ABSTRACT
This research work was designed to determine the role of banking sector in promoting of small and medium enterprise in Nigeria. Some selected enterprises were used as a case study and questionnaires were administered in order to extract information on this project. The objectives of the study includes to identify the roles of small and medium enterprises in the development of the Nigeria economy and to evaluate the problems the encountered in the establishment of small businesses. Some literature were reviewed in relation to the topic with the themes and sub themes of the study. However, in research methodology, the researcher used some instruments for data collection. These instrument s emanated from both the primary and secondary source of data. The data collected were analyzed, grouped into frequency, computed and arranged in tables for easy references. The statistics tools for analysis are the simple percentage and chi-square technique. These techniques were appropriately applied at 5% level of significance. The result of the study shows that small and medium enterprise plays a vital role in the development of Nigerian economy despite the various problems the encounter in the establishment of small businesses. Some recommendation were also made based on the results of the findings.
TABLE OF CONTENTS
Title
page…………………………………….………..………………………………………i
Declaration
page………………………………………………………………………………ii
Approval page……………………………………..…….……………………………………iii
Dedication……………………………………………………………………………...………iv
Acknowledgement………………………………………………………………………….…
v
Table of content
……………………………………………………………………………….. vi
Abstract…………………………………………………………………………………………vii
CHAPTER ONE:
INTRODUCTION
1.1. Background of
the Study - - - - - - - - -1
1.2. Statement of
the Problem - - - - - - - - -2
1.3. Objective of
the Study - - - - - - - - - -3
1.4.
Research Question - - - - - - - - - -4
1.5. Significance of the Study- - - - - - - - - 4
1.6.
Scope and Limitation - - - - - - - - - -5
1.7. Definition of
Terms - - - - - - - - - -5
CHAPTER TWO: LITERATURE REVIEW
2.1. Conceptual
framework - - - - - - - - -7
2.2. Basic
Characteristics of Small Scale Enterprise - - - -- - -9
2.3. Types of Small
business - - - - - - - - -10
2.4. Sources of Fund
to Small Businesses - - - - - - - -11
2.5. Government
Influence on Small business Enterprises - - - - - -16
2.6. The Role of
Small Scale Business in development of Nigeria economy- - -17
2.7. Problems of
Establishing Small Business Enterprise in Nigeria -- - - -19
CHAPTER THREE:
RESEARCH METHODOLGOY
3.1. Introduction
- - - - - - - - - - 22
3.2.
Research Design - - - - - - - - - -22
3.3 Sample Size - - - - - - - - - - -22
3.4.
Sampling
Procedure - - - - - - - - -23
3.5.
Research
Instrument - - - - - - - - - -23
3.6. Method of Data
Analysis - - - - - - - - -24
CHAPTER FOUR:
PRESENTATION OF DATA
4.1. Data
Presentation and Analysis - - - - - - - -26
CHAPTER FIVE:
SUMMARY
CONCLUSION AND RECOMMENDATIONS
5.1. Summary - - - - - - - - - - -33
5.2
Conclusion- - - - - - - - - - -33
5.3
Recommendations - - - - - - - - - -34
Bibliography
Appendix
CHAPTER
ONE
INTRODUCTION
1.1.
BACKGROUND OF THE STUDY
For the past decades, small business enterprises in Nigeria
were characterized as essentially backward and cog in the wheel of the overall
development of the Nigeria economy. As a
result of this, there has been a prevalent feeling that such businesses could
be assisted only for social reasons, not as a promising opportunity for
national development. Obviously, too
little attention has been paid to the benefits to be derived from helping small
enterprises of modernize and grow. This
attitude arose partly amongst both the citizens and government and mainly from
the very nature of the small business which made it difficult for its impact to
be felt in the economy.
The latent contributions which small business can make are
now attracting recognition. This awareness
is manifest in the ever increasing number of Nigerians who daily strive to put
up their personal ideas and abilities to effective use by starting small
business ventures. Evidence around the
world indicate that small scale enterprise provide an effective means of
stimulating indigenous entrepreneurship, enhancing greater employment
opportunities per unit of capital invested and aiding the development of
technology. Through their wide
dispersal, they provide an effective means of mitigating rural-urban migration
and resource utilization. Furthermore,
by producing intermediate products for use in large scale enterprises, small
businesses contribute to the strengthening of industrial linkages.
Accordingly, due to the recognition of the roles of small
business, the Nigerian government has since 1970 initiated programmes for the
assistance of small businesses, especially, in the areas of finance, extension
and advisory services including, training
and provision of infrastructures.
All these are designed to enhance the development of small
businesses. Successive governments in
Nigeria have for the past three decades shown great interest in the financing
of small businesses by establishing specialized banks and other credit
agencies/schemes to provide customized funding.
In spite of all the contributions and the attention given to
it by the government, the small business enterprise is still confronted with
problems peculiar to what many may refer to as the ‘Nigerian factor’.
One of such problems is the lack of funds, “It takes money to
do business”. From the time a business
idea is conceived of the promotional state until after it has ceased to
operate, there are financial implications in every activity at every point in
time associated with the businesses. It is therefore not surprising that the
issue of financing is of major concern to small business organization. Despite that, the role banking sector in
promoting of SMEs in Nigeria cannot be underestimated.
It is noteworthy that most of the small businesses in Nigeria
are sole proprietorship and partnerships.
1.2.
STATEMENT OF THE PROBLEM
Nigeria is currently witnessing an alarming rate of
unemployment rate is growing tin geometric progression. The economy is also increasingly finding it
difficult to cope as Nigerian economy is waning. A lot of experts have called for the creation
of an enabling environment for small scale enterprise to thrive. They cited Asian
“Tigers” such as Malaysia, China, Sought Korea, Indonesia,
Singapore and Thailand where both the government and individuals knowing the
importance of small scale industrial development join forces together in
fostering effective and sustainable small scale enterprises in their
countries. Evidence also abound that in
the above mentioned places, a lot is being done to empower the growth of this
sub sector of the economy. The role of small
scale industries in the development of indigenous technology cannot therefore
be over emphasized.
1.
3. OBJECTIVES OF THE STUDY
This study seeks to identify the role of banking sector in
promoting the small scale enterprise in the overall development of the nation’s
industrial sector. It also aims at
finding ways of making small scale enterprises more effective in order to
enhance to economic development of the nation’s indigenous technology.
Moreover, in this
study, attempt will be made to achieve the following:
i.
To
assess the importance of the identified roles banking sector in small scale enterprises
in the development of Nigerian Economy.
ii.
To
determine whether or not the Nigerian small scale enterprises make use of all
the credit facilities available to them and the reasons for the stand they take
in relation with their initial capital.
iii.
To
consider the nature and level of financial assistance desired by them and
compares it with the already available forms of assistance desired by them and
compares it with the already available forms of assistance.
iv.
To
evaluate the problems encountered in utilization of the available opportunities
and or facilities as regards fixed assets
like land and locations.
v.
To
suggest ways by which these problems could be tackled in order to improve the financial condition of
the small scale businesses and boost
their source of their raw materials generation.
vi.
To
ascertain whether or not government policies have been favorable to the
establishment of small scale enterprises especially as it concerns power
supply.
1.5
RESEARCH QUESTION
i.
What are
the roles of small scale enterprises in the development of Nigerian economy?
ii.
Has lack
of land and good location been a problem in the establishment of small scale enterprise in Nigeria?
iii.
Does
epileptic power supply in Nigeria hinders establishment of small business
enterprises?
iv.
Has
unavailability of raw materials been a problem in establishment of small scale
enterprises?
v.
Has
government policies been unfavorable to establishment of small scale enterprise
in Nigeria?
vi.
Does the
consumer’s preference to imported goods adversely affect the establishment of
small scale enterprise in Nigeria?
1.3.
SIGNIFICANCE OF THE STUDY
The study is thus important because of its potentiality in
the development of the small business sector which has been characterized as
the “man carrier of development and the engine of social and economic growth”
in Nigeria. The study will also help in
identifying why people don’t go into small –scale enterprise despite its
numerous advantages. It will also find
our problems encountered while running the business. The study will help government identify areas
requiring attention, thus stimulating government into proper directing of loans
and incentives to improve upon existing ventures. It will also provide useful guide for
prospective entrepreneur that wish to choose self-employment as a career. And finally, it will serve as secondary data
for subsequent studies by a prospective researcher.
1.4.
SCOPE AND LIMITATION
A good number of factors made the study difficult. Notably, is the time factor. The time available for the study was so short
that the study was done almost in rush.
Due to the limited time too, the researcher based his study only on
selected small business enterprises within Nigeria. Another problem was combing course work,
office work, research work and financial constraints to carry out a full and
unbiased study.
1.6.
DEFINITION OF TERMS
Small Scale Enterprise:
- The definition of small
scale enterprise varies with people and countries such that it is better
defined based on the characteristics. In
the Nigerian context, small scale enterprise is any processing, serving or manufacturing
industry with an investment in machinery and equipment above N500,000
Management: - According
to Akpala (1990) Management is the process of combing and utilizing an
organization input (men, materials and money) by planning, organizing, directing
and controlling for the purpose of producing output
Entrepreneur: - According to Hagen, an entrepreneur is an
individual who conceives the idea of business, design the organization of the
firm, accumulates capital, recruits labour, establishes relations with
supplies, customers and the government and converts the conception into a
functioning organization business.
Opportunity:
An opportunity is a potential
gainful situation that must be recognized and exploited, an opportunity has the
qualities of being attractive, durable and timely. It is anchored in product or services which
creates or adds value for its buyers or end users.
Small and Medium
Enterprises (SMEs):
SMEs refer to businesses that are smaller in size and have a limited number of
employees and resources compared to larger corporations. They are often
categorized based on factors such as the number of employees, annual turnover,
or total assets. In Nigeria, SMEs play a significant role in economic
development and include businesses like small manufacturing companies, retail
shops, and service providers.
Banking Sector:
The banking sector consists of all financial institutions and organizations
involved in the business of banking. This includes commercial banks,
microfinance banks, and other financial institutions. In Nigeria, the banking
sector plays a crucial role in providing financial services to individuals and
businesses.
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