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Banking and Finance Project Topics

Impact of Small and Medium Scale Enterprises on Economic Development in Nigeria

Impact of Small and Medium Scale Enterprises on Economic Development in Nigeria

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Impact of Small and Medium-Scale Enterprises on Economic Development in Nigeria

Chapter One

OBJECTIVESย OFย THEย STUDY

This study seeks to identify the role of the small-scale enterprise in the overall development of the nationโ€™s industrial sector.

It also aims at finding ways of making small scale enterp5risesย more effective in order to enhance to economic development of theย nationโ€™sย indigenousย technology.

Moreover, in this study, attempt will be made to achieve theย following:

  • To assess the importance of the identified roles of small scale enterprises in the development of Nigerian
  • To determine whether or not the Nigerian small scaleenterprisesย makeย useย ofย allย theย credit facilitiesย availableย toย themย and the reasons for theย stand they take in relation with theirย initial
  • 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
  • To evaluate the problems encountered I utilization of the available opportunities and or facilities as regards fixed assets like land and
  • 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
  • To ascertain whether or not government policies have been favourable to the establishment of small scale enterprises especially as it concerns power
  • To assess the level of consumersโ€™ preference to imported goods and determine the rate at which it affects the establishment and activities of small scale enterprises in

CHAPTERย TWO

ย LITERATUREย REVIEW

ย MEANINGย ANDย CONCEPTย OFย SMALLย BUSINESSย ENTERPRISE

Inย manyย respects,ย theย meaningย andย conceptย ofย smallย businessesย cannotย beย completelyย isolatedย fromย theย operationalย environment.ย Thus the perception and definition is highly dependentย on the particular economy that provides the environment of operation.ย In Nigeria, there seems to be no clear cut definition or scope forย determining small business enterprise.ย However varied definition andย scopeย wereย madeย byย someย agenciesย asย follows:

  • The national directorate of employment defined it as being abletoย accommodateย projectย withย capitalย investmentย asย loanย asย N5,000ย andย employingย asย fewย asย three
  • The Central Bank of Nigeria in its monetary policy guidelines1980 defined small scale business as an enterprise whose annual turnover rangers between N25,000 and N50,000, also the Federal Ministry of Industries before the Structural Adjustment Programme [SAP] and Foreign Exchange Market, defined small scale business as any manufacturing, processing or service industry with capital investment of not more than N150,000 in plant and machinery.
  • The Nigeria Bank for Commerce and Industry also defines thesmall scale enterprise as firmsโ€™ or companies with assetsย [including working capital but excluding land] not exceedingย N750,000ย andย paidย employmentย ofย upย toย 50ย persons an suchย anย establishmentย beย whollyย ownedย by

Measuringย theย appropriatenessย ofย someย ofย theseย definition,ย Nwakobi [1985] criticized most of the definition describing them asย merely โ€œinstitutionalโ€ Nwabobi holds the views that the definitions doย notย painย aย healthย pictureย ofย theย growthย ofย smallย scaleย businessย enterprise, considering theย difficultiesย involved in capitalย formationย and other discrimination of attitudes of the banks towards the ownersย of small scale business enterprise.ย In July, 2001, the national councilย on industries at the 13th meeting in Markurdi, Benue State, reviewedย and adopted the following classification ofย industrial enterprises andย came up with the definitionย thatย โ€œA small scale industry is an industryย withย total capital employedย of overย N1.5ย millionย butย not moreย thanย N50 million including working capital but excluding cost of land and of aย labourย sizeย ofย 11ย -100ย workers.

However,ย comparatively,ย mostย developย countriesย seemsย toย have agreed on a maximum unit of 500 employees as a small firmย [Feldman 1989].ย However, a review of the performance induct ofย small scale business can be best anchored on the United Nationsย industrial development organization definition of small scale businessย asย โ€œanย economicย ventureโ€ย thatย isย characterized byย theย following:

  • Ownershipandย managementย beingย vestedย inย theย sameย Individual
  • Capital being made available by an owner on whom the policyDecisionsย rest
  • Having a coalised operational area
  • A situation of a venture controlling a small share of the market Their by constituting a little quota in the large sized market
  • The owner participating very actively in all decision makingProcesses on aย dayย toย dayย operationย basis withย aย highย degreeย Ofย rigid

Reflecting the characteristics, small scale business enterprises have emerged, especially in the developing world, with roles of employment generation, encouragement of rural development, assisting substantially in lifting gross domestic product, developing entrepreneurship and proving avenue for self employment.

 

CHAPTERย THREE

RESEARCHย METHODOLOGYย ANDย DESIGN

Thisย perhapsย isย theย cruxย ofย theย studyย andย theย backgroundย against which the findings and conclusions are based.ย This phase ofย the research consists therefore of the methods and approaches ofย collectingย informationย andย data forย theย researchย purpose.

ย RESEARCHย DESIGN

This is the major framework of collection, measurement andย analysis of data. ย ย The data used in this research came from twoย broadย services.

  • Secondary Sources:–ย these sources of data were utilizedย mainlyย inย theย reviewย ofย relatedย ย Thisย informationย wasย obtainingย fromย textbooksย magazine,ย journals,ย publishedย researchย work,ย seminarsย workshopsย papers,ย micrographย etc.
  • Primary Sources:ย -these sources of information were rawย dataย obtainedย throughย questionnairesย andย ย Theย questionnairesย wereย structuredย becauseย ofย theย simpleย factย that

respondents feel more at home with questionnaires than with thoseย that require them to indicate their responses.ย The questions wereย unambiguous and easy to answer with enough spaces provided forย open-endedย questions.

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SAMPLEย SIZEย USED

In order to obtain an external validity and to make the study ofย the problems which otherwise could not be undertaken due to theย limitations of financial resources time and other academic and socialย demands.ย A population size of 103 respondents was used to helpย analyze data from the questionnaires. ย ย In determining the sampleย size, Yamani formular was used with the assumption of a confidenceย levelย ofย 95%.ย Thisย is:

CHAPTERย FOUR

DATAย PRESENTATIONย ANDย ANALYSIS

Thisย chapterย dealsย withย theย presentation,ย descriptionย andย analysisย ofย dataย collectedย fromย theย sampleย studies.ย Theย resultsย represent the answers by the respondents to the questionnaires andย interviews.ย Data obtained from these are shown with the aids ofย tables.ย Respondents are grouped in accordance with their reactionsย to each of the questionsย and their percentages computed againstย total sample size.ย It is also in this chapter that the hypothesis earlierย formulatedย inย chapterย oneย willย beย tested.

CHAPTERย FIVE

SUMMARYย OFย FINDINGS,ย CONCLUSIONย ANDย RECOMMENDATION

This research work โ€œimpact of small and medium scale enterprise on economic development in Nigeriaโ€ wasย conducted with the use of questionnaire to sample the opinion ofย tradersย onย whatย impactย hasย smallย scaleย enterprisesย inย theย developmentย ofย indigenousย technologyย capabilityย inย Nigeria.

SUMMARYย OFย FINDINGS

The preceding analysis has revealed that small scale business has a vital role in the development of indigenous technology capability in Nigeria and through their wide dispersal. They should provide an effective means of mitigating rural urban migration and resources utilization. And this also will contributes in strengthening industrial linkages by producing intermediate products for use in large enterprise in Nigeria. The researcher also finds and showed that government tax policies have not been favourable in the establishmentย ofย smallย scaleย enterprisesย inย Nigeria.ย Governmentย should know how it will be amending some of these tax policies theyย feelย isย affectingย theย establishmentย ofย smallย businessย inย orderย toย encourage more people into venturing into it.ย Government shouldย alsoย encourage theย growthย of smallย businessย by givingย themย theย necessary assistance as regards to fund raising and equally adviceย themย onย howย toย utilizeย itย effectively.

CONCLUSIONS

Hardly can any major industry succeed without the services of small business enterprises. The relative strength of their importance varies from one industry to another. The role of small scale businesses in the development of indigenous technology capability in Nigeria cannot be over-estimated. Firstly, the continuing growth in the economy of any nation depends to a large extent on the start ups of small businesses, which depends on locally fabricated machinery and local raw material inputs. Secondly, it is a considerable solution to balance of payment problems resulting from less dependence on imported inputs and also serves as a training school for the indigenousย entrepreneursย andย providesย groundsย forย theย acquisitionย ofย skillย forย aย largeย numberย ofย workers.

RECOMMENDATIONS

The researcher after discussed the findings and conclusionsย recommendedย thatย theย smallย scaleย businessย contributesย inย strengthening industrial linkages by producing intermediate productsย for use in large enterprise in Nigeria.ย The researcherย also showedย thatย governmentย taxย policiesย haveย notย beenย favourableย inย theย establishment of small scale enterprises in Nigeria for many yearsย now.ย So government should know how it will be amending some ofย these tax policies they feel is affecting the establishment of smallย business in order to encourage more people into venturing into it.ย Government should also encourage the growth of small business byย giving them the necessary assistance as regards to fund raising andย equallyย adviceย themย onย howย toย utilizeย itย effectively.

Also,ย smallย businessesย shouldย formย mergers;ย byย thisย theirย capital would be placed in a better position when dealing with lendingย institutions.ย Theirย taxย burdenย willย notย beย heavilyย feltย again.

BIBLIOGRAPHY

  • Akpata, B. (1990): The Role of Entrepreneurship in Business
  • Broom, and Longnecker (1972): The Impact of Entreprenuerialย Developmentย inย anย Economy.
  • Ezeh,ย J.ย (1997):ย Theย Roleย ofย Smallย scaleย Businessย inย Nigeriaย Economy.
  • Feldman,ย C.ย (1989):ย Theย Importanceย ofย Smallย andย Mediumย Scaleย Enterprises.
  • Harper Boyd, Ralph Westfall and Stanlves (1997): Marketingย Researchย Testย andย Casesย (Illinoisย Richardย D.ย Irwinย Inc).
  • Huglice,ย andย Musselmanย (1973):ย Smallย scale Enterprisesย andย theย Economy.
  • Martin,ย Shawย andย Jackย Wrightย (1977):ย Scaleย forย Measurementย ofย Attitudeย (Newย York:ย Mcย Grawย Hillย bookย company).
  • Nwakobi, E. (1985): Small scale Enterprise and the Economy.ย Nwobi, F.N.ย Statistics 1ย (Anย Introductoryย Text)ย Bonย Publishersย 1998.
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  • Waboi,ย A.ย (1987):ย Theย Impactย ofย Smallย andย Mediumย Scaleย Businessย inย anย Economy.
  • Yewande,ย M.ย (1991):ย Theย Roleย ofย Governmentย inย theย Developmentย ofย Smallย andย Mediumย Scaleย Enterpriseย inย anย Economy.

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