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- ASSESSMENT OF THE IMPACT OF BANK CREDIT ON AGRICULTURAL DEVELOPMENT (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)
- THE EFFECTS OF GOVERNMENT FUNDING SCHEMES ON DEVELOPMENT OF SMEs IN NIGERIA (A STUDY OF SMIEIS)
- EFFECTS OF SMALL BUSINESS ENTERPRISES ON EMPLOYMENT GENERATION IN NIGERIA (A Case of Isimeme and Sons Nigeria Limited)
- ECONOMIC EFFECT OF ADVANCED FREE FRAUD IN THE BANKING SYSTEM IN NIGERIA
- THE ROLE OF COMMERCIAL BANKS TO THE DEVELOPMENT OF SMALL SCALE INDUSTRIES IN NIGERIA
AN ASSESSMENT OF SMALL SCALE ENTERPRISES DEVELOPMENT ON THE ECONOMIC GROWTH IN NIGERIA (A CASE STUDY OF MOBAT FEED OGUN STATE)
The contribution of Small and Medium Scale Enterprises (SMEs) has been recognized as main sustenance of the economy because of their capacity in enhancing the economy output and enhance human welfare. Although, the SMEs lack of access to relative cheap and effective source of finance have been identified as the major factors hindering their contribution to economic growth. On this basis, this paper assesses the impact of Small and Medium Scale Enterprises (SMEs) to the economic growth of Nigeria with special reference to Mobat Feed Limited. The research employed exploratory and descriptive designs, simple random sampling was adopted in selecting respondents. a sample of forty (40) was drawn from the population and forty (40) questionnaires were administered to the staff of Mobat Feed, Thirty-Six (36) of the questionnaire were retrieved , giving 90% response rate. The data gathered were presented on tables using percentiles, descriptive statistics were also used to appraise certain indicators. The four hypotheses formulated were tested with Chi-Square analysis. The result of the analysis indicated that there is significant relationship between SMEs and economic growth in Nigeria. The study concludes that poor government policies, on tariffs and incentives, bribery and corruption, non-existent entrepreneurial development centers and poor state of infrastructure act as impediments to the growth and development of SMEs in Nigeria. The recommendations are that governments at all levels should endeavor to establish Microfinance institutions for easy access to credit by SMEs, introduce financial literacy in schools, establish entrepreneurial development centers for capacity building, provide enough infrastructure, especially electricity and road network, and finally establish agencies for control of bribery and corruption.
TABLE OF CONTENTS
Cover page i
Title page ii
Table of contents viii
1.1 Background of the Study 1
1.2 The Statement of the Problem 3
1.3 The Purpose / Objective of the Study 4
1.4 Research Question 4
1.5 Research Hypotheses 4
1.6 Significance of Study 5
1.7 The Scope of the Study 5
1.8 Historical Background of MOBAT Feed Limited 5
2.1 Introduction 7
2.1.1 An overview of Small and Medium Scale
Enterprises in Nigeria 8
2.2 Conceptual Framework 11
2.2.1 SMEs & Economic Growth 11
2.2.2 SMEs & Economic Growth: Evidence from
Developed Countries and Nigeria 12
2.3 SMEs Financing: Challenges, Structure and Options 14
2.3.1 Challenges of SMEs Financing in Nigeria 14
2.3.2 Financing Options of SMEs in Nigeria 15
2.4 Empirical Literature 20
2.4.1 SMEs Financing and Economic Growth: Empirical Review 21
2.5 The Global Scale on Small Scale Business 22
2.6 The Need for Small Scale Business in Nigeria 24
2.7 The Problem of Financing Small Scale Business 25
2.8 Attribute to Highly Successful Entrepreneur 27
2.9 Importance of Small Scale Business in Nigeria 27
3.0 Introduction 29
3.1 Research Design 29
3.2 Sources of Data 30
3.3 Population of the Study 30
3.4 Sample Size and Sampling Technique 30
3.5 Description of Data Collection Instruments 31
3.6 Method of Data Analysis 31
DATA ANALYSIS AND PRESENTATION OF RESULT
4.0 Introduction 32
4.1 Personal Characteristics of the Respondent 32
4.2 Presentation of Data According To Research Question 34
4.3 Analysis of Data According to Research Hypothesis 44
4.3.1 Test of Hypothesis One 44
4.3.2 Test of Hypothesis Two 46
4.3.3 Test of Hypothesis Three 48
4.3.4 Test of Hypothesis Four 49
SUMMARY CONCLUSION AND RECOMMENDATION
5.1 Summary 52
5.2 Conclusion 53
5.3 Recommendation 53
1.1 Background of the Study
The development of small scale business in Nigeria by government could be traced back to 1990 precisely of 7th February the draft bill was approved by the legislative arm of government for development of same year Nigeria local Development Board (NLDB) was establish to perform some function to help small scale business in Nigeria. All these activities arm promote the economic growth and also help to create more job, in a better position to boost employee and also increased the standard of living or welfare of the people. Some of Nigeria local development board activities are as follows:
1. The setting up and operation of experimental processing and development of Nigerian product.
2. The promotion of development of village draft and industrial development of the products of Nigeria small scale business developed to attain a high level of efficiency se as to move productivity.
Due to colonial economic arrangement and structure in the country then, it was impossible to cope with his plans. In the 1960s, Federal government emphasized on high industry and assembling plants and not small scale between 2009. 2010 the feed foundation of USA collaborated with the eastern and northern regional government to establish industrial development centers (IDC) in Owerri and Zaria for their purpose of promoting the development of small scale industries the industrial with financial, technical and managerial service the project was later stopped by the civil war in Nigeria.
Small scale enterprises are also in a better position to boost employ raw materials, from one country to other, it is also important to know that definition change over a period of time and depend to large extent in a countries level of development, for example, firms that can be regarded as a micro or small scale in economically advanced country like United State of America or Japan, given their high level of capacity intensity and advanced technology may be classified as medium or ever large in development countries like Nigeria and Ghana.
Definition also change overtime having to change in price level advanced in technology on another consideration, it is important to know that he concept of small scale business focus the economy as a whole, it aims to improve the general standard of the people by making use of the available human and natural (material) resource to attain rapid economy development. The development have means where loan mind are creative and it also stand as a means of providing employment from the poor state of Nigeria economy at least. Since the beginning of 2000 is that many are learning and wishing to be on their own rather than looking up to government for employment. Today there are many universities college graduates who have established business of their own and are caring on well. Business being ventured into include, poultry, farming, animal rearing, hair dressing, barbing, soap making, block making, commercial transportation, distributive trade, estate agent, tailoring protective agency office and industrial cleaning and so on. All these enterprises are established and managed by individual who desire to be economically independent and also want to contribute their quota to the development of the nation. Now, such enterprises could be of the greatness of Nigeria. Economy perhaps, this is why various government are doing one thing on the other to promote and encourage the development of (private entrepreneurship) small scale business.
This is in term of finance, provision of infrastructural facilities policies and moral encouragement among others. The recent monetary guidelines requiring bank to interest of 10% tax profit in small scale and medium enterprise is a step in a right direction, however there is need for proper implementation and monitoring.
In relating Nigeria small scale business with other developed nation of the world, taking unite state of America as an example, it is important to know that the develop nation economy like U.S.A were built by small scale industries could be traced back to the 18th countries this have contributed so much to the development of the so called developed countries. The large scale business organization in the world today started from small scale industries or business this has help the economy of development country by providing equipment, opportunities increase saving and increase investment.
1.2 The Statement of the Problem
With the adoption of small scale development in Nigeria the people and government of the country are bound for develop feelings and opinion about the research, that could be true that small scale business will help to know whether or not the small scale has impact on Nigerian economy the problem are;
i. The problem of adulterer goods in Nigeria economy
ii. The problem of unemployment in the country
iii. The 10% standard of living in the country
iv. The problem of non-substitute items or good & service
v. The problem of local technology
vi. The problem facing the indigenous entrepreneurs
vii. Poor financing actually affect small and medium business operation
viii. Excessive of poor finance to cope with increased competition in the industry
ix. Lack of competent management
1.3 The Purpose / Objective of the Study
The purpose of the study is summarized as follows
i. To show whether or not it increase the standard of living of people.
ii. To determines factors influencing small and medium enterprise in Nigeria
iii. To find out the type of people that can embarks in small scale business.
iv. To find out the role of small scale in the Nigerian economy
v. To know if small scale enterprises can developed our economic growth in Nigeria
vi. To know when small scale business will not add value to the improvement of Nigeria economy.
1.4 Research Question
i. What are the impacts of small scale enterprise development on the economic growth in Nigeria?
ii. Does small scale business increases per – capital income of Nigeria?
iii. To what extend do small scale business reduce unemployment in Nigeria?
iv. Does Small scale business improves employment rate in Nigeria?
1.5 Research Hypotheses
The null hypothesis is represented by HO, the alternative hypothesis is represented by H1,
1. Ho: Small scale business does not bring about development in Nigeria
Hi: Small scale business brings about development in Nigeria economy
2. Ho: Small scale business does not improve the per-capital income in
Hi: Small scale business improve the per-capital income in Nigeria.
3. Ho: Small scale business does not improve employment rate in Nigeria.
Hi: Small scale business improves employment rate in Nigeria
4. Ho: Small business does not improve the standard of living in Nigeria
Hi: Small scale business improves the standard of living in Nigeria
1.6 Significance of Study
Some of the significance of the study is as follow;
i. To improve local technology in Nigeria.
ii. To promote the indigenous local content industries
1.7 The Scope of the Study
The study will focus mainly on small scale business in Nigeria and how they can promote the Nigerian economy. The study will be limit to small scale business using Mobat feeds.
1.8 Historical Background of MOBAT Feed Limited
MOBAT feed limited Ogun State produced animal fees is a well patronized form in Ogun State and its environment. It was established and commenced operation in all gist 13th 1989 i.e. about 20 years ago; the business is situated all Igbesa Lusade Market Road. The chairman of it Chief Executive Officer (CEO) the person of Chief Fasua Adebayo.
Production has been low and the country adopted import substitution strategy of industrialization aimed. As a result of the establishment of development banks in the country the Nigeria Industrial Development Bank (1964) Nigeria Bank for Commerce and co. Operative development bank (1973) were charged with financing funding needs of specific sub-sections of the economy. The organization is also into the business of Agricultural production, specializing in animal food. However the farm gained popularity and has been able to exist till date through the selling of eggs, life fish and others. When the company was established in 1989 it started with about four workers, the four workers also include the Chief Executive Officer of the farm.
The farm has been contributing to the development of Ogun State and its environment and has also contributed to the increases in standard of living of the people of Ogun State most especially the youth through the provision of employment opportunities.