The Factors That Have Impacted Growth And Development In Small And Medium Scale Enterprises In Nigeria

Project and Seminar Material for Business Administration and Management BAM

Project and Seminar Material for Business Administration and Management BAM


Policy objectives of Nigerian government aimed at promoting and eloping small and medium scale enterprises since 1970’s.

Government played significant roles in providing management support service, credit facilities to small scale enterprises, but these are inadequate because each one of the aforementioned has their own stipulated policies guiding them in rendering these services.

The problems under the sub-topic can be viewed:

  1. Little access to low information and technology.
  2. Insufficient business connections.
  3. Inability to draw business plans.

The importance of the factors that have impacted growth and development in small scale enterprises and the topic has an organizational medium enterprises to function effectively and efficiently, it will require competent entrepreneurs.

Small scale firms are mostly financed by personal savings. Loans from Banks carries the highest sources of fund, despite the fact that Banks are not willing to give loans to small scale businesses due to the fear of risk and uncertainty. Petrin, (1991)

Moreso, entrepreneurs must always be aware of economic situation in the country.

Chapter One


1.0 General Background Of The Study

Small and medium enterprises play a significant role in world economy. Historically, small business entrepreneurship has its origin in the Eastern Mediterranean Siropolis, (1977). According to Tuteja (2001), business enterprises all over the world are divergent array of business concerns involved in economic activities spanning micro and rural enterprises and contemporary industrial organizations that use sophisticated technologies.

The breakthrough in Nigeria entrepreneurship and small business development came about through the Nigerian indigenization Decree and later the Nigerian Enterprises promotion Decree. There were attempts by Federal Government decision makers to make sure that Nigerians play a worthwhile and active role in the development of the country’s economy.

Generally, the success of any nation’s self-reliant economic strategy and policy (including small and medium scale business and entrepreneurship policies and programs) is mainly a function of its people’s positive attitude towards entrepreneurship, in addition to the extent to which the right incentives and infrastructure are adequate enough to make risk worth – taking in business entrepreneurship. The federal and state government in Nigeria have both contributed to the growth and development of entrepreneurship, and small and medium – scale industries in Nigeria, especially in the rural areas of the country.

1.1 Purpose Of The Study

The main purpose of this study, was to find out the factors that have impacted growth and development in small-scale enterprises in Nigeria.

1.2 Statement Of Problems

Problems in small and medium scale enterprises can be seen as those things which hinder the smooth running of the organization. They include:

  1. Lack of infrastructural facilities.
  2. Lack of adequate capital
  3. Poor management
  4. Lack of resources i.e Raw materials, money, and machines.
  5. Lack of manpower

1.3 Scope Of The Study

The focus of this study was primarily on the factors that have impacted growth and development of small and medium scale enterprises in Nigeria.

How it will benefit the society is by

  1. Employment opportunities
  2. Direct contribution to provision of infrastructures.
  3. Increase in per capital income of citizen.
  4. Contributes to the National Income.

1.4 Significance Of The Study

This focus on the benefits the growth of small and medium scale enterprises. i.e lack of capital and infrastructural facilities. The benefits of small scale industry to the society are:

  1. Contribution to economy output of production.
  2. Capital
  3. Provision of infrastructures

Thus, the society will benefit from it by being part of the goods and services rendered.

1.5 Definition Of Terms


Is used to mean resources pooled together to set an enterprises in motion.


Mean “Growth or change” or “planned growth, in common parlance. Is also a state of mind, tendency and a direction of modernity of socio-economic progress.


This is a person who involves in a business in order to make a profit. A business enterprise that comes into existence as a result of the efforts of a person is known as entrepreneurs or promoters.


This is the process of searching for opportunities for gain through social analysis, and exploiting such opportunity by converting them into profitable business enterprises.

Drucker (1985) also defines entrepreneurship from the point of view of change. To him entrepreneur always search for change, response to it and exploits it as an opportunity.


This is the increase in economic activity, an increase in size, amount or degree of a product.

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