Problems and Prospects of Small and Medium Enterprises in Nigeria: A Case Study of Enugu East Senatorial Zone
Chapter One
Objectives of the study
The specific objectives of the study are:-
- To determine factors influencing small and medium enterprises in Nigeria
- To determine the extent finance house strict conditions have affected the development of small and medium enterprise in Nigeria
- To assess the extent poor financing has affected small and medium business operation in Nigeria.
CHAPTER TWO
Literature Review
Conceptual Framework
Small and medium scale enterprises in most developed and economics of which Nigeria is one are the main life wire of the economy. Small scale enterprises have helped in the transformation of many countries South East Asia such as India, Taiwan, Malaysia, Indonesia and the Latin American countries or Itile, Brazil, Uruguany and Argentina.
Small scale enterprises that are adequately managed and properly funded help the government to achieve some macro-economic objectives which include employment creation, mobilization of local resources, mitigiating rural urban migration and poverty reduction. Small and medium scale enterprises also to help in encouraging capacity utilization in agriculture and industries. Small scale enterprises help in income distribution, and encourage development of local technology.
According to Agganwal (2001:96) small and medium enterprise are defined as business enterprises having a maximum asset base of #20 million (US $ 1.78 million) excluding land and working capital. The number of employees is defined as “not less than 10 and not more than 300”. The nation council of industries (NCI) in 1992 streamlined various definitions given to small medium enterprise (SMES). The NCI defined SMEs as those with fixed assets above #1 million –excluding land but including working capital. According to Oyelaram Onyeyinka (2007), small medium enterprise are businesses with turnover of less than 3100 million per annum and/or less than 300 employees.
Nigeria economy like its counterparts in other developing countries, had relied predominantly in small scale agricultural holdings up to the early 1970s when oil was explored in commercial quantity and became the main stay of the country’s foreign exchange earner. Small and medium scales enterprise over the years have been financed largely by commercial banks. Production has been low and the country adopted import substitution strategy of industrialization aimed mainly at producing domestically consumed goods that were formerly imported. At a result of the establishment of development banks in the country, the Nigeria Industrial Development Bank (1964), Nigeria Bank for Commerce and Industry (1973) and Nigeria Agricultural and Cooperative Development Bank (1973), were charged with financing funding needs of specific sub-sectors of the economy. These Development Banks did tremendous work in financing of Industrial and Agricultural businesses up till the maid 1990s when their resources started to dwindle. The Nigeria Bank for Commerce and Industry particularly, catered for small and medium scale enterprises credit scheme (SME).
Small scale business started gaining prominence in Nigeria in the early 1970s when many personal enterprise started springing up. Before this time, agricultural domination the economy. There were a lot of agricultural small holding before and during emergency of oil boom. Over 75 percent of agricultural holding were managed by the small farmers which comprise mainly family business Government agricultural holdings were not more than 10 percent.
High operation cost have hindered repaid small scale industries development in Nigeria because most of the time operation do provide basic required infrastructural facilities, which are the responsibility of the government. For instance power supply is never reliable, these business have to provide stand-by generator for electricity. Most of the operators lack the fund to provide the, even where they can, operating cost are added in their production cost for the customers to bear. Access road are not available especially for agricultural resources, which are supplied to the big industries that require them. There are lots of problems of water supply, they may be compelled to provide boreholes before commencement of production. Security situation in most part of the country are very poor and communication is yet to improve to meet up with the required challenges of current millennium development goal of the government. Procurement of funds by small and medium Enterprise (SMES) from banks and other financial institution are not easy because of high interest rate charges, other administrative difficulties and rigid lending policies.
CHAPTER THREE
RESEARCH METHODOLOGY
In this chapter, the researcher explains the methodology of the study this includes the research design, sources of data, research instrument used and the method of data collection and analysis.
Research Design
This study is a descriptive survey research design. According to Osuala (1990:32) in a survey research, the researcher uses a sample drawn from the population to have an insight to the problem under investigation and uses the research findings to make generalization.
Area of study
This study was carried out in Enugu East Senatorial zone.
Sources of Data
This sources of data included primary and secondary sources.
Primary Sources
The primary sources included all those who were orally interviewed and those who completed the questionnaires.
Secondary Sources
The secondary sources of data included textbooks, journals newspapers, magazines, periodicals, seminar and workshop papers.
Sample Size Determination and sampling techniques
The sample size was determine as follows.
CHAPTER FOUR
DATA PRESENTATION OF ANALYSIS
In this chapter, the researcher presents and analyses the data collected from the respondents.
ANALYSIS AND INTERPRETATION OF DATA
CHAPTER FIVE
SUMMARY, RECOMMENDATION AND CONCLUSION
Summary of Findings
The following findings were made in the course of analyzing the data.
– There has been a phenomenal growth in the number of small and medium ventures for past few years. This is attribute to profitability of the venture, quest for self- employment, easy to management and high patronage.
– The nature and dimension of the small and medium ventures also vary greatly.
– Most of the operators of small and medium enterprises in Enugu East senatorial zone make profit of about N5,000 daily.
– The problem of establishing small and medium ventures operating equipment poor business environment, the scarcity of accommodation on the other hand, the inherent problem in managing small and medium business ideas, lack of efficient preservation system and poor environmental sanitation.
– The in creasing demand for creates a large market for SMES and this added to improving business environment and government commitment to promoting small and medium business enterprises provided bright future prospects for small and medium enterprise.
Conclusion
Based on the research findings the following conclusion can be drawn
- The phenomenal growth of small and medium enterprise is mainly due to the people’s quest to be self employed and not because it is easy to establish or manage.
- Operators face strong competition and so each tries to satisfy his customers so as to maintain his market share.
- Small and medium enterprise, is a viable and profitable venture.
- There are bright future prospects for small and medium enterprise in Nigeria.
Recommendation
The following recommendations are made in the belief that they will promote and stabilize and small and medium enterprise of implemented.
- To overcome the problem of financial constraints the government should re-introduce the small business credit scheme so that beneficiaries can use them to run the small and medium enterprise. Beside seeks for other sources of funds such as trends, relatives and co-operatives societies.
- To solve the problem of lack of managerial skills and lack of business ideas the government, chamber of commerce and other non-governmental organization should regularly organization should regularly organize seminars for potential and actual small and medium enterprise operators where they should be educated on how to plan, organize direct and control their businesses.
- They operators should device effective marketing strategies. This includes such promotional strategies as advertising, good management customers relations at all times.
- The business internal and external environment should be kept decent. Decency is one secret of survival for such ventures. The accommodation should be furnished very well and standard ventilation provided.
- The quality and quantity of their products should be high at all times. This will attract more customers. Besides, operators should exploits ways of producing at low costs and selling act relatively low price. This will make demand to be high always.
- Re-introduction of revolving soft loans for small and medium business by the government and financial institutions.
- Regular seminars for small and medium operators.
- Improvement in the quality and quantity of goods sold in the business.
- Adopting effective promotional strategies and
- Creating decent internal and external business environment.
BIBLIOGRAPHY
BOOKS
- Beckman, J. (1983). Entrepreneurship and the Outlook of American. New York: Free Press
- Fasua, k . (2006). Entrepreneurship Theory, Strategies and Practice. Jos: Larigahic Printers.
- Hanis, C. (1991). Managing Small and Medium Business. London: Pitman Publisher.
- Kotler, P. (1985). Marketing Management: Analysis, Planning, Implementation and Control. London: McDonald and Evans Publishers.
- Olise, M. (2006).The Nature of Small Scale Business in Mimeograph. Owerri: Bon Publisher.
- Osuagwu, L. (2001). Small Business and Entreneurship Management. Lagos; Grey Resources Limited.
- Owualah, S.I. (1999). Entrepreneurship in Small Business Firms. Lagos: Derate Limited.
- Siropolis, N.C. (1997). Small Business Management. U.S.A: Houghton Mifflin Company.
- Savas, E.S. (2000). Privatization and Public-Private Partnerships. New York: Seven Bridges Publisher.
