500,000 with an initial term to maturity of from three months to five years. Clearing Bank Assets Customers’ money is re-lent in a variety of ways. The main aim of the bank is to have a range of lending instruments of varying terms so that money can be recovered quickly and yet, at the same time, earn the maximum return. 2.16.3 Investment Banks / Merchant Banks The investment banks or Merchant banks have some functions that they undertake: 2.16.3.i Financial Advice to Business Firms Few manufacturing or commercial companies of any size can now afford to be without the advice of a merchant bank. Such advice is necessary in order to obtain investment capital, to invest surplus funds, to guard against takeover, or to take over others. Increasingly, the merchant banks have themselves become activity involved in the financial management of their business client and have had an influence over the direction these affairs have taken. 2.16.3.ii Providing Finance to Business Merchant banks also compete in the services of leasing, factoring, hire-purchase and general lending. They are also the gateway to the capital market for long-term funds because they are likely to have specified departments handling capital issues as ‘issuing houses’. 2.16.4 Foreign Trade A lot of merchant bank are active in the promotion of foreign trade by providing marine insurance, credits, and assistance in appointing foreign agents and arranging foreign payments. Merchant bank is essentially in the general business of creating wealth and of helping those who show that they are capable of successful business enterprise. It is expected that merchant banks will operate without the large branch network necessary for a clearing bank, they work closely with their clients and be more ready to take business risk and promote business enterprise than clearing bank. 2.16.5 Building Societies These take deposits from the household sector and lend to individuals buying their own homes. They have recently grown rapidly in the UK and now provide many of the services offered by clearing banks. Over the years many have converted to banks. 2.16.6 Finance Companies/Houses – Providing medium-term instalment credits to the business and personal sector. These are usually owned by business sector firms or by other financial itermediaries. 2.17 Services Provided by Financial Institutions Financial institutions are organisations that provide services in connection with one or more of the following:- Financial intermediation, linking ultimate providers of funds with ultimate users and creating new financial assets in the process. Exchanging financial assets on behalf of their customers, that is acting as brokers or agents for clients. Exchanging financial assets for their own accounts proprietary dealers, as they are termed. Helping to create financial assets for their customers, and then selling these assets to others in the market underwriting new share issues, for example Providing investment advice to others, example to people seeking a personal pension or to firms on mergers and takeovers. Fund management- managing the whole or part of a pension fund, for example some large non-financial companies have their own financial subsidiaries. In the United Kingdom Ford Motor Finance and Mark and Spencer Finance Se Development of Credit Facilities in Sierra Leone Development of Credit Facilities in Sierra Leone Chapter 1 This study is on the creation of credit facilities to Small and Medium Size Enterprises in Sierra Leone with special focus on the construction industries. 1.1 Background to the Economy of Sierra Leone Sierra Leone is a relatively small country, on the West Coast of Africa with an area of approximately 28,000square miles. The estimated population is 5.5 million inhabitants, 30% of whom resides in the western area of the country according to recent census in 2006. The state of the country’s economy, immediately after independence from the British Colony in 1961 up to the 1970’s, was quite satisfactory in terms of performance. The exchange rate between the Leone and other foreign currencies was relatively good. More so, the British Pound Sterling was exchanged at One pound ( £1) to One Leone (Le1). The inflation rate was extremely low. The country’s earnings from exports were very much attractive, with Diamond export accounting for well over 50% of the country’s foreign exchange earnings. This was closely followed by cash crop exports such as Cocoa, coffee, oil palm, piassava and chillies. The country’s external debt position at this time was not high, Between 1972 to 1975, the economy started experiencing down turn that was mainly due to external factors, such as the famous oil price shock in 1973. Naturally, the 1980 Organisation of Africa Unity (OAU) summit that was hosted by the government of Sierra Leone fuelled the debt crisis in Sierra Leone. Because of the foreign exchange scarcity in the country, the credit agreement between domestic importers and their business partners aboard collapsed. In 1988, the country was forced to devalue her currency. Between 1992 and 1994, Sierra Leone successfully implemented an adjustment program supported by the International Monetary Fund (IMF) under the Right Accumulation Program (RAP). The World Bank also supported the program through the Reconstruction of Import Credit (RIC) in 1992 and the Structural Adjustment Credit (SAC) in 1993. Following the successful implementation of the RAP, the IMF approved a three year arrangement support under Enhanced Structural Adjustment Facility (ESAF). The implementation of the first annual program was disrupted by the escalation of the rebel activities in 1995. With the return of democracy in 1996, the IMF supported the economic recovery program adopted by the new Government with a second annual program under the ESAF. Poverty intensified with real per capita declining to US$142 in 2000. Since then Sierra Leone has been classified as the poorest country in the world and ranks at the bottom of the United Nations Development Programme (UNDP) Human Development Index. The growth in the economy has been underpinned by broad recovery in Agriculture, mining, manufacturing, construction and the service sector. The economy of the Country continues to worsen in early 1992 when the civil unrest started which causes untold sufferings on humans and the entire country. Many people were forced out of their houses and eventually became displaced persons and refugees in their own country and neighbouring country like Guinea, The Gambia and Ghana. Almost all segments of the business economy collapsed including banking and lending institutions. It was then the problems of growth in economy worsen and every thing completely deteriorated and collapsed. The almost 11 years of civil unrest ended in March 2002. The end of the war actually opens the door for a new beginning, for new economic growth and prosperity in the face of peace and unity. The situation has recently worsened because of the credit crunch faced by many of the world famous banking institutions and Sierra Leone has not been any exceptions. The effect coupled with other factors has created more gaps for banking institutions to provide loans to small and medium enterprises. In a press release from Prlog Dec. 15, 2008 by Robin Trehan as quoted â€Å"SMEs represent over ninety-nine percent of the country’s employers. While it is essential that these businesses obtain the necessary funding to remain active, they are often the first to suffer when financial crisis hits. Banks already facing financial hardship often deem SMEs as too risky to finance. Credit terms are becoming increasingly harder and qualifying for financing is subject to much stricter guidelines. The re are things that SMEs can do, however, to increase their chances of finding financing†. 1.2 Statement of the Problem The term credit in this thesis refers to an amount or sum placed at a person’s disposal by a bank and usually to be repaid with interest within a given period of time. Small and Medium Size Enterprises (SME) is very important in terms of the dynamic role in the development of the private sector in Sierra Leone. The SME’s are regarded as an engine for any economic growth and development in any country. They provide opportunities for job creation and expansion in the physical reconstruction of the economy especially for a post war development country like Sierra Leone. Majority of the physical infrastructures ranging from housing, office buildings and business structures were all destroyed during the civil unrest. These structures need to be reconstructed for the economy to grow and become prosper. Today many construction companies or firms have emerged to assist in the rehabilitation and reconstruction. While there may be some of the construction companies who have existed of years, it is also true that majority of these construction companies are new ones who are just coming up to help and provide their expertise in the development of Sierra Leone. But yet still, it is a challenge for many of these companies to adequately involve in the process of rehabilitation and reconstruction simply because they cannot get the required finance in the form of overdraft or loans, or provide the necessary collateral for the banks as required, making them less competitive. In Sierra Leone the performance of SME’s over the years has been very poor which is due to the fact that the creation of credit from the banks which is an essential stimulant for private investment in the construction industries has been grossly under performing. This is one of the reasons for poor performance of the economy in terms of growth in most developing countries including Sierra Leone. Construction companies have not been able to access huge funds by way of loan over the years from the banking and other financial institutions, mainly due to lack of confidence in the private sector as a result of problems like moral hazards and the absence of collateral security and the lack of experience in construction engineering. 1.3 Justification of the Study The importance of the construction industries in the process of rehabilitation and reconstruction of the war towns in Sierra Leone cannot be over-emphasized. During the war there was so much destruction of infrastructures in the country, now that there is peace there is high need for reconstructions and the development of new roads and structures to aid national growth. International organisations like the International Monetary Fund (IMF), World Bank, African Development Bank (ADB) main focus is to assist Small Medium Size Enterprises (SME) in developing countries gain strong financial base. It had been felt that SMEs employ majority of the work force in the developing countries, therefore, they have realised that when SME become financially stable the economy of the nation will be better and that the citizens will be able to live a comfortable life. The role of commercial banks and other financial institutions in private sector development and the assessment of their overall performance in terms of economic growth and development has not received much of the attention by researchers. The central bank maintaining interest rate at high level has greatly contributed to discourage SMEs from borrowing from retail banks and other financial institution for investment purposes. This is one of the reasons why most SMEs are under developed. Besides commercial banks are requesting for very stiff conditions to access loan by the private sector. A study on the provision of credit to construction companies for investment towards economic growth has not been studied in greater detail by previous researchers. This among others, gave me the urge to probe into the activities of the commercial banks and other financial institutions in the creation of credit to construction companies in Sierra Leone, This study is to help government and other professionals as well as other stakeholders, to grasp fully the implications of credit refusal to small and medium size enterprises and how it will affect the development of the nation. The result of this study is hope to enable banking and other financial institutions, local and national government and other stakeholders to device concrete ways by which small and medium size enterprises can easily get access to credit to undertake construction programmes. 1.4 Objectives of the study The main aim of the study is to assess the implications of credit creations by the banks and other financial institutions to Small and Medium Size Enterprises with special focus on the Construction Industries for economic growth and development in Sierra Leone. The specific objectives are: To determine the extent to which banks have been contributing to the development of the construction industries in Sierra Leone. To examine some of the reasons responsible for the inability of the construction industries to solicit loans from the banks and other financial institutions for the purpose of investment. To establish reasons for the reluctance of the banking and other financial institutions to provide the much needed funds for private sector development. To examine the reasons for the reluctance of the banking sector to provide the much needed funds for SME in the construction industries for development, even though SME’s are regarded as the engine of economic growth. 1.5 Research Questions: Certain research questions will be drawn up for proper examination of this objective. These include: To what extent do commercial banks provide funds to Small and Medium Size Enterprises in the construction Industries? What are the main problems encountered by the construction companies in terms of securing loans and overdrafts from the commercial banks? What is responsible for the low investment of the private sector (SME’s) in Sierra Leone? What is the role of the central bank in facilitating credit creation for SME’s in the pursuit of development in Sierra Leone? What is the role of the Government ministry in the area of infrastructural developmental plans for Sierra Leone? The study will make use of secondary data received from the Bank of Sierra Leone, Commercial Banks and some of the registered construction companies in Sierra Leone. The study will try to reveal the reasons for the constraints Small and Medium size Enterprises are facing in securing credit facilities from the banks. Interviews will be conducted with senior officers of both the banking industries and construction sectors, together with government officers in the area of national development for the country. 1.6 Definition of Operational Terms: 1. Credit Creation: Credit creation is the multiple expansions of banks demand deposits. It is an open secret now that banks advance a major portion of their deposits to the borrowers and keep smaller parts of deposits to the customers on demand. 2. Venture Capital: Venture Capital is the name given to equity finance provided to support new, expanding and entrepreneurial businesses. Venture capitalists usually prefer to take a close interest in the business that is the subject of their investment. This could involve taking part in decision made by the business. Funds provided by venture capitalist are often referred to as private capital.(Mclaney E, 2003) 3. Gearing: Small businesses are in a fundamentally different position from that of the larger one on the issue of gearing. Financial risk to which capital gearing gives rise tends to emphasise operating risk, which will be present with or without gearing. Small businesses are more exposed to financial risk than public liability companies. (Mclaney, 2003) 4. Bank and Institutional Debt: Long term loans are available from banks and other financial institutions at both fixed and floating interest rates, provided the issuing bank is convinced that the purpose of the loan is a good one. The cost of bank loan is usually a floating rate of 3-6 percent above the base rate, depending on the perceived risk of the borrowing company. The issuing bank charges an arrangement fee on bank loans, which are usually secured by a fixed and floating charge, the nature of the charge depending on the availability of assets of good quality to act as security. A repayment schedule is often agreed between the bank and the borrowing company, structured to meet the specific needs of the borrower and in accordance with the lending policies of the bank. (Watson D Head A, 2007) 5. Security –the Bank’s Perspective: A bank has little to lose and much to gain by taking security for a loan. A bank’s solicitor should check that the borrower and any other party providing security have capacity to do so. (The company act 1989, prima facie, a company could pursue only the objects for which its memorandum stated it was incorporated) 6. Security – the Borrower’s Perspective: It is often difficult for a borrower to argue against a reasonable request for security. However, some borrowers will be contractually prohibited from providing security by a negative pledge in a document to which they are already a party. Specialised lending for financing a project will always be secured over the asset or project in question. (Adams D, 2006) 7. Cash Flow Statements for Small Companies: Financial Report Standard (FRS1) prescribes a format for cash flow statements. Except for very small companies, all companies are required to prepare a cash flow statement for each accounting period. There are two approaches available under the standard; the direct method which shows the operating cash receipts and payments summing to the net cash flow from operating activities, and the indirect method which identifies the net cash flow via reconciliation to operating profit. (Wood F, 2002). CHAPTER 2 Literature Review 2.0 Introduction The purpose of this chapter is to make a review of related literature on Small and Medium isze Enterprises and the Creation of Credit in the Construction Industry. With these literatures the researcher will have a better understanding of the study, as well as what has already been done on it in the form of previous research. 2.2 Definition of Small and Medium Size Enterprises A business can be considered small on basis of predetermined criteria such as the number of employees, annual turnover or capital employed. In the late 1990s, it was estimated that small businesses with fewer than 50 employees accounted for 99 per cent of all UK business, almost 50 per cent of non government employment and 42 per cent of turnover. Small firms have become a focus for governmental policy at both national and intergovernmental level. Bolton in his report in 1971 identified three main characteristics of a small firm: were independently owned The business securities are not quoted in any established capital market that is they are not traded in the efficient market. were managed in a personalised way- The ownership of the business’s equity and hence its control lie in the hands of a small close knit-group; that is it is a family type business. possessed a limited share of the total market 2.3 Nature of Small and Medium Size Enterprises The Bolton report, the first official government inquiry into small firms attempted to establish standard definitions of small firms for particular sector of industry based on numerical indicators of size such as sales or number of employees. A firm with 250 employees in a labour intensive industry may still be a small firm. (Brown, 1987) Criteria for Small and Medium Size Enterprises Size Category Number of Employees Maximum Annual Turnover (euros) Maximum Balance balance sheet total Micro Firm 0 -9 2 million euros 2 million Small Firm 10 – 49 10 million euros 10 million Medium-sized Firm 50 – 249 50 million 43 million 2.4 Objectives of Small and Medium Size Enterprises In SME’s the managers and the shareholders are likely to be substantially the same person or at least closely connected with one another. Thus agency problems, and their potential associated costs, are likely to have little or possibly no impact on the typical small business. Because of the elimination of agency gap, most managers of SME’s are shareholder; they would make decisions following a pure wealth-maximising goal more determinedly than would be the case in the typical large enterprise. The motives of managers or owners of small businesses are diverse. These motives might be the desire to experience the satisfaction of building up a business, a desire to lead a particular way of life, or a desire to keep someone (perhaps family) tradition alive. Since it is possible for managers to know the personal objectives of shareholders of small business, decisions can probably be made with these in mind. Both large and small businesses that makes a series of decisions causing the wealth to diminish, will sooner or later fail. Wealth maximisation goal is very important to small business and cannot be ignored. 2.5 Organisation of Small and Medium Enterprises The research will consider Small and Medium Size Enterprises in the construction industries that are organised as private limited companies. According to Mclaney (2003) private companies need be of no minimum size; public companies must issue at least  £50,000 of nominal share capital, of which 25% must be paid up. There is no upper limit on the size of a private company. Private companies are entitled to restrict the transfer of their shares; that is it is possible for the company’s Articles of Association to contain a clause giving the directors the power to refuse to register a transfer, at their discretion. While private companies must publish annual accounts, the volume of details is rather less than that which the law requires of public companies. 2.6 Sources of Finance for Small and Medium Size Enterprises Several inquires have dealt with the financing of SMEs and each of these enquires discovered, to a greater extent, that small businesses find it more difficult and more expensive to raise external finance. A particular problem faced by small businesses in their quest for equity capital is the lack of an `exit route’. Generally investors require that there be some way of liquidating their investment before they are prepared to commit funds to it. A number of schemes have been introduced to help small businesses: 2.6.1. The loan Guarantee Scheme (LGS) as first introduced in 1981 to cover situations were potential borrowers were unable to provide sufficient collateral or where the bank deem the risk of lending unacceptable. 2.6.2. The Enterprise Investment Scheme (EIS) – This scheme replaced the Business Expansion Scheme (BES) and it is designed to help small unquoted companies to raise equity finance from business angels 2.6.3.The Venture Capital Trust (VCT) – The trust was introduced in 1995 to encourage individuals to invest in smaller, unlisted trading companies. Venture Capital is the name given to equity finance provided to support new, expanding and entrepreneurial businesses. Venture capitalists usually prefer to take a close interest in the business. This could involve taking part in decision made by the business. Funds provided by venture capitalist are often referred to as private capital.(Mclaney E, 2003) 2.6.4. The Enterprise Fund (EF) it was announced in the competitiveness white paper in 1998 and is designed to help the financing of small businesses with growth potential. 2.6.5. The National Business Angel Network (NBAN) it was launched in 1999 to connect ‘business angels’ with companies seeking equity capital 2.6.6. The late payment of Commercial Debts (Interest) act 1998 gives certain small businesses a statutory right to claim interest from large businesses and the public sector on late payment of commercial debts. 2.7 Gearing Small businesses are in a fundamentally different position from that of the larger one on the issue of gearing. Financial risk to which capital gearing gives rise tends to emphasise operating risk, which will be present with or without gearing. Small businesses are more exposed to financial risk than public liability companies.(Mclaney,2003) 2.8 Help and Advice to Small Businesses One of the major barriers faced by SMEs is the lack of information, help and advice on their operations. Recent initiative to improve this sphere includes: 2.8.1. The business link network – organised in 1993 as a ‘one stop shop’ for information and advice to SMEs. It brings together the services of major business development services in the single accessible location. 2.8.2. The Enterprise Zone – launched in 1997 as a definitive internet site for business information. It provides help on a whole range of business issues. 2.8.3. The Information Society Initiative/Interforum E-Commerce Award – launched in 1999 as part of government’s e-commerce strategy. It is essentially an award scheme to recognise and reward best practice in the use of electronic trading among smaller firms. 2.9 Bank and Institutional Debt Long term loans are available from banks and other financial institutions at both fixed and floating interest rates, provided the issuing bank is convinced that the purpose of the loan is a good one. The cost of bank loan is usually a floating rate of 3-6 percent above the base rate, depending on the perceived risk of the borrowing company. The issuing bank charges an arrangement fee on bank loans, which are usually secured by a fixed and floating charge, the nature of the charge depending on the availability of assets of good quality to act as security. A repayment schedule is often agreed between the bank and the borrowing company, structured to meet the specific needs of the borrower and in accordance with the lending policies of the bank. (Watson D Head A, 2007) 2.10 Security –the Bank’s Perspective A bank has little to lose and much to gain by taking security for a loan. A bank’s solicitor should check that the borrower and any other party providing security have capacity to do so. (The company act 1989, prima facie, a company could pursue only the objects for which its memorandum stated it was incorporated) 2.11 Security – the Borrower’s Perspective It is often difficult for a borrower to argue against a reasonable request for security. However, some borrowers will be contractually prohibited from providing security by a negative pledge in a document to which they are already a party. Specialised lending for financing a project will always be secured over the asset or project in question. (Adams D,2006) 2.12 Working Capital Problems of the Small Business Working capital is the difference between current assets over current liabilities. The amount invested by businesses in working capital is often high in proportion to the total assets employed. It is important that these amounts are managed properly. It is often claimed that many small businesses suffer from a lack of capital and, where this is the case, tight control over working capital investment becomes critical. There are evidence, however, that SB are not very good at managing their working capital, and this has been cited as the major cause of their high failure rate compared with that of large businesses. 2.13 Credit Management Small businesses don’t have the resources to manage their trade debtors (account receivables) effectively. Most small businesses don’t have a credit control department. Small business also lack proper debt collection procedures, such as prompt invoicing and sending out regular statements. These risks probably tend to increase where there is an excessive concern for growth. In an attempt to increase sales, small businesses may be too willing to extend credit to customers that are poor credit risk Lack of market power is another issue for small businesses. They find themselves in a weak position when negotiating credit terms with larger businesses. When big customer exceeds the terms of credit, the small supplier may feel inhibited from pressing the customer for payment in case future sales are lost. (A survey undertaken by the Credit Management Research Centre (CMRC) during April and June, 2003, indicates that small businesses are likely to have to wait an average of 60 days for their trade debtors to pay. 2.14 Cash Flow Statements for Small Companies Financial Report Standard (FRS1) prescribes a format for cash flow statements. Except for very small companies, all companies are required to prepare a cash flow statement for each accounting period. There are two approaches available under the standard; the direct method which shows the operating cash receipts and payments summing to the net cash flow from operating activities, and the indirect method which identifies the net cash flow via reconciliation to operating profit.(Wood F,2002) Credit Creation 2.15 Definition of Credit Creation The BNET business dictionary defines credit creation as the collective ability of lenders to make money available to borrowers. Credit creation is the multiple expansions of banks demand deposits. Banks advance a major portion of their deposits to the borrowers and keep smaller parts of deposits to customers on demand. The tendency on the part of commercial banks to expand their demand deposits as a multiple of their excess cash reserve is called creation of credit. 2.16 Functions of Financial Intermediation in Credit Creation Financial intermediation is the process of channelling funds between those who wish to lend or invest and those who wish to borrow or require investment funds. Financial intermediaries act as principal, creating new financial assets and liabilities. They do not act solely as agents, charging a commission for their services. (The Monetary and Financial System-CIB/BPP Publication 1993 Edition) Any institution standing between the ultimate provider of funds and the ultimate user of funds is engaged in financial intermediation. There are many types of institutions and other organisations that act as intermediaries in matching firms and individuals who need finance with those who wish to invest. These institutions also provide other services which are non-intermediary services like financial advisory services, fund management services and advice to undertakers and mergers provider by merchant banks. Some of the organisation that acts as financial intermediaries is as follows: 2.16.1 Clearing Banks – this bank participate in system which simplifies daily payment so that all the thousands of individual customer payments are reduced to a few transfers of credit between the banks. They offer various accounts to investors and provide large amount of short to medium-term loans to the business sector and the personal sector. The work of these institutions can best be understood through a consideration of the main items in their balance sheet. 2.16.2 Clearing Bank Liabilities – The money from the banks responsible comes chiefly from their customer’s sight and time deposits- mostly current and deposit accounts with which most people are familiar. An important additional item relates to certificates of deposit. These are issued generally for a medium amount of  £50,000 and a maximum of  £500,000 with an initial term to maturity of from three months to five years. Clearing Bank Assets Customers’ money is re-lent in a variety of ways. The main aim of the bank is to have a range of lending instruments of varying terms so that money can be recovered quickly and yet, at the same time, earn the maximum return. 2.16.3 Investment Banks / Merchant Banks The investment banks or Merchant banks have some functions that they undertake: 2.16.3.i Financial Advice to Business Firms Few manufacturing or commercial companies of any size can now afford to be without the advice of a merchant bank. Such advice is necessary in order to obtain investment capital, to invest surplus funds, to guard against takeover, or to take over others. Increasingly, the merchant banks have themselves become activity involved in the financial management of their business client and have had an influence over the direction these affairs have taken. 2.16.3.ii Providing Finance to Business Merchant banks also compete in the services of leasing, factoring, hire-purchase and general lending. They are also the gateway to the capital market for long-term funds because they are likely to have specified departments handling capital issues as ‘issuing houses’. 2.16.4 Foreign Trade A lot of merchant bank are active in the promotion of foreign trade by providing marine insurance, credits, and assistance in appointing foreign agents and arranging foreign payments. Merchant bank is essentially in the general business of creating wealth and of helping those who show that they are capable of successful business enterprise. It is expected that merchant banks will operate without the large branch network necessary for a clearing bank, they work closely with their clients and be more ready to take business risk and promote business enterprise than clearing bank. 2.16.5 Building Societies These take deposits from the household sector and lend to individuals buying their own homes. They have recently grown rapidly in the UK and now provide many of the services offered by clearing banks. Over the years many have converted to banks. 2.16.6 Finance Companies/Houses – Providing medium-term instalment credits to the business and personal sector. These are usually owned by business sector firms or by other financial itermediaries. 2.17 Services Provided by Financial Institutions Financial institutions are organisations that provide services in connection with one or more of the following:- Financial intermediation, linking ultimate providers of funds with ultimate users and creating new financial assets in the process. Exchanging financial assets on behalf of their customers, that is acting as brokers or agents for clients. Exchanging financial assets for their own accounts proprietary dealers, as they are termed. Helping to create financial assets for their customers, and then selling these assets to others in the market underwriting new share issues, for example Providing investment advice to others, example to people seeking a personal pension or to firms on mergers and takeovers. Fund management- managing the whole or part of a pension fund, for example some large non-financial companies have their own financial subsidiaries. In the United Kingdom Ford Motor Finance and Mark and Spencer Finance Se