ABSTRACT
The study titled “an assessment of the impact of
small and medium scale enterprises in rural development” aimed at highlighting the existing potential uses
of small scale business cal play in the economic growth of rural areas in
Nigeria with a focus on mineral companies in Ikpeshi, Edo State. In course of
the research, it was found that there was a positive relationship between small scale
business and economic development, thus small scale business contributes to
economic development. Also, there was a partial relationship between poor
management and survival of small scale business. Finally, it was recommended
that individual should be encouraged to set up small scale business so as to
create more employment opportunities and also to enhance economic development
in rural areas and as to increase marginal propensity to save among the employed.
Again, financial institutions should grant loans to intending business owners
and also entrepreneurs who wish to expand their business should also be
encouraged so as to enhance the survival of business organization.
TABLE CONTENTS
Title
Page i
Certification ii
Dedication iii
Acknowledgments iv
Abstract v
Table
of Contents vi
CHAPTER ONE: INTRODUCTION 1
1.1 Background to the Study 1
1.2 Statement of the Research Problem 3
1.3 Research Questions 3
1.4 Research Hypotheses 4
1.5 Purpose of the Study 5
1.6 Relevance of Study 6
1.7 Scope of Study 6
1.8 Limitations of the Study 9
1.9 Definition of Terms 9
CHAPTER TWO: LITERATURE REVIEW 12
2.1 Introduction 12
2.2. Characteristics of Small Scale
Business 14
2.3 Managing Small Scale Business 16
2.4 Financing Small Scale Business 24
2.5 Importance of Small Scale Business
Organization
of
the Economy 28
2.6 Problems Confronting Small Scale
Business
Organization 31
CHAPTER
THREE: RESEARCH METHODOLOGY 36
3.1 Introduction 36
3.2 Research Design 36
3.3 Population of the Study 37
3.4 Sample Size/Sampling Procedures 37
3.5 Method of Data Collection 37
3.6 Instrument of Data Collection 38
3.7 Method of Data analysis 39
CHAPTER
FOUR: DATA PRESENTATION AND INTERPRETATION 40
4.1 Introduction 40
4.2 Presentation of Data 40
4.3 Analysis of Data 51
4.4 Hypothesis Testing and
Interpretation 52
CHAPTER FIVE: SUMMARY, CONCLUSION AND
RECOMMENDATIONS 59
5.1 Summary of findings 59
5.2 Conclusion 60
5.3 Recommendations 60
References
63
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
The economic system of
a modern world is soften through it as being manipulated by joint corporation
opportunities to achieve weather and personal qualifications through small
scale business ownership have not been excel tent. Through small business man have
come to occupy important economic and cultural role in the society, little or
no attention has been given to the development of small scale enterprises in
Nigeria but few eventually succeed.
A close look at the
role of establishment of small scale business in Nigeria particularly in the
rural area suggest that there exist a number from the establishment of growth
small scale business in Nigeria.
The high rate of
failure is indicative of the fact that such as undertaking may be extremely
hazardous and unrewarding for unitary and unknowledgeable.
However, the need to
develop small scale business sector is being recognized, the recognition of
this need to develop small scale business sector. Business enterprise play in
the development of the nation, the economic situation which is not very stable
reflects that low income per capital limit the saving capacity of the people
without adequate saving the problem of low capitalization cannot be completely
eliminated.
Based on this, the
government has introduced many measures to improve the operational activities
of small scale business enterprises.
These include the urge
to set up small scale business loan guarantee scheme to encourage the flow of
loans to borrowers, provision of infrastructural facilities like motorable
roads, electricity supply, telephone services, boreholes etc. It is however to
understand the effectiveness of these measures because of the number of
organizational problem of the concept of small scale business enterprises in
Nigeria.
For these problems to
be eliminated, solution needs to be given in order that people and the
government can achieve their goals.
Against the background,
this study is designed to examine the role of small scale industries in the
economic development of the rural areas, using solid mineral companies Ikpeshi,
Edo State as a case study.
1.2
STATEMENT OF THE RESEARCH PROBLEM
Small scale business
occupies a very vital position in the business world; this makes it imperative
to identify its problems so as to achieve desired result.
In order to achieve the
objectives of this research, the following statement of problems have been
identified.
i.
To determine the
cause of small scale business failure.
ii.
To identify
factors that discourages business owners and individuals from establishing
small scale business.
iii.
To examine the
reason for small scale business contribution to the economic growth.
iv.
To identify
causes of low sources of finance of small scale business.
1.3
RESEARCH QUESTIONS
The following questions
shall be analytical answered and supported with empirical evidence.
i. Do small scale industries exist in Ikpeshi
Edo State areas?
ii. If they exist, are they playing their
economic roles in the development of the areas?
iii. Are the types of small scale industries
available?
iv. Do Small Scale industries
providing materials which are needed in the large scale industries?
v. Do
the small scale industries meet the local needs of the community?
1.4 RESEARCH HYPOTHESIS
In order to achieve the objectives of
this research, the following hypotheses which are in the null form were tested.
Hypothesis I
Ho: Small scale industry
does not contribute to economic development.
Hi: Small scale industry contributes
to economic development.
Hypothesis II
Ho: Poor management does
not affect the survival of mall scale industries.
Hi: Poor management affects
the survival of mall scale industries.
Hypothesis III
Ho: Lack of adequate
capital does not hinder the survival of small scale industries.
1.5 PURPOSE
OF THE STUDY
The purpose and aim of this research is
to highlight the existing potential uses of small scale business cal play in
the economic growth of rural areas in Nigeria with a focus on mineral companies
in Ikpeshi, Edo State.
It is also objective of this study of
offer strategic means of ensuring efficient utilization of sources in the light
of the prevailing economic situation in the country. To this and this research
work is expected to achieve the following specific objectives.
i.
To identify the role of small scale
industries in Nigeria.
ii.
To highlight strategies of managing
small scale industries.
iii.
To identify the problems of establishing
small scale industries in Nigeria.
iv.
To arouse the interest of both the
entrepreneurs, the government of the need to establish viable small scale
industries.
v.
To pinpoint the role of small scale
industries can play in turning around the economy of Nigeria from under
development to an industrialized economy in the world.
vi.
To further establish the need for the
government to promote small business enterprises (SMEs) as contained to the new
government policy on small business management.
1.6 SCOPE OF THE STUDY
There is an avalanche of small business
enterprise in Nigeria specialization in social economic activities in Nigeria,
this is because Nigeria as a developing country lack the necessary capital to
intensify finance production.
Notwithstanding, the study is designed
to survey the socio economic development of mineral companies in Nigeria, Edo
State.
1.7 RELEVANCE OF THE STUDY
The study is very relevant because at
the stage of our development process, the government of Nigeria is placing
emphasis on development of small scale industries since solution to the problem
of rural-urban migration and unemployment of her citizens.
Again establishment of small scale
industries helps to enhance economic development therefore it is important to
examine the likely problems that could hinder the successful operation of these
industries so that this set back will not hinder their intention of individuals
and government of their growth into large scale operations.
However, one is of the opinion that the
experience of mineral companies will be useful to interest persons thereby
promoting their interest in small scale business.
Finally, this study is established to
enlighten present and potential investors on best to be involved in small scale
business management.
The findings and recommendations
continued in the study are meant to inculcate the culture of planning into the
management of mineral companies Ikpeshi, Edo State in essence, it is the view
of the research that the application of the recommendation of small scale industries
as to survive the retailer very competitive and dynamic business world.
1.8 LIMITATIONS OF THE STUDY
In carrying out the research work, the
research encountered the following problems:
There was time constraint due to the academic stress that result from crash
programme embarked upon by the school during the course of this project work.
Another limitation lies in the honesty
of the respondents in providing the needed information the high cost of
research materials hindered the researcher from going into in-depth research
and thus restricted him to mineral companies Ikpeshi alone equally too getting
the desired information was not the easy as then Auchi Polytechnic lacks
current information material for the existing of the project.
Notwithstanding, the research
painstakingly did his test hence the authoritative and viability of the study
should not be under estimated.
1.9
DEFINITION OF TERMS
In doing this research,
the researcher made use of some technical terms for ease of understanding and
use the following definition have been given.
Entrepreneur: Is the prime imitators of economic activities in a
capitalistic system; he is person who is able to look at the environment,
identify opportunities to improve the environment, material resource and
implement action to maximize those opportunities.
Business:
This is defined as all commercial
and industrial activities that provide goods and services to maintain and
improve our quality of life.
Consumers:
They are the actual or potential
buyers and users of a given product.
Profit
Making: This is aim purpose f
the existence of privately owned business in Nigeria. This is important since
the business owner has to be in position to make a living particularly in this
difficult times.
Managerial
Capability: This can be seen as the
basic training knowledge and skills possessed or acquired by an entrepreneur.
Enterprise:
This can be seen as a business
organization set up to produce goods and services so as to satisfy human needs
and want at profit.
Capital:
This is specific amount of money
that is invested or used by the entrepreneur to start up the business.
Product:
This is anything that can be
offered to the market for attention acquisition or use that is capable of
satisfying a want. It can be tangible goods.
Business
Plan: A business plan is a
written document that contains all the information which guides the
entrepreneur in setting up the business.
Controlling/Monitoring:
This is the process by which the
entrepreneur determines whether organizational goals are being achieved and
whether actual operations are moving according to plan.
Investors:
An investor is a person or an
organization who invests money in a business or anything for a profitable
return.
Development:
This is a gradual growth of
something so that it becomes more mature advanced stronger and organized.
Avalanche:
Avalanche is a mess of snow, ice
and rock that fall down the side of a mountain.
Competitors:
A person or group of persons or an
organization that competes against each other especially in business.
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