The Contribution Of Small Business In Changing A Depressed Economy

The Contribution Of Small Business In Changing A Depressed Economy
Abstract
This study was carried out on the contribution of small scale business in changing a depressed economy using small scale businesses in Uyo, Akwa Ibom State as case study. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprises of some selected small scale businesses in Uyo, Akwa-ibom state. In determining the sample size, the researcher conveniently selected 41 respondents while 38 were received and 35 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables. The result of the findings reveals that there is a relationship between small scale businesses and economic development. The current financing pattern and proportionate contribution of bank loans is not favourable for small scale businesses in Nigeria. The findings also revealed that small scale businesses encounter challenges in obtaining credit from banks. The study recommends that new economic policy should be introduced in the country to prevent massive importation of foreign goods particularly those that our local industries can produce domestically in order to protect the local producers against stiff completion with foreign firms. Seminar, Workshop and training should be organised from time to time for managers and operators of SMEs in the country in order to improve their technical and managerial skills for better performance from such enterprises.
Table of Content
- Title Page
- Certification
- Dedication
- Acknowledgement
- Table of Content
- List of Tables
- Abstract
Chapter One:
Introduction
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Questions
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of the Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisations of the Study
Chapter Two:
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Review
Chapter Three:
Research Methodology
- 3.1 Research Design
- 3.2 Population of the Study
- 3.3 Sample Size Determination
- 3.4 Sample Size Selection Technique and Procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Validity of the Study
- 3.9 Reliability of the Study
- 3.10 Ethical Consideration
Chapter Four:
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Analysis of Data
- 4.3 Answering Research Questions
- 4.4 Test of Hypotheses
Chapter Five:
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
- References
- APPENDIX
- QUESTIONNAIRE
Chapter One
Introduction
1.1 Background of the Study
Nigeria’s economy has been in a state of flux. It has gone through a lot of ups and downs throughout the years. Nigeria’s economy has worsened since the oil boom of the 1980s, and it has remained one of the world’s least developed countries. The slow speed of economic growth can be attributed to a variety of factors. Mono-cultural economies, limited industrialization, heavy import dependency, and corruption are only a few of the reasons. Various regimes have attempted to turn around the country’s economic fortunes in the past with various initiatives. There have also been certain bodies or agencies established to oversee and tackle the problem of poverty and promote economic progress. Bodies such as the National Poverty Alleviation Programme (NAPEP), the Family Economic Advancement Programme (FEAP), the Small and Medium Scale Enterprises Development Agency (SMEDAN), and others have been established to help with this. 2 Previous governments have been involved in a variety of development schemes aimed at improving the economy of the country. General Sanni Abacha’s regime unveiled a vision for the 2010 growth plan. It was a strategy devised to achieve a particular degree of economic development in Nigeria by the year 2010. In order to turn around the economy, President Olusegun Obasanjo’s government implemented a slew of reforms in areas including education, energy, solid minerals, public works, and transportation. He also founded the Due Process Office, which made significant improvements to the contract award and execution processes. The current government of Alhaji Yar’adua has developed its own program, dubbed the “seven-point agenda.” His government plans to focus on important sectors of the economy through the seven-point agenda in order to accelerate the country’s economic development. He also unveiled Vision 2020, a development strategy. He hopes to accelerate economic development with this approach, putting Nigeria among the top 20 economies by 2020. He has already begun to pursue this, with a particular focus on the power industry. 3 Despite these commendable programs and objectives, economic growth appears to be at a halt. In reality, the economy appears to be worsening further as a result of the global financial catastrophe, which has resulted in a global economic slump. The neglect of small scale businesses, or what some refer to as micro entrepreneurs, has been identified as a stumbling block to economic progress. In both advanced and emerging countries, it has been shown that most economies’ growth is based on the expansion of small scale businesses. Muhammad Yahya (2003).
Bangladesh, India, Indonesia, and other developing countries are doing well now because they have mastered the development of middle-level labor, which accounts for more than half of the productive sector. Despite the fact that the Nigerian government has tried in some way to acknowledge the sector and give it attention, there are still many obstacles preventing small scale businesses from achieving their goals. small scale businesses face a variety of obstacles, including a lack of infrastructure, poor technological advancement in terms of machinery, a lack of experts and technical abilities, and a lack of funds and the inability to obtain loans from banks.
1.2 Statement of Problem
The most serious problem that small scale businesses confront is a lack of enough capital and the inability to obtain bank loans. An economy can only thrive with the financial sector’s assistance in providing loans to other sectors. One of the goals of banking reforms or recapitalization was to enable banks to support the real economy by providing loans to businesses in these vital industries. If credit is made available to the official sector while the informal sector, which includes small scale businesses, is ignored, there will still be a gap in the economy’s growth. While large-scale businesses have easy access to bank credit, small scale businesses have a tough time obtaining it. The Federal Government, in collaboration with the Central Bank of Nigeria, implemented reforms in the lower end of the financial industry in order to address this issue. Liberalizing the licensing of micro-finance institutions and converting community banks to micro-finance banks are two of the reforms. Small unstructured enterprises, salary earners, craftsmen, food sellers, small farmers, and traders are likely to receive micro-credits from microfinance institutions. The Central Bank built skill acquisition centers in three geopolitical zones around the country in order to achieve this goal, as well as to reduce unemployment. The purpose of the centers is to empower adolescents through relevant skills training and, as a result, boost their access to funds (credits) for business start-up, Muhammad Yahya (2003)
Despite the recognition and support accorded, the small scale industries sector by various bodies to enable it play its traditional roles. It has become less obvious recently whether this sector performing as expected as small scale business play a very important role of the operators, populace and government such important as;
Employment generation, this could be easily identified in nations. As at present, 70% of labour force works under one small business establishment.
Step in rural – urban migration – formerly, young school leavers are found of running cities to seek for employment. Such geographical migrate has been drastically reduced with small business in rural areas. Consequently, this deepest urban areas population.
Aids mobilization of domestic souring. An individual or group of people can organize their fund than spending on trivialities to establish small business.
These are reasons why successive government has their weight behind the small-scale industrial programme.
The aim of the study is to closely exercise the contribution made by small-scale industrial sector with a view to determine. It’s overall performance in the entire depressed economy of his nation. The problem of the study therefore, is how the small-scale industrial sector can continue to perform its traditional role in changing a depressed economy and other associated problems encountered by the small-scale business.
1.3 Objective of the Study
The following are the objectives of this study;
- Examine if there is any relationship between small scale businesses and changing depressed economy.
- To determine if the current financing pattern and proportionate contribution of bank loans is favourable for small businesses in Nigeria.
- To determine whether small scale businesses encounter challenges in obtaining credit from banks.
1.4 Research Questions
The following research questions will be answered in this study:
- Is there any relationship between small scale businesses and changing depressed economy?
- Does the current financing pattern and proportionate contribution of bank loans favourable for small businesses in Nigeria?
- Does small scale businesses encounter challenges in obtaining credit from banks?
1.5 Research Hypothesis
The study will test the validity of the following hypothetical statement.
- H0: There is no relationship between small scale businesses and changing depressed economy.
- Ha: There is a relationship between small scale businesses and changing depressed economy.
1.6 Significance of Study
This study will assist small and medium-sized firms in identifying other sources of funding for their businesses other than their own personal funds. It will be extremely useful to the current government in identifying potential areas of support for financing small scale businesses. The study will also help the government evaluate the impact of microfinance banks on financing small scale businesses since their inception, as well as their overall economic impact. Finally, the study will be of great use to students and scholars interested in SME funding, and it will serve as a starting point for future research.
1.7 Scope of Study
This study is carried out on investigating small scale business and their relevance to economic development. The study however is delimited to examining if there is any relationship between small scale businesses and economic development, determining if the current financing pattern and proportionate contribution of bank loans is favourable for small scale businesses in Nigeria and the key obstacles that small businesses have to obtaining credit from banks. Hence, based on the nature of the study, selected small scale businesses in Uyo, Akwa-ibom state, will serve as enrolled participants for this study.
1.8 Limitation of Study
Finance, inadequate materials and time constraint were the challenges the researchers encountered during the course of the study.
1.9 Definition of Terms
Economic Development:
Economic development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.
Small and Medium Scale Enterprises:
Small and medium-sized enterprises (SMEs) are businesses whose personnel numbers fall below certain limits.
1.10 Organization of the Studies
The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.
Chapter Five
Summary, Conclusions and Recommendations:
5.1 Introduction
This chapter summarizes the findings on critical investigation of the contribution of small scale business in changing a depressed economy using Uyo, Akwa Ibom State. The chapter consists of summary of the study, conclusions, and recommendations.
5.2 Summary of the Study
In this study, our focus was on a critical investigation of the contribution of small scale business in changing a depressed economy using Uyo, Akwa Ibom State. The study was specifically carried out to examine if there is any relationship between small scale businesses and economic development, determine if the current financing pattern and proportionate contribution of bank loans is favourable for small scale businesses in Nigeria, and determine whether small scale businesses encounter challenges in obtaining credit from banks.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 35 responses were validated from the enrolled participants where all respondent were the some selected SMEs, in Uyo, Akwa-ibom state.
5.3 Conclusions
Based on the findings of this study, the researcher concluded that;
- There is a relationship between small scale businesses and economic development.
- The current financing pattern and proportionate contribution of bank loans is not favourable for small scale businesses in Nigeria.
- Small scale businesses encounter challenges in obtaining credit from banks
5.4 Recommendations
Based on the findings of the study, the following recommendations are proffered:
- New economic policy should be introduced in the country to prevent massive importation of foreign goods particularly those that our local industries can produce domestically in order to protect the local producers against stiff completion with foreign firms.
- Financial institutions especially banks should be encouraged to increase their loans and advances to SMEs in the country to address the financial challenges confronting the operations and survival of many enterprises in the country.
- Effort should be made to ensure that adequate infrastructural facilities are in place for proper operations of small and medium scale enterprises in the Nigerian economy. Availability of adequate electricity and efficient transport system is very essential for survival, growth and development in any given economy.
- Seminar, Workshop and training should be organised from time to time for managers and operators of SMEs in the country in order to improve their technical and managerial skills for better performance from such enterprises.


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