purpose of this study is to appraise the sources of funds to medium and
small-scale business concern in Enugu
State (A case study of
eastern plastics Nigeria Limited Enugu).
line with this major objective, there research questions and data of this study
were source through structured oral, interview and copies of questionnaire
distributed to the thirty three staff of this enterprise. All the copies of the
questionnaire were returned and used in the study.
the basis of data presented and analyzed the following findings were made.
That the various of
sources of funds available to Eastern Plastic Nig. Ltd were not only limited
but a large quantity or extent grossly inadequate to center for the varying
needs of the company.
That problems associated
with cost of funds vis-a-vise these sources greatly affected negatively the
availability of capital to this enterprises.
That the lack of adequate
funds to this enterprises hinders their operations in terms of the production
of higher quality plastic product at affordable prices.
On the loans of
this findings the following recommendations were made:
That the government
(state & federal) and their agencies should frontly ensured that the
adequate fund are provided to this organisation at relative cost.
That all the enabling
environment which will guarantee the growth and development of small/medium
scale business concerns in Enugu State, as a catalysts towards economic
emancipation of our people should be provided for these business outfits.
That; to significantly
increase the sources of funds to this organisation, such measures like tax
exemption on retained earnings, reduction of interest rates charged by banks
etc should be put in place.
Table of contents
List of tables
CHAPTER ONE - INTRODUCTION
Background of the study
Statement of the Research
Purpose of the study
Significance of the study
Scope of the study
Definition of terms
Background history of the
The concept of
small/medium scale business concerns
The concept of cost funds
Operation methods of
small/medium scale business
Sources of business fund
to small/medium scale business
Hindrances against loans
for small biz
Importance of keeping
financial records by small/medium scale business concern
Risk of financial
Problems of capital
CHAPTER THREE - RESEARCH
Design and Area of study
Population of the study
Description of instrument
Validity of the
Method of collective data
Presentation of Data and
Analysis of Data
Summary of findings
Limitations of study
Are the various sources
of loans/capital Available to Eastern Plastics Nig. Ltd, Emene.
What are the difficulties
encountered with these sources and the cost implications of each source?
Does this company employ
the services of qualified accountants in their day-to-day financial operation
What measures can be
taken to significantly increase the availability of fund to this business
concern so as to enable them meet their corporate goals?
of the Study
business is the exchange of goods, money or services for mutual benefit. In
other words, a business enterprise succinctly put is the sum total of those
activities that have as their main purpose, the creation, maintenance and
expansion of a concern which continues to exist, because it earns profit or
other benefits, as a result of this exchange of goods and services or money.
business activities came into existence when our forefather began to trade by
barter, that is exchange of goods for goods) having realized the different
capabilities and talents possessed by individuals and the enormous times energy
wasted in trying to become self sufficient. No wonder why, the age long
aphorism that “No man is an Island” is an
accepted contention of most critics.
a rule of thumb, this exchange of goods existed in many parts of the world
including Egypt, Europe, Germany and some parts of Africa Albelt, the advert of
industrial revolution made man to conceptualize and then concretize that
serious need to develop his genetic and phenotypic qualities in trying to
specialize in one trade or another, thereby making life more satisfying to the
generating of the people. Conceptually different types of business enterprises
have evolved over the years ranging from sole proprietorship to partnership,
co-operative companies to even corporation or public liability companies (PLC).
All those were primary established for the production distribution and
provision of services to the entire human race (Homo Sapiens).
the whole, modern business enterprises are characterizes by rapid technological
changes; speculation/forecasting with a high degree of inter-dependence and
precision, and increased number of mergers. As of today, the complexities of
business and modern technological advancement encourage the formation of
companies that engage only in production; while selling and many types of small
business enterprises such as Supermarket Retailshops, Parent medicine stores,
provision stoves, motorcycle spare parts shops, plastic producers etc. have all
Enugu as an ancient city
is consistently being converted from a pure traditional setting into a fast
growing cosmopolitan city. Enugu was the capital of the Eastern Region, which
was later sub-divided into East Central State; and presently, Enugu is the
capital state; after the Nigerian Civil War. There has been steady but gradual
influx of people from other state particularly the nearly states like Imo,
Anambra, Ebonyi, etc, either as traders or workers. And with a lot of Federal
and State establishments, there was a tremendous increase in the number of
people coming from other states into Enugu.
This situation has indeed made the population of Enugu to be a mixed one.
a rule lunch, the major economic activities in Enugu are civil service working with either
at the Federal of State establishments, a lot more are still engaged in large
scale medium scale enterprise scattered almost everywhere in the city including
of course, Easter Plastics at along Enugu-Abakaliki
Express Road, Emene, Enugu.
research work would thus highlight the major issues surrounding he sourcing of
funds for small/medium scale business concerns with particular reference
Eastern Plastics Enugu-Abakaliki express road Emene, Enugu. It would also evaluate the relevance
of having a balanced working capital as this will serve as important basis for
the inculcating of the need to have a proper internal control of funds when
finally obtained by this enterprise.
OF THE RESEARCH PROBLEM
general one major panacea proffered by well meaning Nigerians on effective way
of reducing unemployment in this country, thereby increasing productivity is
through the establishment and sustenance of small scale/medium scale business
enterprise all over the country. Little wonder then, why most government; both
past and present and the three ties hand in one way or another, enunciated well
articulated but perhaps, poorly implemented programmes, all of which were aimed
at increasing the awareness required for this kind of business
virtually all small/medium scale concern is almost part of the world including Enugu, started in a very
low way, but they gradually and steadily expanded. In other words most of these
small/medium scale business concerns passed through a period of metamorphosis,
generally beginning virtually with little, but subsequently, graduating into
full-pledge business concerns. Some of these business enterprises/concerns even
got matured into large-scale business enterprises/public liability companies
after some period of transformation and sustained development.
the issue that arises is why should such a period of gestation or transformation
take place in the establishment and expansion of small/medium business
school of thought holds it that the above trend suggests and even indicated
that small/medium business enterprises have problems in obtaining the initial
capital to start off their operations and subsequent expansion. Worst still is
the generally accepted motion that such capital when finally obtained some
times is poorly managed, and even in some extremely cases, embezzled by the top
management. On the whole, any of these circumstances, can greatly affect the
establishment of these business enterprises. therefore, ascertaining the
authenticity of these schools of thought by first identifying the various
sources of capital to small/medium scale business enterprises with particular
reference to Eastern Plastic Nig. Ltd at along Enugu-Abakaliki Express Road
Emene, Enugu is
the major thrust of this work. The study will equally investigate thoroughly
the difficulties encountered by their company in sourcing capital as well as
finding out, how such capital if obtained, is managed for the successful
operation of this company, in it’s bid to meet their specific and corporate
OF THE STUDY
overall purpose of the study is to find out the sources of capital available to
small/medium business organization operational activities. It was also aimed at
ascertaining how these funds should be effectively managed throughout the life
span of the business so as to enable them meet their corporate goals and targets.
this study was also geared towards ascertaining how efficient are the financial
management including their skills and strategies used by small/medium business
as regards to the preparation of necessary book of accounts; the use of professional
accountants and whether banking facilities are used and at which cost.
the study seeks
To ascertain the various
sources of loan/capital available to Eastern Plastics Nig. Ltd in Enugu.
To appraise which sources
are more frequently used and why;
To examine whether
Eastern Plastics Nig. Ltd experience any difficulty in getting loan/capital.
To find out if Eastern
Plastics Nig. Ltd actually employ qualified accountants, so as to curb cases of
loans of stock and cash in their operations.
Are the various sources
of loans/capital available to Eastern Plastics Nig. Ltd adequate?
What are the difficulties
encountered with these sources; as well as the cost implications of each
Does this business outfit
employ the services of qualified accountants in their day to day financial
operation and transaction?; and
What measures can be
taken to significantly increase the availability of funds to this business
concern so as to enable them meet their corporate goals.
OF THE STUDY
study is significantly for a good number of reasons, including the following:
this study will to a reasonable extent, highlight the perceived deplorable
conditions under which Eastern Plastic concern in the face of a glassing dearth
of funds needed for both the working capital as well as for the attainment of
their corporate goals and target. By so doing, all the indentified issues will
later be examined with a to redressing and resolving them, so as to sustain and
improve upon the efficacy of this business concern in the production of plastic
and other associated products for the people of Enugu State in particular and
Nigeria in general.
this study will reveal the associated cost of each source of fund in terms of
their implications towards the availability of capital needed by the
enterprise. This will naturally guide future government at the various tiers
towards formulation polices and programmes that will make it mandatory for
financial institutions and intermediaries to set aside substantial amount of
funds as loan advancement to small scale and medium scale business concerns
such Eastern Plastic Nig. Ltd. When such an enabling environment is thus
established, it will go a long way forwards the production of plastic and other
allied products by the business concern.
the findings of this study will serve as a blue-print that will ultimately
guide future policy formulation towards the increase and sustenance of the
production of plastic product in the state in particular and Nigeria in
other future researchers will find this research work very invaluable at least,
as a readily available reference material, while carrying out any study of this
nature in future.
OF THE STUDY
study will be delimited only to Eastern Plastics Nig. Ltd. along Enugu
Abakaliki express road Emene, Enugu, in terms of their various sources of
funds, their cost implications and then the measures that could be taken to
significantly increase the number of organizations or institutions – financial
or otherwise, that will be also and willing to make funds available to them at
a relatively reasonable costs.
the study will be concentrated only on the various plastic products produced
and marketed by Eastern Plastics Nig. Ltd.
the study will investigate the various roles played by commercial banks,
insurance companies etc towards increasing the available of capital to small
scale and medium scale business outfits that are scattered all over the state.
this study will be delineated to only the proximate and immediate measures that
could be taken by this business concern, and then the governments, towards
redressing any anomaly, such that more funds can be made available to them so
that they can be meet up with their corporate objectives and targets.
WORKING CAPITAL: The
difference between current assets and current liabilities it is an index of the
firm’s ability to pay its short term liabilities.
INSOLVENCY: The inability of the firm to
discharge its liabilities immediately they are due.
SHORT TERM LOAN/CAPITAL:
It is a borrowed capital that must be paid back within an relatively short term
usually less than a year.
LONG TERM LOAN/CAPITAL:
It is the capital usually obtained by using bonds long terms notes or mortgages
used for the purchase of fixed assets of the business repayable after 5-10
years or longer.
INTERMEDATE OR MEDIUM
TERM LOAN: It is the borrowed capital that is
repayable within one to five years.
They are those assets that can be converted into cash with a period of time
such as marketable securities, stocks debtor, and prepared expenses.
These are credit bills payable acured expenses, bank drafts, income tax and
long-term debts maturing in the current.