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AN ASSESSMENT OF THE IMPACT OF SMALL AND MEDIUM SCALE ENTERPRISES IN RURAL DEVELOPMENT (A CASE STUDY OF SELECTED SOLID MINERAL COMPANIES IN IKPESHI)
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.
Title Page i
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
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
5.1 Summary of findings 59
5.2 Conclusion 60
5.3 Recommendations 60
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.
Ho: Small scale industry does not contribute to economic development.
Hi: Small scale industry contributes to economic development.
Ho: Poor management does not affect the survival of mall scale industries.
Hi: Poor management affects the survival of mall scale industries.
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.