Impact of Small and Medium-Scale Enterprises on Economic Development in Nigeria
Chapter One
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:
- 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 scaleenterprises make use of all the credit facilities available to them and the reasons for the stand they take in relation with their 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 consumers’ preference to imported goods and determine the rate at which it affects the establishment and activities of small scale enterprises in
CHAPTER TWO
LITERATURE REVIEW
MEANING AND CONCEPT OF SMALL BUSINESS ENTERPRISE
In many respects, the meaning and concept of small businesses cannot be completely isolated from the operational environment. Thus the perception and definition is highly dependent on the particular economy that provides the environment of operation. In Nigeria, there seems to be no clear cut definition or scope for determining small business enterprise. However varied definition and scope were made by some agencies as follows:
- The national directorate of employment defined it as being ableto accommodate project with capital investment as loan as N5,000 and employing as few as 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 firms’ or companies with assets [including working capital but excluding land] not exceeding N750,000 and paid employment of up to 50 persons an such an establishment be wholly owned by
Measuring the appropriateness of some of these definition, Nwakobi [1985] criticized most of the definition describing them as merely “institutional” Nwabobi holds the views that the definitions do not pain a health picture of the growth of small scale business enterprise, considering the difficulties involved in capital formation and other discrimination of attitudes of the banks towards the owners of small scale business enterprise. In July, 2001, the national council on industries at the 13th meeting in Markurdi, Benue State, reviewed and adopted the following classification of industrial enterprises and came up with the definition that “A small scale industry is an industry with total capital employed of over N1.5 million but not more than N50 million including working capital but excluding cost of land and of a labour size of 11 -100 workers.
However, comparatively, most develop countries seems to have agreed on a maximum unit of 500 employees as a small firm [Feldman 1989]. However, a review of the performance induct of small scale business can be best anchored on the United Nations industrial development organization definition of small scale business as “an economic venture” that is characterized by the following:
- Ownershipand management being vested in the same Individual
- Capital being made available by an owner on whom the policyDecisions 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 a day to day operation basis with a high degree Of 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.
CHAPTER THREE
RESEARCH METHODOLOGY AND DESIGN
This perhaps is the crux of the study and the background against which the findings and conclusions are based. This phase of the research consists therefore of the methods and approaches of collecting information and data for the research purpose.
RESEARCH DESIGN
This is the major framework of collection, measurement and analysis of data. The data used in this research came from two broad services.
- Secondary Sources:– these sources of data were utilized mainly in the review of related This information was obtaining from textbooks magazine, journals, published research work, seminars workshops papers, micrograph etc.
- Primary Sources: -these sources of information were raw data obtained through questionnaires and The questionnaires were structured because of the simple fact that
respondents feel more at home with questionnaires than with those that require them to indicate their responses. The questions were unambiguous and easy to answer with enough spaces provided for open-ended questions.
SAMPLE SIZE USED
In order to obtain an external validity and to make the study of the problems which otherwise could not be undertaken due to the limitations of financial resources time and other academic and social demands. A population size of 103 respondents was used to help analyze data from the questionnaires. In determining the sample size, Yamani formular was used with the assumption of a confidence level of 95%. This is:
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter deals with the presentation, description and analysis of data collected from the sample studies. The results represent the answers by the respondents to the questionnaires and interviews. Data obtained from these are shown with the aids of tables. Respondents are grouped in accordance with their reactions to each of the questions and their percentages computed against total sample size. It is also in this chapter that the hypothesis earlier formulated in chapter one will be tested.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
This research work “impact of small and medium scale enterprise on economic development in Nigeria” was conducted with the use of questionnaire to sample the opinion of traders on what impact has small scale enterprises in the development of indigenous technology capability in Nigeria.
SUMMARY OF 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 establishment of small scale enterprises in Nigeria. Government should know how it will be amending some of these tax policies they feel is affecting the establishment of small business in order to encourage more people into venturing into it. Government should also encourage the growth of small business by giving them the necessary assistance as regards to fund raising and equally advice them on how to utilize it 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 indigenous entrepreneurs and provides grounds for the acquisition of skill for a large number of workers.
RECOMMENDATIONS
The researcher after discussed the findings and conclusions recommended that the small scale business contributes in strengthening industrial linkages by producing intermediate products for use in large enterprise in Nigeria. The researcher also showed that government tax policies have not been favourable in the establishment of small scale enterprises in Nigeria for many years now. So government should know how it will be amending some of these tax policies they feel is affecting the establishment of small business in order to encourage more people into venturing into it. Government should also encourage the growth of small business by giving them the necessary assistance as regards to fund raising and equally advice them on how to utilize it effectively.
Also, small businesses should form mergers; by this their capital would be placed in a better position when dealing with lending institutions. Their tax burden will not be heavily felt again.
BIBLIOGRAPHY
- Akpata, B. (1990): The Role of Entrepreneurship in Business
- Broom, and Longnecker (1972): The Impact of Entreprenuerial Development in an Economy.
- Ezeh, J. (1997): The Role of Small scale Business in Nigeria Economy.
- Feldman, C. (1989): The Importance of Small and Medium Scale Enterprises.
- Harper Boyd, Ralph Westfall and Stanlves (1997): Marketing Research Test and Cases (Illinois Richard D. Irwin Inc).
- Huglice, and Musselman (1973): Small scale Enterprises and the Economy.
- Martin, Shaw and Jack Wright (1977): Scale for Measurement of Attitude (New York: Mc Graw Hill book company).
- Nwakobi, E. (1985): Small scale Enterprise and the Economy. Nwobi, F.N. Statistics 1 (An Introductory Text) Bon Publishers 1998.
- Oshagbenius, J. (1985): The Impact of Small and Medium Scale Enterprises in Nigerian Economy.
- Waboi, A. (1987): The Impact of Small and Medium Scale Business in an Economy.
- Yewande, M. (1991): The Role of Government in the Development of Small and Medium Scale Enterprise in an Economy.