ROLES OF SMALL SCALE ENTERPRISES IN EMPLOYMENT GENERATION AND FINANCIAL GROWTH IN NIGERIA
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ROLES OF SMALL SCALE ENTERPRISES IN EMPLOYMENT GENERATION AND FINANCIAL GROWTH IN NIGERIA
ABSTRACT
In both rich and developing countries, the government is turning to small and medium-sized businesses and entrepreneurs as a source of economic development and a viable solution to challenges. It is a hotbed of innovation, invention, and employment.
Entrepreneurship has been around as long as Nigeria, and it has helped the economy flourish. SMEs currently contribute to the growth of the Nigerian economy, hence all levels of government have policies in place to support the growth and sustainability of SMEs.
This study analyses the orientation of SME’s and entrepreneurial trends in Nigeria, discusses operational definitions and scopes, and describes the Nigerian government’s position as a participant, regulator, and facilitator of SMEs and entrepreneurship growth, both legally and politically.
It identifies the marketing challenges that SMEs and entrepreneurs face in Nigeria, as well as the provision and enactment of beneficial and supportive laws,
the provision of infrastructural facilities, continuous manpower and development, direct financial assistance to SMEs, and the establishment of finance institutions to support SMEs.
It identifies the responsibilities of small and medium-sized enterprises in Nigerian development and progress. It explores entrepreneurial ideas, issues, and advanced practical marketing solutions.
It closes by explicitly defining marketing’s role in the survival of SMEs and entrepreneurship in Nigeria, as well as making appropriate recommendations. For SMEs to survive, marketing practices and principles must be prioritised.Chapter one
INTRODUCTION
1.1 Background of the Study
Small-scale firms play an important role in any country’s socioeconomic growth. They are a true tool for achieving national macroeconomic objectives in terms of job creation at a low investment cost; SSEs’ catalytic roles have been amply demonstrated by indigenous technology.
Many countries, including Malaysia, Japan, South Korea, and India, have seen SSEs play significant catalytic roles. SSEs make a significant contribution to these countries’ GDP, export revenues, and employment prospects.
According to the Central Bank of Nigeria’s (1993) definition, SSEs are enterprises with a total cost of more than N10 million, excluding the cost of land but containing working capital.
Financial growth, on the other hand, can be characterised as a long-term, gradual increase in the rate of savings and population (Schumpeter 1934).
Simply described, economic growth is an increase in per capita income over an extended period of time or a business cycle.
A person is considered unemployed if a job is not accessible despite his willingness and ability to work at the prevailing wage rate.
The Federal Government of Nigeria has long recognised the importance of promoting the development of SSEs in order to create employment, mobilise local resources, minimise migration from rural to urban areas, and more evenly distribute industrial business across the country.
This is why the government has set up entities to provide financial and non-financial services to SSEs. This study will look at the roles of SSEs in terms of job creation and financial growth in compared to large-scale enterprises.
1.2 Objectives of the Study
The study’s aims are:
1. Evaluate the performance of small-scale industries.
2. To evaluate the contributions of small-scale firms in job creation.
3. Determine the amount to which small-scale businesses contribute to financial growth.
4. Identify the primary obstacles hindering the operations of small-scale enterprises.
5. Make recommendations for how small businesses might enhance their performance.
1.3 Statement of the Problems
Nigeria is a country with an expanding labour force. She lacks finance and international investment in the country due to political instability and other factors.
As a result, an appropriate and efficient strategy to use her limited other resources must be discovered in order to reduce unemployment and boost economic growth.
It is important to emphasise that unemployment is both an economic and a social problem. This means that it not only promotes growth but also creates opportunities for societal problems such as robbery, arson, and suicide.
The primary issue confronting most small-scale businesses is a shortage of funding, whether for the formation of new sectors or to carry out expansion plans.
The inability to get financial credit or resources has hampered or inhibited the expansion of small businesses. The causes for the shortage of funds are the following:
• High inflation rates resulted in significant depreciation of the naira currency rate, making it challenging for small and medium firms to get necessary inputs for expansion.
· limited savings in the economy, resulting in limited capital formation.
· High loan interest rates discourage small and medium-scale entrepreneurs.
The unwillingness of retail banks to extend credit to small and medium-sized businesses due to their low creditworthiness has also limited their expansion over time.
1.4 RESEARCH QUESTIONS.
i. To what extent do small-scale firms contribute to job creation?
ii. Do small businesses contribute to financial growth?
ii. What are the key restrictions impeding the activities of small-scale businesses in Nigeria?
1.5 Statement of Hypotheses
To meet the above-mentioned objectives, the following hypotheses will be tested:
Hypothesis one.
Ho: Small-scale businesses do not play large roles in job creation.
H1: Small-scale firms play important roles in job creation.
Hypothesis two
Ho: Small-scale firms do not contribute much to financial growth.
H1: Small-scale firms have an important role in financial growth.
1.6 Methodology of the Study
The project will collect data from both primary and secondary sources. Secondary sources will include textbooks, journals, lectures presented at various seminars, information from Federal Offices of Statistics, the CBN Annual Report, and so forth.
The primary source will be a questionnaire used to collect information from the study’s sample of respondents. Data acquired from questionnaires will be displayed using a basic frequency distribution table.
The data will be analysed using the chi-square distribution, which is a statistical approach used to examine the difference between two independent statistics.
1.7 Significance of the Study
The study is significant because it will demonstrate how SSEs can be utilised to increase employment, boost financial growth, and assist the country recover from its current recession, if not depression, as they have in many other countries stated in the introduction.
1.8 SCOPE AND LIMITATION
The investigation will be limited to the SSEs as described. Furthermore, the study would limit itself to five (5) SSEs in Lagos state, with these Small Scale Enterprises chosen using a selective sample strategy that will represent the whole population of Small Scale Enterprises in Lagos.
1.9 Organisation of Work
The study will be organised into five major chapters. The first chapter will provide a broad introduction to the study, including an introduction, a statement of difficulties, study objectives, and a study statement.
The second chapter will be a literature review, which will include a general summary of viewpoints on the study’s primary factors from former researchers and experts.
Chapter three will cover the study’s structural composition and the sources of capital for small-scale firms. Chapter 4 will be dedicated to data presentation and analysis, while Chapter 5 will be utilised for summary, conclusion, and suggestions.
1.10 Definition of Terms
ENTERPRISE: An enterprise is an entity that engages in economic activities.
An autonomous enterprise is one that is not classified as a partner.
SMALL SCALE ENTERPRISE (SME): is considered small or medium-sized if it has fewer than 250 employees, a balance sheet total of less than 43 million euros, and no more than 25% of its shares are owned by another enterprise.
SMEs: Small and Medium Enterprises are those firms that fit the definitions provided above.
SMEDAN: Small and Medium Enterprise Development Agency of Nigeria
BOI: Bank of Industry, which provides medium to long-term loans to firms.
CBN: Central Bank of Nigeria, the apex bank in Nigeria that oversees other banks.
Total Quality Management (TQM) is a management concept that states that each individual and division in an organisation should prioritise customer and client satisfaction.
Budget: A form of plan that describes expected outcomes in numerical terms and serves as a control mechanism for feedback evaluation and follow-up.
Forecasting is a process of projecting future company situations in order to develop goals and budgets.
Policy is a general guidance to people’s thinking and actions, or their decision to accomplish something in specific ways or procedures.
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