The Contribution Of Small Scale Business In Changing A Depressed Economy

Project and Seminar Material for Business Administration and Management BAM

Project and Seminar Material for Business Administration and Management BAM


The work is an academic exercise which attempt to study “the contribution of small scale Business in changing a depressed economy”, with reference to Nigeria economy. The problems that stem government effort in promoting the development of small-scale sector, problem encountered by small-scale operations and it likely prospects. The researcher by undertaking this survey, she will be able to unearth the contribution of small scale business toward changing a depressed economy. Research question were formulated from which the major finding were obtained and decision were made. Therefore, one of the findings is the employment generation which small scale business sectors contribute to any nation’s economy, if it is well managed. The information gathered through interview questionnaires and hysterical investigation were grouped into five chapters for easy analysis and logical presentation.

  • Chapter one forms the research proposal, which confirms the introduction of the subject matter, background of the study, statement of the problem, objective of the study, significance of the study scope and limitation, research question and definition of terms.
  • Chapter two is the literature review, introduction contribution of small scale business in changing a depressed economy, factors militating against it and government agency (SMEDA) while
  • Chapter three forms research method and procedure, questionnaire, data presentation and analysis, personal interview.
  • Chapter four with data presentation analysis and research findings hypothesis while
  • Finally chapter five give summaries, conclusion and recommendation for small scale business in changing a depressed economy of Nigeria.

Chapter One


1.1 Background Of The Study

Experience has show that industrial development in any country, provides the brightest hope for generating sustenance growth employment, saving and investment and indeed economic development. Nigeria, like any other developing country with relatively low per-capital income, looks unto industrialization and structural transformation, which are imperative in the quest for the development. One of the most critical development issues in Nigeria revolves around the need to design and implement policies and strategies for an effective, competitive and diversified industrial system. This is particularly important when one considers the country’s endowment.

Giant business establishment make headlines in our news media, people therefore think less of small scale business, but a clear examination will show that small scale business venture are also extremely important in our societal development. Most of today business giant started from humble beginning, from dreams and dedication of perhaps one person while backbone of our economic system hang on those business e.g. (Oil and steel companies etc). but the small scale industries constitutes the muscle that enable such business giant above is obvious however; that the small-scale business cannot compete directly with big business. Experiences shows that the small businessman is mostly successful when he fulfills a need that cannot be or is not currently being supplied by these big business competitors. “This act to provide something better and different, gives Nigeria’s small business vitality”.

The federal government of Nigeria in realization of the important of small scale industries to the development of the economy. In her first National development plan (1962 – 1968) she introduces import substitution industries. In her second National Development plan in early 80s the main strategies of the industrial policy were foreign exchange policies and trade regulations investment incentives and special incentives to provide credit and technical assistance to small scale industries.

Under the structural adjustment programmes (SAP) framework, having recognized futile expenditure with increases revenue from petroleum, a new industrial policy was launched in 1989, which re-emphasizes direct government realization process for the first time, the national identified small and medium scale enterprises or the main focus and strategy for the attainment of the goal of economic self-reliance.

Government encourages small-scale business through the following measures:

A 270 million dollar World Bank Loan for small-scale enterprise development.

Setting up of Nation Economic Reconstruction Fund (NERFUND), Nigeria industrial Development Bank (NIDB) mandated to cover small-scale enterprise to complement the Nigeria Bank for commerce and industries (NBCI) activities in the sub-sector.

  • Central Bank guidelines to commercial Banks to allocate 20% of loan able funds to small-scale enterprises.
  • Setting up of National Directorate of Employment (NDE)
  • Creation of Micro-Finance Bank to aid cottage industries and small scale enterprises
  • Setting up industrial training fund and entrepreneurship development programme.

Due to the global economic depression and economic recession, unemployment has become a serious phenomenon in Nigeria today. To this end, one should not fold his hands and die in silence but must leave for other ways of self employment.

The soap making industry provides on individual with a worthy employment, as it is not only to meet the needs of the employer but also those of the market at large. There is an indispensable need for keeping body, clothes and surrounding making use of soap for one purpose or another and this is what motivate a group of fairly successful businessmen and women of Dadin Kowa in Jos to give birth the idea of owing and running a small venture that will fulfill the vacuum of satisfying and creating consumers for the product. In this light, thus, twelve fairly successful businessmen and women contributed enough as Dadin Kowa enterprises Jos, with the aim of producing varieties of soaps.

1.2 Statement Of Problem

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

It has been established that the small-scale business employ the highest member of the work-force found in any nation, be it a developing nation. It is in the light of the above, that the study is focused on;

  1. Investigating and trading out in changing of Nigeria’s depressed economy.
  2. To determine the contribution of government towards developing small scale business in the Nigeria’s economy.
  3. To establish to what scale, small scale industries are producing due to the low capital investment by entrepreneurs.
  4. To find out the problems faced by the sector and suggest solution that will enhance their roles.

1.4 Significance Of The Study

This research is significant to potential or prospective and existing small-scale industries, to the authorizes monitoring of small-scale industries in changing the depressed economy. The need for the study areas to examine the performance and contribution of small scale business in the countries economy.

1.5 Scope And Limitation

The theme of this study in the contribution of small scale business in changing a depressed economy in Nigeria; a case study of soap industry in Jos. The small scale business which are within the industry and are potential beneficiary loan schemes, the researcher had conducted a comprehensive study on the contribution of small-scale industries in changing a depressed economy.

Thus, the research will only be centered on Dadin Kowa enterprise in Jos. In the course of this research work, the researcher encounters some problems that are common of this type of write-ups. These problems include trying to gather data from uncooperative hands of department in related areas. The major problem was that of collecting adequate data necessary for research work such as detailed information, which bring at vital point of conviction of study of such information, which was not willingly given, as they are termed confidential. The knowledge of the fact that the information would be needed purely and solely for academic purpose did not help at all. The gathering and compilation of the project had to be done concurrently with lecture, test, and thus, the problem of time was a limit factor.

1.6 Research Questions

The major objective of this study is the acceptance important of small scale business to the nation.

Therefore, with the study to acknowledge the fact of the contribution of small scale business in our depressed economy, will this create awareness for the world investors or those already on the sub-sector institution of higher – learning, government agencies and the populace, to see beyond present situation of the economy and its relation to small-scale business? How does these enumerated problems of small venture affect Dadin – Kowa enterprises in Jos and how are they better treated? To remain in business.

1.7 Definition Of Terms

Small Scale Business:

These are small business organization with the aim of producing or distributing certain goods and service, to the public in order to make profit, examples are industries producing soap, matches, and polythene bag etc. not more that fifty people.


This refers to an individual who starts and run a business and also who is optimistic in taking profitable risk and innovating to satisfy needs of the consumer at a profit.


It refers to the business organization itself, it could be private enterprise owned by a person or group of persons or public enterprises owned by the government

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