ABSTRACT
This research project is on the Effect of Survival
Strategies on the Performance of Small and Medium Scale Enterprise with
references (A Case Study of Selected Small Business in Lagos Sub-Urban). This
research work is generally about the effects Survival Strategies on the
Performance of Small and Medium Scale Enterprise. The project has undertook the general
introduction into the research work led to the review of various literature
that relates to the major variables involved in the research work especially Small and medium scale enterprises
that speed up the rate of social economic development of many countries,
particularly developing countries. They serve as system for attainment of
national objective in terms of employment generation at low investment cost and
also the development of entrepreneurial capabilities and indigenous technology.
Various studies conducted indicated about 50 per cent of small and medium scale
enterprises surveyed did not receive external finance while 77 percent
indicated lacked of access to financial resources. The secret behind the
success of a self-reliant strategy in any economy does not lie solely in any
particular socio-political or socio-economic philosophy, but so much on
people’s attitude to small enterprises. The data collected were analyzed through the use of frequency
distribution table and chi-square statistical tool to determine whether a number
of proportions to be studied are equal. The yes and no scale would be used to
analyze the data for the study, research questions would be analyzed using the
percentage analysis from the questionnaire retained. Base on the finding
Internal characteristics and problems of SMEs. Most small and medium scale
enterprises in Nigeria are battling with serious internal problem. There
problem range from poor management practices, lack of well planned marketing
strategy, among other internal survival strategies and also reveals that with
more government institutions in place such as National Directorate of
Employment (NDE), Small and medium enterprise development agency of Nigeria
(SMEDAN), small and medium enterprises equity investment Scheme (SMEEIS) the
performance of SME’S will greatly improve, it recommends that establishment of
more industrial development centre (IDCs) according to finding will boost SMEs
activities in the country Base on this, attention should be given to the
development of more centres as this will
aids in making the business environment conducive for more investors and It is
a known fact that some small and medium scale enterprises are operating at a
very abysmal level. Therefore, the need of authority concern at all level to
intensify effort toward boosting their performance (SMEs), as it has been
considered to be a catalyst for economic growth and national development both
in developed and developing countries.
TABLE OF CONTENTS
Title Page I
Certification Ii
Dedication Iii
Acknowledgements Iv
Abstract V
Table Of Contents Vi
CHAPTER
ONE: INTRODUCTION
1.1
BACKGROUND TO
THE STUDY 1
1.2
STATEMENT OF
THE PROBLEM 3
1.3
OBJECTIVES OF
THE STUDY 4
1.4
SIGNIFICANCE OF THE STUDY 5
1.5
SCOPES AND LIMITATION 5
1.6
DEFINITION OF TERMS 5
REFERENCES 7
CHAPTER TWO: LITERATURE REVIEW
2.2
INTRODUCTION 8
2.3
ADVANTAGES OF SSE’s 11
2.4
ROLES OF SSE’S IN NATIONAL DEVELOPMENT 11
2.5
PROBLEM
OF SMALL SCALE ENTERPRISES 15
2.6
CONCEPTUALIZING
UNEMPLOYMENT /EMPLOYMENT 17
2.6.1
THE
CLASSICAL THEORY 17
2.6.2
THE
KEYNESIAN THEORY OF UNEMPLOYMENT/EMPLOYMENT 20
2.6.3
OTHER
THEORIES OF EMPLOYMENT 22
2.7
ECONOMIC
GROWTH 23
2.7.1 ECONOMIC GROWTH AND DEVELOPMENT 24
2.8
SMALL AND MEDIUM SCALE SMEs CAPACITY BUILDING
IN NIGERIA 26
2.9
STRATEGY: CONCEPT AND
ADAPTATION TO SMALL SCALE
BUSINESSES. 28
2.8 SMALL
AND MEDIUM SCALE SMES STRATEGY FOR 30
2.9
FINANCES OF SMALL – SCALE ENTERPRISE 32
2.9.1 SMALL –
SCALE INDUSTRIES CREDIT SCHEME 33
2.10 THE NIGERIA BANK
FOR COMMERCE AND 34
2.10.1
INDUSTRIAL DEVELOPMENT CENTER (IDC) 35
2.10.2
THE NATIONAL ECONOMIC RECONSTRUCTION FUND
(NERFUND) 35
2.10.3 SMALL AND MEDIUM ENTERPRISES LOAN
SCHEME 47
REFERENCES 52
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 INTRODUCTION 54
3.2
RESTATEMENT
OF THE RESEARCH QUESTIONS 54
3.4
RESTATEMENT OF THE RESEARCH HYPOTHESES 55
3.5
THE
POPULATION OF THE STUDY 55
3.6
SAMPLE
SIZE AND SAMPLING PROCEDURE 56
3.7
SOURCE
OF DATA/METHOD OF DATA COLLECTION 56
3.8
METHOD
OF DATA ANALYSIS 56
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA COLLECTED
4.1
INTRODUCTION 58
4.2
DATA
PRESENTATION AND ANALYSIS 58
4.2.1 TESTING OF HYPOTHESES 68
DISCUSSION OF RESULT 72
REFERENCES 74
CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND CONCLUSION
1.1
SUMMARY 75
5.2 RECOMMENDATIONS
AND CONCLUSION 78
BIBLIOGRAPHY 81
QUESTIONNAIRE 83
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
The
relative importance of small and medium scale enterprise in advanced and
developing countries has led and would continue to lead to a reconsideration of
the role of Small and Medium Scale Enterprises in the economy of nations. The
development of many countries is often measured by such indices as the level of
industrialization, modernization, urbanization, gainful and meaningful
employment for all those who are able and willing to work, income per capital,
equitable distribution of income, and the welfare and quality of life enjoyed
by the citizenry.
There
is no doubt that small scale enterprises exist in most economic environment.
The historical background of small and medium scale enterprises in Nigeria can
be traced back to 1946 when the essential paper No. 24 of 1945 on “A Ten year
plan of development and welfare of Nigeria 1946 was presented. Small and Medium
Scale Enterprise is an all time necessity. It was there at the beginning; it
was gained prominence today and will increase its importance tomorrow. This is
simply dictated by the developmental needs of the Nigeria society.
In
recognition of the depth and breath of the consequences of small-scale
enterprises in alleviating poverty and national development, there has been a
deep-self interest in recent years for development of Nigerians small-scale
enterprises particularly since the adoption of the economic reform in 1986. The
small and medium scale industry is seen as a key to Nigeria's growth and
alleviation of poverty and unemployment in the country.
Therefore,
promotion of such enterprises in developing economies like Nigeria is of
paramount importance since it brings about a great distribution of income and
wealth, economic self-dependence, entrepreneurial development employment and a
host of other positive, economic uplifting factors (Aremu 2008). Moreover, in a
country like Nigeria with an adverse Balance of Payment situation, the growing
contribution of the Small Scale
Industries
sector in Nigeria's export portfolio goes a long way in generating foreign
exchange and smoothening out the adverse Balance of payment situation. Aremu
(2008) posited that Small Scale enterprises play an important role in the
economics of any country in accordance with their relative levels of
development. He further emphasized that Poverty is a worldwide phenomenon and
its incidence in Nigeria had been high and on the increase since 1980. This
position is in line with (Adeyemi and Badmus 2011 and Schmitz 2012), they also
argued that adequate financing of small and medium scale enterprises will
reduce the unemployment level in Nigeria.
There
is a general believes that desire employment generation in this country can be
achieved through development of small and medium scale enterprises (Awosika
2007, Schmitz 2005). Gunu (2004) and Aremu (2008) posited that Small Scale
Enterprises provide income, savings, and employment generation. They are seen
as veritable engines for the development of entrepreneurial capabilities and
indigenous technology which will generate employment in the country. Small and
medium scale industries constitute the basis for industry and natural economy
in many countries. It has been estimated that SME’s employ 22% of the adult
population in developing countries (Daniel 2004 and Fisseha 2001). Small and
medium scale enterprises can be regarded as one of the important element of a
country development and this play a crucial role in the economy of this nation.
Small
and medium scale enterprises speed up the rate of social economic development
of many countries, particularly developing countries. They served as system for
attainment of national objective in terms of employment generation at low
investment cost and also the development of entrepreneurial capabilities and
indigenous technology. It also reduce the flow of people from rural area to
urban area, henceforth, it can be easily established by the relatively less
skilled labour force of a developing country, Small and Medium Scale
Enterprises contribute substantially to the gross domestic product, export
earning, and development opportunities of the countries. After the attainment
of independence much emphasis has been laid on growth of small and medium scale
industries as means of reduce the incidence of poverty and employment in the
country.
At
the early stages of industrialization, Japan economy was characterized by
traditional industries and large number of small firms who as of that time draw
their strength not from an abundant supply of capital, but from their vast supply
of labour. So in Japan “during the interwar years (1919 - 1938) and after
government policies accorded and continue to accord due priority to country
small and medium scale enterprise (Mosk, 2010).
Various
studies conducted indicated about 50 per cent of small and medium scale
enterprises surveyed did not receive external finance while 77 percent
indicated lacked of access to financial resources. The secret behind the
success of a self-reliant strategy in any economy does not lie solely in any
particular socio-political or socio-economic philosophy, but so much on
people’s attitude to small enterprises.
1.2 STATEMENT
OF THE PROBLEM
Findings
indicate that small and medium scale enterprises are characterized with
enormous problems that serves as constraints for effective performance. Such as inadequate access to credit
facilities, infrastructural facilities, government support programmes,
marketing strategies, technological problems, lack of sound financial and
accounting practice strategy among others. As a result, this study will
critically examine the problems and proffer solutions.
1.3 OBJECTIVES
OF THE STUDY
The
objective of this paper is to examine relevance of small and medium scale
enterprises as a means of generating employment and reduce poverty in the
country.
1.
To assess the roles of small scale
enterprises in employment generation.
2.
To determine the extent at which small
scale enterprises contribute to economic growth.
3.
To recommend ways through which small
scale enterprise can be more effectively developed.
1.4 RESEARCH QUESTIONS
1. To
what extent has survival strategies enhance the performance of small and medium
scale enterprises.
2. What are
the opportunities available to small and medium scale enterprises in Nigeria?
3. To
what extent has non-availability of raw material, inadequate infrastructure
affects the performance of SMEs
4. What
contribution has SMEs made in the Lagos sub- urban area?
1.3 STATEMENT OF HYPOTHESES
In order to achieve the above stated
objects, the following hypotheses shall be tested:
Ho1: SMEs do not play significant roles in employment generation in Nigeria.
Ho2: SMEs do play significant roles in employment generation in Nigeria
Ho1: SMEs do not play significant role in the economic growth in Nigeria
Ho2: SMEs do play significant roles in the economic growth of Nigeria.
1.4 SIGNIFICANCE OF THE STUDY
The study is significant in that it will
show how SMEs may be used to generate more employment, improve economic growth
and help the country from her present recession if not depression as it has
done in many other countries mentioned in the introduction.
1.5 SCOPES AND LIMITATION
The study will be limited to SMEs as
defined. Also the study shall limit the
number of SMEs to be examined to fifty.
1.6 DEFINITION OF TERMS
Survival Strategy: The engine of economic growth and for promoting equitable
development
Micro Enterprise: A firm, whose total cost including working
capital but excluding cost of land is not more than ten million naira
(N10,000,000) and/or with a labour size of not more than thirty (30) full-time
workers and/or a turnover of less than two million naira (N2,000,000) only.
Small Enterprise: An enterprise whose total cost including
working capital but excluding cost of land is between ten million naira
(N10,000,000) and one hundred million naira (N100,000,000) and/or a workforce
between eleven (11) and seventy (70) full-time staff and/or with a turnover of
not more than ten million naira (N10,000,000) in a year.
Medium Enterprise: A company with total cost including working
capital but excluding cost of land of more than one hundred million naira
(N100,000,000) but less than three hundred million naira (N300,000,000) and/or
a staff strength of between seventy-one (71) and two hundred (200) full-time
workers and/or with an annual turnover of not more than twenty million naira
(N20,000,000) only.
Large Enterprise: Any enterprise whose total cost including
working capital but excluding cost of land is above three hundred million naira
(N300,000,000) and/or a labour force of over two hundred (200) workers and/or
an annual turnover of more than twenty million naira (N20,000,000) only.
NASME: Nigerian Association of Small and Medium Enterprises,
which is an umbrella association of all SMEs
NACCIMA: Nigerian Association of Chambers of Commerce, Industry,
Mines and Agriculture is an association of various Chambers of Commerce in
Nigeria
SMEs: Small and Medium Enterprises are those firms, which satisfy the
definitions given above
SMEDAN: Small and Medium Enterprises Development Agency of
Nigeria
CBN: Central Bank of Nigeria, the apex bank in Nigeria, which supervises
other banks
MSME: Micro, Small and Medium Enterprises
NGO: Non-governmental Organisation
LCCI: Lagos Chamber of Commerce and Industry
NACC: Nigerian American Chamber of Commerce
SRS: Simple Random Sampling
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