Promotion of Small Scale Enterprises and Their Contribution to the Economic Growth in Nigeria
OBJECTIVE OF THE STUDY
The following objectives will be ascertained;
- To identify the challenges faced by small scale enterprises in Nigeria in accessing finance and business development services.
- To examine the role of government policies and programs in promoting the growth and sustainability of small scale enterprises in Nigeria.
- To determine the managerial skills needed for the growth and sustainability of small scale enterprises in Nigeria.
REVIEWED OF RELATED LITERATURE
Generally speaking, the definition of small scale business varies from country to country, from industry to industry and from one financial institution to another. If project cost is used as the criteria for measuring the size of a business, price inflation may render the definition meaningless over time. If the number of employees engaged in a business forms the yardstick for measurement, it may not be realistic bearing in mind that some firms are capital intensive needing only very few employees. Other firms are labour intensive employing large number of people but utilizing only small capital fund (Osadi, 2007). The Federal Ministry of Industries (2001) defined a small scale enterprise as an enterprise whose total cost including working capital but excluding cost of land, does not fall below One Million Naira and does not exceed Forty Million Naira and having number of employees between 11 to 35 workers. The Committee for Economic Development in the United States of America considered a business to be small when, at least, two of the following features prevail:
- The person managing the business is the owner
- Capital is provided by the individual owner(s) of the business The area of operation is local
- The size of the business within the industry is small when compared with the bigger units in its field.
The World Bank defined small scale enterprise as any on-going concern whose total project cost is not more than N30,000.00. Today this definition has lost its relevance, at least in Nigeria, due to the effect of inflation.
The Nature of Small Scale Enterprise
A small scale enterprise can be defined in many ways. The parameters for the definition include value of assets, number of employees, sales revenue, size of capital, and turnover rate. A small scale enterprise is one that is independently owned and operated, and in which the owner is the sole decision maker and the overall boss (Onuoha, 1944). In general, a small scale enterprise is a business in which its owner influences the entire decision-making process and the business has relatively small market share and low capital requirement for its operation. A small scale enterprise has also been described as a small business in which the manager personally performs all the functions of management. Other authors see small scale enterprise as a manufacturing establishment employing less than ten (10) workers and having capital base not exceeding N2 Million Naira. The American small business Act of 1953 also advanced its own definition. The act defined a small scale enterprise as a business which is independently owned and operated and is not dominant in its field of operation.
Characteristics of Small Scale Enterprises
A major characteristic of small-scale enterprises in Nigeria relates to ownership structure which largely revolves around a key man or a family. Hence, a preponderance of the small-scale enterprises is either sole proprietorships or partnerships. Even where the registration status is takes the shape of limited liability company, the true ownership structure is that of a one-man or partnership business. Policy makers and scholars such as Dozie (1995), Owualah (1999), and Lawal (2000), described the characteristics of small scale enterprises as follows:
(1) Personal savings of the owner forms the start-up capital of the business
(2) Low Initial capital requirement
(3) Simple technology
(4) Low level of managerial skills
(5) Difficulty in accessing external funds for establishing and running the business
(6) Keeping little or no accounting records of the business
(7) Reluctance in risk taking by the owner to expand the business
(8) Low level of education and technical expertise on the part of the business owner
(9) Little influence on the market and small market share.
10. Small scale enterprises general have high mortality rate.
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine promotion of small-scale enterprises and their contribution to the economic growth in Nigeria. Selected SME in Lagos state form the population of the study.
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
SUMMARY, CONCLUSION AND RECOMMENDATION
It is important to ascertain that the objective of this study was to ascertain a promotion of small-scale enterprises and their contribution to the economic growth in Nigeria . In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of promotion of small-scale enterprises and their contribution to the economic growth in Nigeria
This study was on promotion of small-scale enterprises and their contribution to the economic growth in Nigeria. Three objectives were raised which included: To identify the challenges faced by small scale enterprises in Nigeria in accessing finance and business development services, to examine the role of government policies and programs in promoting the growth and sustainability of small scale enterprises in Nigeria and to determine the managerial skills needed for the growth and sustainability of small scale enterprises in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected SMEs lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Small scale enterprises are essential agents of economic growth and national development. Their activities affect the life of the rural and urban dwellers through the employment opportunities they provide to the generality of the people of Nigeria. More importantly, they are able to engage large number of applicants because they employ both unskilled and semi-skilled individuals. . Because people engaged to work earn money, they can acquire goods and services to better their lives and thus there is general rise in the standard of living. There is the common saying that “The idle mind is the Devil’s Workshop”. The presence of the small scale enterprises and the provision of jobs to unemployed people keep the idle mind busy thinking and doing the job assigned to the individual. For this reason, there is no room to think evil, like engaging in armed robbery, taking part in cheating gullible masses and carrying out 419 operations. Thus the society is, a bit, at peace due to the actions and activities of the small scale enterprises.
There is the need for the Nigerian government to put in place new policy guidelines aimed at making the acquisition of funds easier for the entrepreneurs of small scale businesses.
The entrepreneurs of small scale enterprises must endeavour to establish more businesses in both the rural and urban centres to provide more goods and services for the teeming population of Nigeria.
Entrepreneurs should aim as giving some basic skills training to the unskilled and semiskilled people engaged to work for them so that they can contribute more positively to the work of the enterprise.
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