FINANCING SMALL SCALE INDUSTRIES IN NIGERIA (A CASE STUDY OF SELECTED SMALL BUSINESSES IN LAGOS SUB-URBAN)
ABSTRACT
Small and medium-sized enterprises (SMEs) play an important dynamic role in developing countries. These firms have been highlighted as a means of achieving these countries’ quick industrialization and development goals. The purpose of this study is to investigate the impact of SMEs in developing nations.
This work protected the small and medium-sized businesses from failure. Primary and secondary data sources were employed to collect the information. According to the findings, SMEs are the backbone and strength of any economy.
That SMEs can employ more people than any other sector. The study’s conclusion is that small and medium-sized firms have been identified as the pivot of any country’s industrialization, and they facilitate long-term growth and development.
CHAPTER ONE
1.0 STUDY BACKGROUND
According to Adekunle (2005), the importance of SME to the economic development of any country, developing or developed, cannot be overstated.
Small Scale Enterprises are regarded as one of the economic development’s driving engines. They encourage private ownership and entrepreneurial competence, they are practicable and can quickly adapt to changing market, demand, and supply situations, they produce employment, assist diversify economic activities, and they make major contributions to expert and commerce.
According to R.K. Moruku’s (2002) guidelines for accessing credit facilities for Small Scale Enterprises in Nigeria, “there is potential in Small Scale Enterprises to create employment, reduce underemployment and poverty, utilize local raw materials output expansion and transformation of indigenous technology.”
Others want to eliminate intermediate goods, promote equitable development, and reduce income disparities. As a result, they are a strategic choice in industrialization and economic development, and they have even acted as a new development aid model.
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Given the growing unemployment and poverty in Nigeria, particularly the working poor, as well as the humiliation and threat to human survival, no effort should be spared in developing, supporting, and sustaining Small Scale Enterprises in Nigeria.
1.1 THE PROBLEM’S STATEMENT
Currently, the economy need diversification and expansion.
Despite the fact that government goals of fostering economic growth, reducing unemployment, and creating a well-trained labor force have been pursued since the civil war reconstruction period and the oil boom era. However, the nation is still losing ground in the areas of unemployment,
inflation, economic stagnation, and an over/under supply of skilled labor force. If Nigeria is to solve its social and economic problems efficiently, it must take a critical look at the development of small-scale businesses because this development sector can be synonymous with national economic growth.
The emphasis on the small company sector was not supported until recently, and this shift was brought about by some setbacks in other sectors of the economy. It has been determined that the public sector alone has been ineffective in stimulating economic growth.
This realization prompted Desore to critically investigate the impact of Small–Scale Enterprise financing on increasing the socioeconomic well-being of the Nigerian people.
1.2 STUDY PURPOSE
The goal of this study is to look into the impact of Small Scale Enterprise financing on the socioeconomic well-being of the Delta State.
The following is a clear statement of the study’s goal:
i. To demonstrate the importance of Small Scale Enterprise financing.
ii. To demonstrate the difficulties in financing small-scale businesses.
iii. To the funding chances for small businesses.
iv. Determine the feature as well as the source of finance for small-scale businesses.
13 v. To demonstrate the actions of these businesses in terms of revenue generating.
vi. Based on the study’s findings, provide constructive recommendations to policymakers.
1.3 THE STUDY’S SIGNIFICANCE
This research is critical for all businesses because it would allow Small-Scale Enterprise operators to understand their impact on the socioeconomic well-being of the Nigerian people.
ii. This study will also guide the operation of most large and small-scale enterprises (publicly and privately owned), and because most public firms are currently being privatized, this paper will be of immediate assistance in dealing with small-scale enterprises.
1.4 THE HYPOTHESIS
The following are the hypotheses that will be tested in this study:
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i. That government contributes to Nigerians’ socioeconomic well-being.
ii. Educational level influences business interest diversification.
iii. That establishment obtains credit from financial institutions.
iii. That accounting officers should be hired and retained by small businesses.
1.5 THE STUDY’S OBJECTIVE
This study will look at the amount of small-scale businesses owned and operated by single Nigerians between 2000 and 2004.
The Delta State Ministry of Commerce and Industry, Asaba, published a directory of small-scale enterprises in Delta State in 2000, outlining some of the state’s businesses.
Thus, this research is limited to selected small – scale enterprises in Delta State’s Aniocha North Local Government Area, such as Pazuka Enterprises Nigeria, which is involved in soap making, Pakan Universal Agencies Nigeria, which is involved in poultry rearing, Vicmili 15 organization, which is involved in bakery,
Lucky group of designers, which is involved in garri processing, Iweka wood workers, who are involved in furniture making, and so on.
This study will also look at the influence of small-scale firm funding on the socioeconomic well-being of Nigerians.
This inquiry will also investigate how banks assist in financing small – scale enterprise activities in terms of revenue production, employment, and income accruing to the owners.
1.6 THE STUDY’S LIMITATIONS
There were certain limitations that the researcher experienced when doing his research. They are as follows: i. Financial restrictions limited the scope of this study on the ministry of trade and industry, Asaba, and banks.
ii. Another issue is time limits; a research of this sort,
which is predicted to reduce for research results, would almost definitely have required a significant amount of time to allow for an in-depth look at personal observation. However, because the work had to be submitted within a certain time frame, I had to combine lectures, semester course work, and examinations with research.
iii. Another constraint is a lack of response from small-scale enterprise firm owners and large earners (workers). This is due to small-scale industry owners’ unwillingness to share vital information about their business for fear of tax collectors.
Despite the restrictions described above, researchers made significant efforts to acquire complete information from a small number of Small – Scale firms required for the study. As a result, the scope and limits of the study should be considered.
1.7 OPERATIONAL TERM DEFINITION
Have a powerful impression or effect on something.
The impression may be favorable or negative, and the effect may be positive or negative.
Small ‐ scale businesses: According to 17 E. E. Ohibundu (2002) on Industrial trends and prospects on page 34, small-scale firms are those with a total cost inclusive of land of more than one million (N1, 000 000.00) and a labor force of 14 to 35 workers.
Financing is the efficient and effective allocation of resources with the goal of maximizing shareholder wealth.
Improving: Reaching a higher level.
Control and control of a group, society, or home.
Economic/Psychological: To have a sense of well-being or to be in a state of health and happiness.
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FINANCING SMALL SCALE INDUSTRIES IN NIGERIA (A CASE STUDY OF SELECTED SMALL BUSINESSES IN LAGOS SUB-URBAN)
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