CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The impact of Small Scale Enterprises to the development cannot be neglected in every economy, more especially developing nations where sustainable economic development is highly desirable small business enterprises have such a crucial impact to play in the development of an economy in such a way that they cannot be ignore (Lawal, 1993).
According to Osuagwu (2001) small business enterprises involves the use of human and non-human resources towards the achievement of set goals and objectives. Small business enterprises should form one of the development objectives they can serve as a source of impact for multinational, thereby replacing existing foreign resources, they are also training ground for local skill ensuring a more equitable distribution of income and reducing the migrating of manpower from the rural to the urban areas.
Small scale enterprises are crucial for economic growth, poverty alleviation and wealth creation. In an economy like Nigeria, small business enterprises has always been faced with credibility problems, planners experience frustrations when they make their forecast (Owualah, 1999).
(Essang , 1994) Economic history is well stocked with enough it sights into the humble beginnings of present great corporation, evidence abound that almost all of the multinational giant corporation in America Europe and even Nigeria were cottage enterprises, growing as their industry grew and through their own sheer ability, marketing skills, and effort to reproduce and produce existing products better cheaply. Japan's economy was dominated by traditional industries, cottage firms and by many SMEs, who drew their strength, not only from the abundance of capital, but from the role of marketing in guaranteeing the growth of small scale enterprise.
Small scale enterprises contributed greatly to Nigerians development by the provision of employment, marketing of goods and services and the growth and development of the rural areas. It has also brought about the growth of indigenous entrepreneurship in Nigeria.
This Research Work Tends Examine the Contributions of Small Business Enterprises to the Growth and Development of Nigeria’s Economy
1.2 STATEMENT OF PROBLEM
Small business (small scale) enterprises are faced with some problems such as low productivity among the small business enterprises. As a result of poor financial base and smallness of their market share, the productivity is very low. Therefore it is hard for them to compete effectively.
Another problem being faced by small business (small scale) enterprises isundercapitalization. Most of the small business enterprises are financed by the owners capital, which is never sufficient for the business.
This then leads to death of tangible assets which is usually caused by the fact that they don't posses enough tangible assets which could serve as collateral to secure loans from credit institutions.
1.3 OBJECTIVES OF THE STUDY
The main purpose of this research project is basically to evaluate the contributions and performance of small business enterprises in the Nigerian economy by giving primary consideration to the various socioeconomics in the country. It also to identify the problems of small business enterprises and offer suggestions on how to improve their performance to improve Nigeria's economy.
Other objectives are:
i. To identify the problems of small business (small scale) enterprises and efforts made towards eliminating those problems.
ii. To examine the performance of small business (small scale) enterprises, their characteristics and mode of operations.
1.4 RESEARCH QUESTIONS
This research tends to provide answer to the following questions.
1. Are small business enterprises contributing towards improving Nigeria's economy?
2. To what extent is the availability of credit facilities contributing to the survival of small business enterprises?
3. What are the roles of small business enterprise in economic development?
4. What is the impact of government policies on the performance of small business enterprises?
1.5 RESEARCH HYPOTHESES
Ho: Small business enterprises do not contribute towards improving Nigeria's economy
H1: Small business enterprises contribute towards improving Nigeria's economy.
Ho: The availability of credit facilities do not contribute to the survival of small business enterprises.
H1: The availability of credit facilities contributes to the survival of small business enterprises.
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