CONTRIBUTIONS OF SMALL BUSINESS ENTERPRISES TO THE GROWTH AND DEVELOPMENT
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CONTRIBUTIONS OF SMALL BUSINESS ENTERPRISES TO THE GROWTH AND DEVELOPMENT
Chapter one
INTRODUCTION
1.1 Background of the Study
The impact of Small Scale Enterprises on development cannot be overlooked in any economy, particularly in developing countries where sustainable economic development is highly desirable. Small business enterprises play such an important role in the development of an economy that they cannot be ignored (Lawal, 1993).
According to Osuagwu (2001), small business businesses incorporate the utilisation of both human and non-human resources to attain specific aims and objectives.
Small business enterprises should be one of the development goals because they can provide an impact for multinational corporations, thereby replacing existing foreign resources.
They can also serve as a training ground for local skills, ensuring a more equitable distribution of income and reducing manpower migration from rural to urban areas.
Small-scale firms are critical to economic growth, poverty alleviation, and wealth creation. In an economy like Nigeria, small businesses have long struggled with legitimacy, and planners are frustrated when making forecasts.
(Essang, 1994). Economic history is replete with glimpses into the humble beginnings of today’s great corporations; evidence abounds that nearly all multinational giant corporations in America, Europe, and even Nigeria began as cottage enterprises, growing as their industry grew and through their own sheer ability, marketing skills, and effort to reproduce and produce existing products more cheaply.
Traditional industries, cottage firms, and many SMEs dominated Japan’s economy, which drew strength not just from an abundance of capital, but also from marketing’s role in ensuring the expansion of small-scale enterprises.
Small-scale firms have made significant contributions to Nigerian development by creating jobs, marketing goods and services, and promoting rural growth and development. It has also contributed to the rise of indigenous entrepreneurship in Nigeria.
This research work aims to examine the contributions of small business enterprises to the growth and development of Nigeria’s economy.
1.2 Statement of Problem
Small businesses (small scale enterprises) confront a number of challenges, including low productivity. Productivity is extremely low due to their inadequate financial base and tiny market share. As a result, they have significant challenges in competing effectively.
Another issue confronting small company (small scale) firms is undercapitalization. The majority of small businesses are financed by the owner’s capital, which is never enough to run the business.
This results in the death of physical assets, which is typically caused by a lack of tangible assets that may be used as collateral to get loans from credit institutions.
1.3 GOALS OF THE STUDY
The primary goal of this study project is to examine the contributions and performance of small businesses in the Nigerian economy while taking into account the country’s diverse socioeconomic factors.
It also identifies the challenges of small businesses and makes recommendations on how to enhance their performance in order to boost Nigeria’s economy.
Other objectives include:
i. Identify the difficulties that small businesses (small scale firms) face and the efforts taken to solve them.
ii. To investigate the performance of small business (small scale) firms, including their features and modes of operation.
1.4 RESEARCH QUESTIONS.
This research aims to answer the following questions.
1. Do small business businesses help to improve Nigeria’s economy?
2. To what extent does the availability of finance help small businesses survive?
3. What role do small businesses play in economic development?
4. How do government policies affect the performance of small business enterprises?
1.5 Research Hypotheses
Ho: Small businesses do not help to strengthening Nigeria’s economy.
H1: Small business firms help to improve Nigeria’s economy.
Ho: Credit facilities do not help small businesses survive.
H1: Access to credit helps small businesses survive.
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