Small Scale Business Enterprises and Its Impacts on Economic Development: a Study Selected Small Scale Business in Afikpo



This chapter intends to discuss the topic “Small Scale Business Enterprises and it s Impact on Economic Development” under the following sub-headings. Statement of problem, objectives of the study research questions, significance of the study, scope of the study, limitations of the study Definition of terms and References.


          Nigeria economy far back before the advent oil exploration in the early 70’s was an agrarian economy. Nigeria was not considered a rich country at the time, but the nation was able to fed itself adequately and the economy was very buoyant. At this time, 85%  of the country’s export earning was from agricultural product. During this period also, Nigeria has been making concerted effort toward the economic development of the sovereign  nation. Most enterprises propelling the activities of the nation were mainly operated mostly by foreigners some other industrial plants in the economy then, were owned by Europeans and also master minded by their exports.

          The oil boom era shifted the nation’s emphasis from agriculture to mainly cruse oil. Nigeria had a lot of money, but that was starting point of the problem of the economy. The economy could not move forward due to mismanagement by the country’s leadership that led to conspicuous extravagant spending the nation started suffering from economic depression such as inflation mass unemployment, high foreign debts, money devolutions and so many others.

          In response to these weaknesses of large scale enterprises, coupled with the total economic depression government then sought to promote small scale business enterprises as a strategy for achieving self reliance and the only way to match on  an industrialized economy. Government has championed the campaign for individuals, mostly especially the unemployed one’s to be creative and be self employed.

          Coupled with this quite a lot of funds programmes and employment scheme have been launched both at state and federal level. Some of these programmes are the national economic empowerment development strategy (NEEDS), small scale industry credit scheme (SSICS), National directorate of employment (NDC) which have been providing loan facilities for small scale industrial owners.

          To further show the importance of this sector and the potentials if has in promoting an industrialized and self-reliance economy. Government  national development plan of (2000-2010) explicitly stated the main objectivities as the creation of employment opportunities mobilization of level resource.



          For Nigeria to excel industrially there is the need to promote and develop this sector because it serves as a  bedrock of the countries industrial development.

          Unfortunately the sector could not grow fast due to some problems facing the sector both internally and externally.

This is because of the following:

  1. Poor infrastructures
  2. Poor access to finance
  3.  Improper feasibility studies
  4. Lack of entrepreneurial skills that have not helped small scale business owners to realize their objectives.


          Specifically, the main objectives of this study is to carryout research into what economic benefits Nigeria could derive from effective promotion of small scale business enterprises consequence, the objectives of this study are:

  1. To examine how poor infrastructures affect small scale business in Nigeria
  2. To examine the existing scheme for the promotion and provision of funds of small scale business enterprises in Nigeria
  3. To identify the problem militating against the effectiveness of the scheme
  4. To know how to do with the establishment and operation of the small scale business enterprises


     It is the aim of this study to know the following

  1. What are the entrepreneurial problems that hinders the  promotion of entrepreneurial development?
  2. How does poor infrastructures affect the development of small scale enterprises?
  3. In  what ways does poor access to finance limit the growth of small scale business.
  4. How can improper feasibility studies hamper the development of small scale business.


The study shall help the policy makers to recognize the importance of small scale business and industries in the provision of employment and self-reliance economy. This shall further guide them to make trade policies to enhance the performance SSBS as regards their activities to accommodate the mushrooming population that is attributed to high birth and fertility rates as well as rural urban migration with the country.

The students and other scholars who intend to widen their knowledge in the study of small scale business enterprises, this study small scale business enterprises, this study shall be a basis of reference since it focuses on the causes to establishments, how the unique characteristics of the businesses have facilitated their role in the provision of employment, challenges they face and the solution that are being undertaken to harness their activities.


          The study was confined to small scale business since they engage the labour force in various activities that require  little capital to sustain the possibility of retail, whole-scale shops, hardware and general merchandise, restaurants to mention but a few as a way to reduce unemployment level.




          Due to the present economic predicament in the nation, the researcher was constrained in the course of this research by the following factors.

1.       Finance

          Finance is not one of the major factor that contributed to the limitation of the sample size used, the researcher took the sample size that will help to facilitate data collection for the research work. As a result of the poor financial position of the research, he was constrained to using one business centre as a case study.

2.       Response

          The attitude of most retailers may have affected the quality of the work. Most of the retailers failed to complete the questionnaire distributed for the feet that they may be implicated or reveal business secrets.

3.       Time

          Time is another factor that affected the quality of the work the research was force by shortage of time resulting from the demands of classroom work, examination and the short academic year.


          In other to be explicit in this study, clarification is made of some terms and terminology used which may convey different meaning in every day used. therefore, the following words are defined as they are conceptualized in this study.

  1. Small: This is a size that is less than or usual.
  2. Scale: Is a range of levels or numbers used for measuring something. 
  3. Business: Is an organisation or economic system where goods and services are exchange for one another or for money.
  4. Enterprises: This is  the development of business by the people of a country rather than by the government.
  5. Impact; Is the demonstrable contribution that excellent research makes to society and the economy.
  6. Economic Development; Is the sustained concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area.
  7. Small scale business enterprises, sometimes called a small business, is a business that employs a small number of workers and does not have a high volume of sale.

However, international organisations such as the world bank and the international finance corporations  (2002) define small scale business enterprises as those that require small amount of capital to establish, small number of employees or in most cases personally handled by the owner, and referred to as micro businesses hence to them they are micro business” or “Bop business.

          In conclusion, small scale business enterprises are characterized by the unique feature of labour intensiveness.

h.      National economic empowerment development strategy (NEEDS)

This is a government policy aimed at strengthening country’s economy. It is a home  grown policy of the present administration which seeks to empower the small scale industrialist and the people to be self reliance and be self employed.

 j.       National Directorate of Employment (NDE)

          it was set up by the federal government in November 1986 to work out strategies for dealing with the menace of mass unemployment in the country especially school leavers and college graduates, it’s initial core programmes were formally launched on 30th January 1987.




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