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ABSTRACT
This study is a research to the development of small and medium enterprises in Nigeria challenges and prospect of a study of selected firms, it has been observed to be encumbered with problems which negate the lofty aims of small and medium scale business management. Prominent amongst these problems is lack of finance or start up capital available to a medium business entrepreneurs. Using the survey in Bayelsa state municipality. These study revealed that these problems are apparent in all the firms survey. Our findings shows that these problems are direct consequences of improper sources about financial entrepreneurs available to small and medium scale entrepreneurs and improper planning and management of the small scale firms by the owners. It is recommended that bank should educate the small medium business entrepreneurs and also the bank should review and reduces the stringent requirement that is attached to granting loan facilities to small and medium scale industrialist and entrepreneurs. Finally, we recommend that the government of the federation should come up with an industrial package that will aid the establishment of more small and medium scale firms in the federation at this sector in the “seed bed of our economic growth.
TABLE OF CONTENTS
PAGES
TITLE PAGE – – – – – – – – – i
COVER PAGE – – – – – – – – – ii
CERTIFICATION- – – – – – – – – iii
DEDICATION – – – – – – – – – – iv
ACKNOWLEDGEMENT- – – – – – – – v
ABSTRACT – – – – – – – – – vi
TABLE OF CONTENTS – – – – – – – vii
CHAPTER ONE – – – – – – – – – 1
INTRODUCTION- – – – – – – – – – 1
1.1 BACKGROUND OF THE STUDY- – – – – 1
1.2 STATEMENT OF THE PROBLEM – – – – – – 4
1.3 OBJECTIVES OF THE STUDY- – – – – – – 4
1.4 RESEARCH QUESTIONS – – – – – – – 5
1.5 SIGNIFICANCE OF THE STUDY- – – – – – 6
1.6 SCOPE OF THE STUDY- – – – – – – – 7
1.7 LIMITATIONS OF THE STUDY- – – – – – – 7
1.8 DEFINITION OF TERMS- – – – – – – – 8
CHAPTER TWO – – – – – – – – – 11
REVIEW OF RELATED LITERATURE – – – – – 11
2.1 MEANING OF SMALL AND MEDIUM ENTERPRISES – – 12
2.2. BENEFITS/IMPORTANCE OF SMALL AND MEDIUM
ENTERPRISES – – – – – – – – – – 14
2.3 CONTRIBUTION OF SMALL AND MEDIUM ENTERPRISES
TO ECONOMICAL DEVELOPMENT – – – – – 17
2.4 MANAGERIAL TECHNIQUES: – – – – – – – 19
2.5 SOURCES OF FUND TO SMALL AND MEDIUM
ENTERPRISE – – – – – – – – – – 20
2.6 PROBLEMS OF SMALL AND MEDIUM ENTERPRISES – – 21
2.7 PROSPECTS OF SMALL AND MEDIUM
ENTERPRISES IN NIGERIAN ECONOMY – – – – 24
CHAPTER THREE – – – – – – – – – 27
RESEARCH METHODOLOGY – – – – – – – 27
3.1 RESEARCH DESIGN- – – – – – – – 27
3.2 SAMPLING DESIGN – – – – – – – – 27
3.3 POPULATION SIZE – – – – – – – – 27
3.4 SAMPLE SIZE – – – – – – – – – 28
3.5 METHOD OF DATA COLLECTION- – – – – – 28
CHAPTER FOUR – – – – – – – – – 32
DATA PRESENTATION AND ANALYSIS – – – – – 32
4.1 DATA COLLECTION AND PRESENTATION – – – 32
4.2 DATA ANALYSIS – – – – – – – – 32
4.3 DISCUSSION OF FINDINGS – – – – – – 41
CHAPTER FIVE – – – – – – – – – 45
SUMMARY, CONCLUSION AND RECOMMENDATIONS – – 45
5.1 SUMMARY – – – – – – – – – 45
5.2 CONCLUSION – – – – – – – – – 46
5.3 RECOMMEDNATIONS – – – – – – – 46
REFERENCES – – – – – – – – – 49
APPENDIXES – – – – – – – – – 51
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is apparent, that it has been heavily committed to the idea of growth in business units that neglecting the seed beds of enterprises itself. Small and medium scale industries in Nigeria are the nursery units of enterprises (Hollowood 1970, p. 10). Hollowood’s statement above depicts the important roles of small and medium scale industries play in any economy.
Small and medium scale industries occupy a unique position in the economy of any nation the industries can play significant role in providing the necessary support for large scale industrialization and consequent take off of an economy. The exploitation of the vast natural and human resources available in Nigeria for economic development would be a great extent, depending on how the small and medium scale industries are organized. However, there is a general evident that the small and medium scale industries can constitute an important component of the economic development process. Small and medium businesses in the Nigeria economy have continued to battle with problem. Problems precipitated by lack of finance, poor managerial ability, inability to maintain specialized personnel, inappropriate accounting system and limited market have, among other resulted to a high incidence of morality in the industries. It is therefore, imperative that solutions be provided to these problems to enable the full potentials for the small and medium scale industries to be realized for accelerating the pace of economic development in Nigeria. It is important to note that, it is natural to be small and medium, these small businesses of today is likely to be the big business of tomorrow. For example, the general motors, IBM of the USA was once small. Here in Nigeria, entrepreneurs name like Ibru of the guardian news paper limited, M.K.O Abola of the concord pres limited and Alhaji. Aliko Dangote of Dangote Ltd, that have become household names started from small. Base on the foregoing discussion, the continuity of the small and medium scale industries in the economy should be a matter of great concern to all. In Britain for instance, having realized that there were about 1.3 million small firms representing more than 95% of the total number of business in the economy Kirkwood 1982, P. 119), relevant institutional frame work has been provided to ensure the continued operation of small and medium business. In the USA according to Naumes (1978, P.7) “there are currently estimated to be 8 million business organization, operating in the us economy, well over 7 million of these are legitimately classified as small and medium businesses, no matter whose definition is used. They accord for close to half the goods, services and employment generated by the private sector”. Consequently relevant institutional frame work has been established through the SBA Act of 1963 to ensure smooth operations of small medium scale industries, it is therefore, relevant that similar actions are taken in the Nigeria environment by appropriate government agencies to enhance successful operations of small and medium scale business industries, it is important to find out the problems hindering the growth of small and medium scale industries in Nigeria. This research is therefore, aimed at finding out few challenges of small and medium scale industries in Nigeria and to suggest ways of making the situation better.
1.2 STATEMENT OF THE PROBLEM
Over the years, small and medium enterprises in Nigeria have suffered from certain problems or challenges which have hamper their growth. As a result profit has not been realized and it has not generated the needed employment which was hither to envisage and that has affected the development of small and medium enterprises. This research work has identified problems such as managerial in nature, capital and financial or funding, technical as well as commercial in nature that affect the development of SME`S.
Based on the above, the researcher will investigate the identified problems in course of conducting the research on this topic.
1.3 OBJECTIVES OF THE STUDY
The primary purpose of this study is to determine the type of problems hindering the development of small and medium scale businesses in Nigeria. In order to accomplish the above purpose, the following objective small be achieved.
- To determine, if the organizational structure of small and medium scale business in Nigeria affects the development.
- To determine, if poor knowledge about commercial decision making party of the problem confronting SME’S
- To determine the managerial techniques adopted by small and medium scale business industries.
- To determine the funding sources of small and medium scale businesses.
- To identify, if there are attempt by the owners of small and medium organization toward solving the problems confronting their businesses.
- To determine, if lack of knowledge of financial decision a problem facing SME`S.
1.4 RESEARCH QUESTIONS
- Does government intervene in terms of granting loans to help improve the efficiency and services by small and medium scale enterprise?
- Does small and medium scale enterprises, find it difficult to raise money to run their business operations do you agree?
- How often do you receive loans from the government?
- To what extent does inadequate manpower and managerial skills affect the growth of small and medium scale enterprises in Bayelsa State?
- What was the initial capital invested in the business?
- What was the source of your initial capital?
- What is your professional training qualification?
- What is the nature of your business?
- For how long has the business have been existing?
- What is the form of your business ownership?
1.5 SIGNIFICANCE OF THE STUDY
The importance of small and medium scale entrepreneur can hardly be over emphasized. They provide raw materials for the big firms and also service them. For example, they are suitable for providing specialized goods and services. Despite these prominent roles in small and medium businesses play a vital in socio-economic system of the nation, small and medium forms have been given little or no attention in their world countries like Nigeria. It is hoped that the findings of this study will contribute to an effective and efficient operation of small and medium businesses in Nigeria.
1.6 SCOPE OF THE STUDY
The scope of this study is the small and medium enterprises and its objectives, challenges and prospects. What is applicable in a typical African society may also apply in other places like Europe, Asia etc with little or no difference. Considering the project, the scope and reference made, are not limited to specific area or society, but covers all other aspects which the businesses operates.
1.7 LIMITATIONS OF THE STUDY
The limitation is a characteristic of all human endeavours the research work is not devoid of certain unvoiced constraints these are:
- Financial constraints: – Is the research work that is carried out by a student, it wasn`t easy due to inherent problems of financial constraint. As a result of that, the research work could not cover some survey of small and medium enterprises in the state.
- Attention constraint: Not everybody was ready to pay attention about the questionnaires, therefore researcher findings wasn`t easy for the work.
- Time constraint: Time was not on the side of the researcher as the work has to be combined with job and academic activities.
1.8 DEFINITION OF TERMS
Entrepreneur: Is an individual who incubate new ideas and provides added value for the society. Base on the independent vision for growth, commitment to constructive change persistence to gather necessary resources and energy to achieve unusual result.
Profit: Is the total income or cash flow minus expenditure.
Debentures: Is a type of bond secured only by the general credit or promise to pay of the issues, now commonly issued by large, well established corporation with adequate credit ratings.
Economic Development: It implies a general and sustained improvement in the socio-economy and is measured by the increase in the per-capital income of an economic unit.
Organizational Structure: Can be defined as a way in which activities are divided and co-ordinate into relationship between managers, and employees, between managers and fellow managers as well as employees and fellow employees. It can also be defined as the arrangement of parts and inter-relationship among activities and people.
Development: Is the process of treating photo graphic film with chemicals to make a visible image, it can also be defined as the process of developing or being developed or is the process of starting to experiences or suffer from an ailment or feeling.
Small and Medium Scale Enterprises: Small scale industry is an industry with a labour size of 11-100 workers or a total cost of not more than N50 million but not more than N 200 million including working capital but excluding cost of land.
Managerial Techniques: They are not short-terms trucks used to motivate employees but rather effective methods of management that helps to develop a productive work place.
Sources of Fund: It can be cash rather than working capital provided from operations (net income plus non working capital expenses less non working capital revenue).