ABSTRACT
This research work was designed to determine
the role of small and medium enterprise in the development of Nigeria
economy. 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
Certification
Dedication
Acknowledgement
Abstract
Table of Contents
CHAPTER ONE: INTRODUCTION
1.1. Background of the Study
1.2. Statement of the Problem
1.3. Objective of the Study
1.4. Significance of the Study
1.5. Scope and Limitation
1.6. Research Question
1.7. Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
2.1. Meaning and Concept of Small Business Enterprise
2.2. Basic Characteristics of Small Scale Enterprise
2.3. Types of Small business
2.4. Sources of Fund to Small Businesses
2.5. Government Influence on Small business Enterprises
2.6. The Role of Small Scale Business
2.7. Problems of Establishing Small Business Enterprise in
Nigeria CHAPTER THREE: RESEARCH METHODOLGOY AND DESIGN
3.1. Research Design
3.2. Sample Size Used
3.3. Instrument for Data Collection
3.4. Population of the Study
3.5. Validity and Reliability of Instrument
3.6. Method of Data Analysis
CHAPTER FOUR: PRESENTATION OF DATA
4.1. Data Presentation and Analysis
4.2. Testing of Hypothesis
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATION
AND CONCLUSION
5.1. Summary of Findings
5.2. Recommendations
5.3. Conclusions
Bibliography
Appendix A: Introductory
Letter
Appendix B: Questionnaire
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 everincreasing 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 I n 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 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 small scale industries in the
development of indigenous technology can not therefore be over emphasized.
1. 3. OBJECTIVES OF THE STUDY
This
study seeks to identify the role of the small scale
enterprise in
the overall development of the nation’s industrial sector. It also aims at finding ways of making small
scale enterp5rises 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:
[a] To assess the importance of the identified
roles of small scale enterprises in the development of
Nigerian Economy. [b] 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.
[c]
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.
[d]
To evaluate the problems
encountered I utilization of the
available opportunities and or facilities as regards fixed assets like land and locations.
[e]
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.
[f]
To ascertain whether or not
government policies have been
favourable to the establishment of small scale enterprises especially as it concerns power supply.
[g]
To assess the level of
consumers’ preference to imported goods
and determine the rate at which it affects the
establishment and activities of small scale enterprises 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 carryout a full and
unbiased study.
1.5. RESEARCH QUESTION
[1]
What are the roles of small
scale enterprises in the development of Nigerian economy?
[2]
Has lack of land and good
location been a problem in the
establishment of small scale enterprise in Nigeria?
[3]
Does epileptic power supply
in Nigeria hinders establishment of small business enterprises?
[4]
Has unavailability of raw
materials been a problem in establishment of small scale enterprises?
[5]
Has government policies
been unfavourable to establishment of small scale enterprise in Nigeria?
[6]
Does the consumer’s
preference to imported goods adversely affect the establishment of small scale
enterprise in Nigeria? [7] Has
establishment of small scale enterprise been hindered by unviable
market?
[8]
What are the average source
of the initial capital of studied small
business ventures?
[9]
How successfully are their
applications for bank loans and what is
its percentage?
[10] What are the sources of your raw materials?
[11] Does lack of machines and equipment as difficulty in
acquiring them impedes the establishment of small scale enterprise. [12]
Does psychological factors such as lack of confidence lack of creativity,
fear of failure etc been a problem in establishment of small
scale enterprise in Nigeria?
[13]
Does socio – cultural factors such as housewife syndrome, civil servant
mentality, females not seen as good entrepreneurs been
a problem in establishment of small scale enterprise in
Nigeria?
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
[Waboi, 1987].
According to the
centre for management development in a policy proposal to Federal Government in
1982, A small scale enterprise is a manufacturing, processing or service
enterprise involved in a factory or production type operation employing up to
50 full time employees, investment in plant machinery are utilized in its
operation.
•
Management: - According to
Akpala [1990. pg 3] 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 [goods and
services].
•
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.
•
Development: This entails growth of the business, increases
in goods and services and t he improvement of lives of the citizen.
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