ABSTRACT No small scale industry can stand on its own and operate effectively if it does not acquire the necessary requirements to ascertain its effectiveness.Problems militating against effective operations of small scale industries in Udi Local Government has been investigated in course of this research and the result has shown that, inadequate financing of small scale industries has been a very fascinating issue and as a result of this, the industries can not attain to height they ought to. It has also been found that in most case, owners of small scale industries in the local government are not knowledgeable enough to handle the industry.Lack of adequate infrastructural facilities and also lack of raw materials in the area is also one of the major causes of the ineffectiveness of the small the area.Other problems are found in the course of this research area? Inability of the government to give loans subsides to small scale industries these small scale industrialists finds it difficult to attract loan. From financial institutions.Chika and Egbe (2001) in their write up reveal that in Nigeria banks complain of not having any industrialist to lead to. The few that apply have been dishonest, defaulting in payment and lending the banks in losses.On the other hand Emeka (2000) said that “No bank would want to take financial risk in business from which it doubts profitability continuing he maintained that “Bank consider the business of small scale units as risky because of their lack of expert management support.Implementation of government policies, limited number of skilled manpower, some of the industries in the area are located in the undeveloped part of the local government. As Christopher Ike (2003) opined that we have graduate that could have assisted, but their all paper professionals.