Role Of Small Scale Business In The Economic Development. (A Case Study Of West-End Micro Finance Bank)
This paper seeks to investigate Small and Medium Enterprises as a veritable tool in Economic Growth and Development. Data was collected with a structured questionnaire and analyzed with several descriptive statistics to identify the perception of the roles of SMEs in Nigeria. The results of the study therefore reveals that the most common constraints hindering small and medium scale business growth in Nigeria are lack of financial support, poor management, corruption, lack of training and experience, poor infrastructure, insufficient profits, and low demand for product and services. Hence, it therefore recommends that Government should as matter of urgency assist prospective entrepreneurs to have access to finance and necessary information relating to business opportunities, modern technology, raw materials, market, plant and machinery which would enable them to reduce their operating cost and be more efficient to meet the market competitions. That job creation is a most challenges facing the world today. Job creation is a function of mental ability of individual entrepreneur to know how to manage their opportunity. Any country where there is no entrepreneur, the citizens suffer poverty and wants this is because nobody wants to use his or her own brain to think of doing something new to affect the community and the world at large. In any giving economy, entrepreneurship development always give birth to job creation which will force people to do something that will better their lives and the country at large. The paper addresses the following objectives: to examine impact of entrepreneurship on job creation in Nigeria, to establish the facts that job creation in Nigeria can be as a result of entrepreneurship development, to evaluate the relationship between job creation and entrepreneurship development in Nigeria and to define how entrepreneurship development can influence job creation in Nigeria.
TABLE OF CONTENT
1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF THE PROBLEM
1.3 OBJECTIVE OF THE STUDY
1.4 RESEARCH QUESTIONS
1.5 SIGNIFICANCE OF THE STUDY
1.6 HYPOTHESIS OF THE STUDY
1.7 SCOPE AND LIMITATION OF THE STUDY
1.8 HISTORICAL BACKGROUND
1.9 DEFINITION OF TERMS USED
2.1 SMALL SCALE BUSINESS
2.2 AVENUE FOR DEVELOPING ENTERPRENUER SKILLS
2.3 PROCESS AND OBJECTIVES OF ENTREPRENEURSHIP
2.4 DEFINITION OF ENTREPRENEURSHIP
2.5 PROBLEMS OF ENTREPRENEURSHIP
2.6 TYPES OF ENTREPRENEURSHIP
2.7 YOUTH UNEMPLOYMENT
2.8 CAUSES OF YOUTH UNEMPLOYMENT
2.9 ATTEMPT AT CURBING YOUTH UNEMPLOYMENT
2.10 CONCEPT OF YOUTH EMPLOYMENT
2.11 EFFECT OF YOUTH UNEMPLOYMENT
2.12 PROBLEMS OF YOUTH UNEMPLOYMENT
2.14 PROGRAMME OF ENTREPRENEURSHIP IN NIGERIA
2.15 ROLES OF CAREER GUIDANCE IN REDUCING YOUTH EMPLOYMENT
3.0 RESEARCH METHODOLOGY
3.1 TYPES AND METHODS OF DATA COLLECTION
3.2 THE STUDY POPULATION
3.3 RESEARCH DESIGN
3.4 DETERMINATION OF SAMPLE SIZE
3.5 METHOD OF PROCESSING DATA
3.6 RESEARCH INSTRUMENT SPECIFICATION
4.0 DATA ANALYSIS AND PRESENTATION OF RESULT
4.2 ANALYSIS OF RESPONSE
4.3 PRESENTATION OF DATA
4.4 HYPOTHESIS TESTING
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION
1.1 BACKGROUND OF THE STUDY
The role of Small and Medium-Scale Enterprise (SMEs) in the national economy cannot be underestimated. These enterprises are being given increasing policy attention in recent years, particularly in third world countries partly because of growing disappointment with results of development strategies focusing on large scale capital intensive and high import dependent industrial plants. The impact of SMEs is felt in the following ways: Greater utilization of local raw materials, employment generation, encouragement of rural development, development of entrepreneurship, mobilization of local savings, linkages with bigger industries, provision of regional balance by spreading investments more evenly, provision of avenue for self-employment and provision of opportunity for training managers and semi-skilled workers. The vast majority of developed and developing countries rely on dynamism, resourcefulness and risk tasking of small and medium enterprises to trigger and sustain process of economic growth. In overall economic development, a critically important role is played by the small and medium enterprises. Small and medium enterprises advocates, firstly, it endurance competition and entrepreneurship and hence have external benefits on economy wide efficient, and productivity growth. At this level, perspectives are directed towards government support and involvement in exploiting countries social benefits from greater completion and entrepreneurship. Secondly, proponents of SME support frequent claim that SMEs are generally more productive than large firms but financial market and other institutional improvements, direct government financial support to SMEs can boost economic growth and development. Some argued that SMEs expansion boosts employment more than large firm growth because SMEs are more labour intensive thereby subsidizing SMEs may represent a poverty alleviation tools, by promoting SMEs and individual countries and the international community at large can make progress towards the main goal of halving poverty level by year 2020 i.e to reduce poverty by half and becoming among 20 largest World Economies (Nigeria Vision 20:2020). Entrepreneurial development is therefore important in the Nigeria economy which is characterized by the following heavy dependence on oil, low agricultural production, and high unemployment, low utilization of industrial capacity, high inflation rate, and lack of industrial infrastructural base. These constraints limit the rate of growth of entrepreneurial activities in Nigeria. Hence, this paper seeks to investigate Small and Medium Enterprises as a veritable tool in Economic Growth and Development.
1.2 STATEMENT OF PROBLEM
The Nigerian economy since the attainment of political independence in 1960 has undergone fundamental structural changes resulting to structural shifts which have however not resulted in any significant sustainable economic growth and development to ensure adequate employment opportunity for her youths. Recently, available data show that the Nigerian economy grew relatively in the greater parts of the 1970s, with respect to the oil boom of the 1970s whose extreme profits resulted to wasteful expenditures in the public sector leading to dislocation of the employment factors and also distorted the revenue bases for policy planning. This among many other crises resulted in the introduction of the structural adjustment programme (SAP) in 1986 and the recent economic reforms. The core objective of the economic structural reform is a total restructuring of the Nigerian economy in the face of population explosion (Douglason et al, 2006).
This paper seeks to explore the relationship between small as a platform toward reducing youth unemployment and the promotion of socio-economic growth and development in Nigeria. Specifically, it assesses past government efforts aimed at reducing unemployment, as well as examine the major factors/constraints that hinder entrepreneurship. It concludes by proposing some strategies that can promote effective entrepreneurship culture.
1.3 OBJECTIVES OF THE STUDY
The objective of this study can be stated as follows:
- To evaluate the contribution of Nigeria Labour Congress to youth.
- To identify the problems associated with unemployment in Nigeria.
1.4 RESEARCH QUESTIONS
The questions for this research are
- Can small scale reduce unemployment in our society?
- Can government eradicate unemployment in our society?
1.5 STATEMENT OF HYPOTHESES
Ho: Small scale cannot reduce unemployment in our society.
Hi: Small scale can reduce unemployment in our society.
Ho: Government cannot eradicate unemployment in our society.
Hi: Government can eradicate unemployment in our society.
1.6 SIGNIFICANCE OF THE STUDY
The significance of this research work is to evaluate and analysis the role of small scale business in the economic development of ogun state. It is hoped that it would contribute to the promotion of the existing frontier or boundary between human knowledge.
1.7 SCOPE OF THE STUDY
The scope of this study will be limited to the role, which the entrepreneurs play in manpower development in Nigeria. The research work will be so limited because of the limited availability of data and time.
1.8 THE HISTORY OF THE CASE STUDY
West-End Micro Finance Bank Limited, Igbesa formally known as Igbesa community Bank was established in year 2000 and was registered by Central Bank of Nigeria (CBN) on 1st of February, 2008.
The bank was situated at No 11, Community Road, Igbesa, Ado-Odo ota Local Government in Ogun State, Nigeria.
Since the importance of microfinance in the field of development was reinforced with the launch of the Microcredit Summit. The Summit aims to reach 175 million of the world’s poorest families, especially the women of those families, with credit for the self-employed and other financial and business services, by the end of 20154 (Microcredit Summit, 2005). More recently, the UN, as previously stated, declared 2005 as the International Year of Microcredit.
Robinson states that the 1980s represented a turning point in the history of microfinance in that MFIs such as Grameen Bank and BRI2 began to show that they could provide small loans and savings services profitably on a large scale.
West-End Micro Finance Bank Limited, Igbesa, have been a source of help to all Famer and business people in the community by giving out loan.
In view of this community have been engaged in business because they know that there is a source for them to borrow money and payback installment.
Microcredit and microfinance are relatively new terms in the field of development, first coming to prominence in the 1970s, according to Robinson (2001) and Otero (1999). Prior to then, from the1950s through to the 1970s, the provision of financial services by donors or governments was mainly in the form of subsidized rural credit programmes. These often resulted in high loan defaults, high lose and an inability to reach poor rural households (Robinson, 2001).
1.9 DEFINATIONS OF TERM USED
- MICRO ENTERPRISE: Micro enterprise is the informally organized business activity undertaken by entrepreneurs.
- SMALL ENTERPRISES: Small enterprises is any enterprise that employs between ten (10) to forty – nine (49) people and has asset worth (excluding land and building) between N 5million and N 50 million
- MEDIUM ENTERPRISE: Medium enterprise is any enterprise that employs between fifty (50) and one hundred and ninety – nine (199) people and has assets worth (excluding land and building) between N 50 million and 500 million
- MICROFINANCE INSTITUTION: Microfinance institution are organization whose activities consist wholly or in significant part of the provision of financial services to micro entrepreneurs.
- MICRO CREDIT: Micro credit is commonly defined in terms of loan amount as a percentage of average per capital income in the context o Nigeria.
- MICRO SAVING: Micro saving are defined as saving account with a balance of less than N 8, 400 (about & 50), that is less than 20% of the average annual income per capital
SMALL-SCALE: A small firm is defined in terms of various combinations of factors like number of persons employed, value of assets, turnover and or output etc
ENTREPRENEUR: According to Olutunla (2001) the word entrepreneurship is derived from the French word ‘’entreprende’’ meaning to ‘’undertake’’. To this end, an entrepreneur is someone that creates a business.
ENTREPRENEURSHIP: The word entrepreneurship is derived from the French word ‘’entreprende’’ meaning to ‘’undertake’’. To this end, entrepreneurship is commonly defined as the process of creating a business.
INDUSTRY: Collection of undertaking’s generally not under one control but connected with same economic activity or similar ones.
FIRM: Refers to individual factors, shops mine etc or a number of them grouped together
DEVELOPMENT: – The action or processes where new industries are encouraged in order to create jobs for the unemployed. The process of being developing or developed.
PROFIT: – Additional money gained in business that is the different between the amount spent and the amount earned.
BUSINESS: – According to R.F Abban (1989:2) designed business as on institution or organization established to supply. The aim of the organization may be either to make profit or to provide certain services to the people. Also, business is exchange of goods, money or services for mutual benefits.
RISK: According to Aguolu (1974:8), this is the probability or possibility that the expected outcome varies from real income.
INVESTOR: Accordingly to Aliukama promotion and achievement, which has to do with effects being put for the success of certain project and the positive outcome of certain instance.
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