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Product Category: Projects
Product Code: 00003767
No of Pages: 109
No of Chapters: 5
File Format: Microsoft Word
Price :
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This
study sets out to examine the relationship between borrowing and the
performance of small and medium scale enterprises in
TABLE
OF CONTENTS
Title page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of Contents vi
CHAPTER
ONE: INTRODUCTION 1
1.1
Background
of the Study 1
1.2 Statement
of Problem 4
1.3 Purpose
of the Study 5
1.4 Research
Questions 5
1.5 Statement
of Hypotheses 6
1.6
Scope
of the Study 6
1.7
Significance
of the Study 7
1.8
Definition
of Terms 7
CHAPTER
TWO: REVIEW OF RELATED
LITERATURE 8
2.0
Introduction
8
2.1 An Overview of Small and Medium Enterprises
Financing
in
2.2
Problems Militating Against the
Development of Small and
Medium Scale
Enterprises in
2.3
Factors affecting the Growth of Firms 13
2.4
An Overview of SMEs Financing and
Regulatory
Environment in
2.5
Sources of Financing SMEs 27
2.6
Effective Financing of Small and Medium
Scale Enterprises
(SMEs) as an Impetus
for Poverty Alleviation in
CHAPTER
THREE: Research Design and
Methodology 31
3.1 Introduction
31
3.2
Research Design 31
3.3
Population of the Study 31
3.4
Sample and Sampling Technique 32
3.5
Sources of Data 32
3.6
The Instrument 32
3.7
Procedure for Data Collection 33
3.8
Procedure for Data Analysis Method 33
4.1
Introduction
34
4.2
Data
Presentation 34
4.3
Analysis
of Research Questions 37
4.4
Hypothesis
Testing 41
CHAPTER FIVE: Summary,
Conclusion and Recommendations 43
5.1
Introduction
43
5.2
Summary
of Findings 43
5.3
Conclusions
44
5.4
Recommendations
45
References 47
Appendices 51
CHAPTER ONE
INTRODUCTION
1.1
Background of the Study
In
the present day economies of the world, small and medium scale enterprises have
come to be recognized as veritable engines of growth, employment, poverty reduction and innovative
development. Government of various
nations and indeed, world economic development and financial institutions such
as the Brethonwood Institution (International Monetary Fund and World Bank),
the United Nations have all in recognition of the potentials of SMEs embarked
on deliberate developmental policies aimed at creating a productive base for
world economies (Englama, et al, 1997).
Lofty
as these aims and aspirations are, the problem of finance has remained
insurmountable. For instance, Fatunla and Adebayo (1985) note that inadequate
finance has always been a constraint to the development of small-scale
industries. Oshunbiyi (1989) equally noted the critical role of finance at
every stage in an organization’s life and the restricted access of small
industrialists to the capital market and opines that they could improve their
financial position through exploitation of institutional credit sources or
borrowing from banks.
As
emphasized by Harper (1995), with the large increase in world population
(especially Nigerian and many developing countries) “governments can certainly
not afford to employ many more, and larger scale industry as this has
dramatically failed to absorb more than a tiny fraction of the multitudes who
need jobs. In many countries small enterprises are, therefore, possibly the
hope of employment creation, and it is hardly surprising that policy-makers in
developing nations and almost everywhere else have so eagerly strived to
promote and encourage them”. The availability of efficient infrastructural
services is a key requirement for the take-off of private investment (CBN,
2000). The take-off and efficient performance of any enterprise, be it small or
large, will require the provision of funds for its capitalization, working
capital and rehabilitation needs, as well as for creation of new investments
(Nnanna, 2001).
Reflecting
countries experiences, SMEs employ more than 50 percent of the industrial
workforce in
Studies
have shown that, SMEs have in many countries, provided the mechanism for
stimulating indigenous entreprenuership, enhancing greater employment
opportunities per unit of capital invested and aiding the development of local
technology (Sule, 1986; World Bank, 1995). They help to mobilize savings for
investment and promote the use of local raw materials. Through their dispersal
nation-wide, they contribute to more equitable income distribution among
individuals and regions, as well as mitigate rural-urban migration.
In
view of these advantages, greater attention has been given to the promotion of
SMEs globally as tool for poverty alleviation and economic development. Even in
the most buoyant economies, such as the
In
the same vein, the
One
of the major economic tools being used in combating slow economic growth and
poverty in various nations is the complete turn-around of the economy from
consumer economy to productive economy by rendering assistance to SMEs through
adequate financing and creation of enabling environment.
1.2 Statement
of Problem
One
of the critical problems facing economic growth in African Sub-Saharan and
indeed the developing countries generally is the harnessing of resources to
achieve desired goals.
In
the case of the SMEs in
The
issue of inadequate financing usually derives from inadequate proprietorship
and equity participation. A strong capital base and financial outlook are
required for successful business. However, small scale entreprenuers are
usually reluctant to bring in partners, even at the risk of
under-capitalization. The under-funding of SMEs has led government to formulate
measures aimed at assisting this sector in form of loan packages through World
Bank, National Directorate of Employment, National Economic Reconstruction Fund
(NERFUND) and other financial assistance schemes.
Owualah
(2001) argues that, among the problems of small scale business whether by their
owners or by those interested in their well being, their financial problems
have tended to overshadow others which they also encounter in their daily
struggle for survival. In other words, their other problems in production,
marketing, personnel and even day-to-day management usually have a financial
colouration. The success of these enterprises however, will depend largely on
the efficiency of the financing strategies they employ.
1.3 Purpose
of the Study
This
study sets out to investigate the effect of borrowing on Small and Medium Scale
Enterprises.
Other
specific objectives are:
-
To
establish the most difficult problem facing SMEs.
-
To
discover reasons for borrowing.
-
To
investigate how often borrowing is done.
-
To
establish the major source of borrowing.
-
To
determine the extent to which borrowing has negatively impacted on SMEs
performance.
-
To
make recommendations based on facts obtained from answers to the research
questions.
1.4 Research
Questions
The
following research questions were raised in this study:
-
What is the most
difficult problem facing SMEs?
-
How often do
SMEs borrowing money?
-
What is the
major source of borrowing available to SMEs?
-
What problem(s)
is associated with borrowing?
-
To what extent
has borrowing negatively impacted on the small and medium enterprises’
performance?
-
What will be the
state of SMEs performance if financial problem is solved?
1.5 Statement
of Hypothesis
The following research hypotheses were
formulated and tested in this study:
H0: There
is no significant difference among respondents that borrowing has positively
impacted on the small and medium scale enterprises performance in
H1: There is a significant difference among
respondents that borrowing has positively impacted on the small and medium
scale enterprises performance in
Adequate
funding has
no significant influence on the small and
medium scale enterprises performance in
Adequate
funding has
significant influence on the small and
medium scale enterprises performance in
Commercial bank does not play any
significant role in the growth and development of SMEs in
Commercial bank play significant role in
the growth and development of SMEs in
1.6 Scope
of the Study
The
scope of the study is within the concept of SMEs and the place of finance in a
developing economy like
The
scope of the study is also limited to some SMEs
located in Mainland Local Government Area of Lagos State.
This study will
be constrained by time, finance and sourcing out of relevant materials and
respondents’ unreadiness to give out correct information on the subject-matter.
1.7 Significance
of the Study
The
significance of this research study on the contribution of SMEs in the
developing economy cannot be overestimated, as this study will be of benefit
to the management and operators of SMEs and the governments, the small and
medium scale entrepreneurs, and individual stake holders. The study will help
to define to the problems and challenges being faced by most SMEs. Governments
of both federal and states would have an insight through this study because it
will enable them to grant more funds to the SMEs in
1.8 Definition
of Terms
Financial Institutions: This is referred as places where
funds are kept and lent out to prospective customs or individuals.
Capital Market: This is where stocks are bought
or sold.
Borrowing: This means obtaining some loans (funds)
from a bank or other financial institutions in order to expand one’s business
enterprise.
CBN: Central Bank of
Small - Scale Industry: An industry with a labour size of 11-100 workers
or a total cost of not more than N50 million, including working capital but,
excluding cost of land.
Medium Scale Industry: An industry with a labour size of between 101-300 worker’s or a total cost of over N50million, but not more than N200million, including working capital, but, excluding cost of land.
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