Abstract
The study is aimed at examining the importance of
small scale business enterprises to national development in Nigeria. The broad
objective of this study is to identify if capital storage and lack of adequate
financial record keeping are the major problems of financing small scale
businesses and also to ascertain the contributions of small scale industries to
infrastructural development. The primary and secondary source of data
collection was used in this study and the simple random sampling technique was used to select 30 respondents
which served as the sample size of the study. The chi-square statistical tool
was used to test the slated hypotheses and the findings revealed that small
scale enterprise reduces and remove regional economic imbalance by so doing,
they assist not only in eliminating the source of social and political conflict
but also in reducing the movement of people to the few developed centers of the
country. It was concluded that countries that are developing like Nigeria can
accelerate their economic development through the encouragement of small-scale
industries. It was recommended among others that Government should formulate
some financial policies that would encourage the commercial and merchant
bankers as well as insurance companies to participate in projects requires high
risk capital, especially in the agro-allied industrial sectors.
TABLE OF
CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgments iv
Abstract v
Table of Contents vi
Chapter One: Introduction 1
1.1 Background
to the Study 1
1.2 Statement
of Problem 2
1.3 Research
Questions 3
1.4 Objectives
of the Study 3
1.5 Statement
of Hypotheses 4
1.6 Significance
of the Study 5
1.7 Scope
of the Study 7
1.8 Limitations
of the Study 7
1.9 Definition
of Terms 8
Chapter
Two: Review of Related Literature
2.1 Introduction
10
2.2 Characteristics
of Small Scale Business 14
2.3 Forms of
Business Organizations 16
2.4 Sources
of Funds for Small-Scale Business 18
2.5 Economic
Importance of Small-Scale Organizations 19
2.6 Possible
Role of Small Scale Industries in Economic Development 21
2.7 Government
Policies 24
Chapter Three: Research Method and
Design 28
3.1 Introduction
28
3.2 Research
design 28
3.3 Description
of the Population of the Study 28
3.4 Sample
Size 29
3.5 Sampling
Techniques 29
3.6 Sources
of Data Collection 29
3.7 Method
of Data Presentation 32
3.8 Method
of Data Analysis 32
Chapter Four: Data Presentation, Analysis and
Interpretation 34
4.1 Introduction
34
4.2 Presentation
of Data 34
4.3 Data
Analysis 35
4.4 Hypothesis
Testing 48 Chapter Five: Summary of
Findings, Conclusion
and
Recommendations 56
5.1 Introduction 56
5.2 Summary
of Findings 58
5.3 Conclusion
58
5.4 Recommendations
59
References 61
Appendices 62
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Small-scale
enterprises as an instrument of economic and national development are a topical
issue of great concern not only to the government but also to business
community, bankers and the society at large. Development in the Nigeria
economy, these days indicates that the survival and growth rate of small scale
business are very vital to the success of the new culture of self-reliance, the
cornerstone of other development programme.
These
enterprises are not only capable of expanding production possibilities of the
economy, they equally pose relative of large potential for creating employment
opportunities and transfer of skills. Indeed, like the small industries of
today, some of these establishments will in future come into large scale
industries.
However,
we cannot shy away from the fact that in spite of government continued effort
to stimulate the growth of small scale business activities, their performance
is still hampered by executive capacity, as well as technical and financial
institution should be mutually supportive. If the desired objective of pursuing
small scale business as instrument of development is to be achieved. It is on
this note that this research work is being carried out.
1.2 Statement of Problem
No
one opens a business with the intention of failure. Yet each year many new
businesses that go into bankruptcy are forced to close down. This is due to some
of the following reasons. Poor management due to the fact that most of the
proprietors have little or no educational knowledge and so do not appreciate
the business entity concept of accounting which implies that the owner of the
business and the business are two different entities and that the business is a
legal person as distinct from the proprietor. Business neglect due to either
lack of time in it organization, operation and improvement. The unwillingness
of banks to grant loans on liberal terms to prospective lenders has made the
establishment of small-scale enterprises almost impossible.
1.3
Research Questions
The following are the research questions of the
study;
1. Are capital storage and lack of adequate
financial record keeping are the major problems of financing small scale
businesses?
2.
Do small scale industries contribute
to infrastructural development?
3.
Do small scale enterprise contribute to
the creation of employment opportunities?
4.
Do small scale industries contribute
capital formation for development?
1.4
Objective of the Study
The
research on small-scale industries have witnessed a lot of problems, to address
these problems, some relevant questions that must be answered are raised below;
1. To identify if capital storage and lack of
adequate financial record keeping are the major problems of financing small
scale businesses.
2.
To ascertain the contributions of
small scale industries to infrastructural development.
3.
To examine the contributions of small
scale to the creation of employment opportunities.
4.
To ascertain the contributions of
small scale to capital formation for development?
1.5 Statement of Hypothesis
Hypothesis
One
HO: Capital storage and lack of adequate
financial record keeping are not the major problems of financing small scale
businesses.
HI: Capital storage and lack of adequate
financial record keeping are the major problems of financing small scale
businesses.
Hypothesis Two
HO: Small scale industries do not contribute to infrastructural
development.
HI: Small scale industries contribute to infrastructural
development.
Hypothesis Three
HO: Small scale businesses do not promote the creation
of employment opportunities.
HI: Small scale businesses promote the creation
of employment opportunities.
Hypothesis
Four
HO: Small scale enterprises do not promote capital
formation for development.
HI: Small scale enterprises promote capital
formation for development.
1.6
Significance of the Study
The
relevance or significance of this research is the importance of small-scale
business. Small-scale business is important to the newly industrialized
developing countries. In most countries of the world particularly in the loss
developed countries, the respective government
policy and programmes to accelerate industrial development particularly through
the promotion of small-scale business.
At this time of the nation, questions
for economic recovery and self-reliance, the role of small-scale business in
this regard can not be overemphasized. There is no doubt that the result of
this research will be useful to prospective and existing small-scale firms in
Nigeria by equipping them survival strategies in a period of economic hardship.
Both public and private sector hopefully
find this work useful in all areas of financial management. Moreover, potential investors and other
individual wishing to establish small-scale business will also see this work as
a useful guide.
Furthermore, the study shall be
beneficial to the commercial banks and other financial institution as a
reference frame in the formulation of credit policy guide-lines towards the
financing of small-scale business. Commercial bank and government will also
benefit from this work since it will help them to review their existing
criteria for granting loan.
Finally, if they are properly applied,
small-scale investors would have a significant step towards self-reliance in
industrial drive.
1.7
Scope of the Study
This
research work is designed to study small-scale business as an instrument of
national development and it relative importance in an economy. The information
collected in this research work are limited, current and adequate in scope for
the use of this study a research table will be conducted which embraces the
over-view of small-scale businesses, possible role of small-scale business in economic
development, problems of small-scale business and management guide tackling
these problems. The research work also covers government policies and
incentives to small-scale industries. This and other important information are
the area of forms which this research scope is limited to. A sample size of 30
was used for effective survey.
1.8
Limitations of the Study
Considering
the fact that the project is a group work makes it difficult for the work to
move smoothly because there may be a time we need the attention of everybody,
you will fine out that is only some persons are present and apart from that,
money or financial aspect is also a factor in our research.
Owning
to the geographical vastness of Etsako West Local Government Area of Edo State,
time and financial limitation, it was impossible to have data collection from
all parts of the local government. There were also constraints such as the
uncompressing attitude of many respondents, some of them frowhed at some
questions which they felt contained details that appears to probe into their
private financial and business affairs. Some of the interview achieved that the
exercise was in connection with tax purpose.
1.9
Definition of Terms
a.
Loan
Credit: A sum of money lends to somebody to be repaid with
interest.
b.
Scale: A set of numbers or
standard for measuring or comparing.
c.
Profit:
This
is the money gained from trade
d.
Occupation:
Business,
trade which any human done to either living, it could be permanently or
temporally.
e.
Problems:
These
are difficulties in business that needs attention.
f.
Finance:
It
is the provision and management of money in a business enterprise.
g.
Capital:
money
needed to start a business
h.
Bank:
This
is a place where money are kept for the purpose of transaction.
i.
Asset:
The
property of a company owned by the company e.g building.
j.
Liabilities:
This
is the amount of debt, which a business owes e.g loan.
k.
Investment:
To
put money to a particular business in order to make profit e.g buying of share.
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