MITIGATING THE CHALLENGES FACED BY SMALL AND MEDIUM SIZED COMPANIES IN MAKURDI
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MITIGATING THE CHALLENGES FACED BY SMALL AND MEDIUM SIZED COMPANIES IN MAKURDI
Chapter One: Introduction
Background for the study
The economic development institutions in Nigeria’s economy recognised the importance of micro, small, and medium-sized firms, particularly as the largest component of the economy. Economic development institutions
Such as the Central Bank of Nigeria (CBN) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), regulate and support the development of the country’s economy and believe that SMEs provide citizens with job opportunities.
According to the researchers’ findings, small and medium firms employ more than 80% of Nigeria’s workers (SMEDAN, 2013). Another study discovered that small and medium-sized firms (SMEs) account for 97% of Nigeria’s economy and provide 70% of job opportunities (Shehu, A. M., Aminu, I. M., NikMat, N. K., Nasiru, A., Johnson, P. O., Tsagem, M. M., and Kura, K. M., 2013).
Various presidents have attempted to lift the country out of poverty through the supply of work, but to little avail. According to recent statistics, the jobless rate is at a record high.
The relevance of small businesses in Nigeria’s economy is therefore practical: they employ citizens, provide them with a source of income, eliminate poverty in the country, and contribute to economic growth.
A survey found that more than 80% of small firms fail within the first five years. Despite the significant contribution of small enterprises to Nigeria’s economy, they experience widespread failure due to fundamental barriers to their existence.
Although small and medium-sized enterprises (SMES) are regarded as veritable engines of economic development, their growth and development in Nigeria have been slow, if not stunted, due to a number of issues and challenges confronting this critical sub-sector of the economy.
Some of the issues identified in the literature as contributing to the slow growth and development of small and medium-sized businesses include inadequate infrastructural facilities
funding and financing challenges, insufficient managerial and entrepreneurial skills, corruption, and a lack of transparency resulting from government regulation and regulators, among others.
It has been stated that the most troubling of these challenges is money, since most new small company firms are not appealing possibilities for banks because they wish to reduce their risk exposure.
Small and medium-sized enterprises (SMEs) in Africa have thus been found to rely largely on their own savings, not only to grow, but also to innovate, whereas firms often need real services support and formal finance assistance, failing which underinvestment in long-term capabilities (Training and R&D) may result.
On the other hand, small and medium-sized enterprises (SMEs) in Nigeria have been blamed for poor performance on management practices, poor access to finds, lo
Several studies were conducted, and the results revealed the numerous problems that small firms face. The study outlined the numerous important problems that hampered the survival and expansion of small enterprises in the Nigerian economy, as provided by many scholars.
Using a multi-case qualitative analysis, managers of successful small firms described in an interview the tools, policies, and tactics they employed to address the identified issues.
The study answered the primary question: what tools, policies, and tactics do successful small business managers employ to offset the obstacles they face?
However, this project work investigates the various advantages and disadvantages linked with historical patterns and initiatives to establish small and medium-sized firms (SMEs) in Nigeria.
It examines and analyses the prospects for promoting small and medium-sized enterprises (SMEs) in Nigeria. This report, titled “Mitigating the challenges faced by small and medium-sized companies in Makurdi,” could not have arrived at a more appropriate moment.
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