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THE CONTRIBUTION OF SMALL SCALE BUSINESS IN CHANGING

A DEPRESSED ECONOMY

(A CASE STUDY OF A SOAP INDUSTRY; DADIN KOWA

ENTERPRISES, JOS, PLATEAU STATE).

SUBMITTED

BY

OSHEIDU DEBORAH

REG. NO: FPN/SO1/2007/2008/HBAM/1693

TO

THE DEPARTMENT OF BUSINESS ADMINISTRATION AND

MANAGEMENT

SCHOOL OF BUSINESS STUDIES

FEDERAL POLYTECHNIC, P.M.B 001 NASARAWA,

NASARAWA STATE

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE

AWARD OF HIGHER NATIONAL DIPLOMA (HND)

IN

BUSINESS ADMINISTRATION AND MANAGEMENT

AUGUST 2009

i
APPROVAL PAGE

This project has been read and approved as having satisfied the

requirement for the Award of Higher National Diploma in the Department

of Business Administration and Management, Federal Polytechnic

Nasarawa, Nasarawa State.

………………………….. ……………………………..

Supervisor Date

…………………………… …………………………….

H.O.D. Business Administration Date

………………………….. ……………………………..

External Examiner Date

ii
CERTIFICATION

This project work titled, The Contribution of small scale in changing a

depressed economy; A Case study of Dadin Kowa Enterprises Jos,

Plateau State; is submitted by Osheidu Deborah to the Department of

Business Administration and Management in Partial fulfillment of the

requirement for the Award of Higher National Diploma in Business

Studies, Federal Polytechnic, Nasarawa.

……………………………… ……………………………

Supervisor Date

iii
DECLARATION

I hereby declare that all works done in this research are as the result of

my efforts.

……………………………. ……………………………..

Miss Osheidu Deborah Date

Student

iv
DEDICATION

This work is dedicated to the glory of God for his mercies and kindness

towards my life throughout the course of my study. May his Holy

name(Jesus) be praise forever Amen.

v
ACKNOWLEDGEMENT

First and foremost, I thank the Almighty God for giving me long life,

health and for his guidance, courage and protection throughout my

period of study.

No one can claim to be a monopoly of knowledge, which is why

the world is independent. This project owes much of my brilliant lecturers

who have nurtured my talents up to this stage; thank you all. My

profound gratitude goes to my supervisor (Mrs.) Sadiya for her guidance,

tolerance and understanding in the course of this study; her tight

schedule and of course, the attendant, inconvenience, may the Almighty

God in his infinite mercy reward her (Amen)

My special thank goes to my parents, Mr. Adekunle Oyidi Osheidu

and (Late) Mrs. Bosede Osheidu for their effort in sending me to school

and for bearing all the cost and the problems, I may have encountered

during my period of study. To my sisters Mrs. Christy, Juliana, and

Yemisi and my brothers; Rotimi and Michael.

I am strongly indebted to my beloved, Joshua Akenu and to all my

friends who are too numerous to mention, as well as my course mates

whom I would have love to be part for their immensely contributions,

encouragement and assistance.

vi
ABSTRACT

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 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.

vii
TABLE OF CONTENT

i. Title Page

ii. Approval Page

iii. Certification

iv. Declaration

v. Dedication

vi. Acknowledgement

vii. Abstract

viii. Table of contents

CHAPTER ONE: INTRODUCTION

1.1 Background of the study

1.2 Statement of the problem

1.3 Objectives of the study

1.4 Significance of the study

1.5 Scope and limitation of the study

1.6 Research questions

1.7 Definition of terms

References

CHAPTER TWO: LITERATURE REVIEW

viii
2.0 Introduction

2.1 Small business defined

2.2 The contribution of small scale business in changing the

depressed Nigeria economy.

2.3 Factor militating against the development of small and

medium scale enterprises.

2.4 Government agency responsible for small enterprises

development (SMDA).

2.5 The role of Nigeria Association of small scale Entrepreneurs

in the development of the sector.

2.6 References

CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY

3.0 Introductions

3.1 Population of the study

3.2 The study sample size

3.3 Research design

3.4 Research instruments used

3.5 Questionnaire distribution and collection

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Presentation of data and analysis

ix
4.2 Test of hypothesis

4.3 Research findings

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATION

5.1 Summary

5.2 Conclusion

5.3 Recommendation

xi Bibliography

xii Appendix

x
CHAPTER ONE

1.0 INTRODUCTION

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

1
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.

2
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.

3
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.

4
 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

5
developing nation. It is in the light of the above, that the study is

focused on;

i. Investigating and trading out in changing of Nigeria’s depressed

economy.

ii. To determine the contribution of government towards

developing small-scale business in the Nigeria’s economy.

iii. To establish to what scale, small scale industries are producing

due to the low capital investment by entrepreneurs.

iv. 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 which are within the industry and

6
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.

7
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

i. 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.

ii. ENTREPRENEUR: - 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.

8
iii. ENTERPRISES: - 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

1.8 REFERENCES

Mrs. Adama Idris; Small-scale Management, (2008) unpublished

lecture note.

Mr. Salihu; Entrepreneurship Development, (2009) unpublished

lecture note.

9
CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION:

Thousands of enterprises fell into group of small business in

Nigeria, they include. According to Asha Benin (1983) carpentry paltry,

ceramis, weavery, soap making, mechanic and repairs services etc. The

majority of Nigerian small business is in the commercial sector and the

trend being to nard services industry and retail distribution. The next one

is the engineering and contribution industry. Ehalaye (1986) emphasized

on the decision and circumstances that motivate people into business

generally and specifically small scale business. Decision such as income

in the security of boss prosperous economic time, job satisfaction, family

support and external encouragement and venture opportunity.

It is viewed that more research into the development of small scale

business or industries will help in enhancing growth and development

which in turn contribute to the economic growth of the country.

Japan as an industrialized nation started with small scale industries and

went along way in developing them thus, becoming what it is today.

10
1.2 SMALL SCALE BUSINESS DEFINED

This has been a no consensus all over the globe as to what a

small business is in precise terms.

This is because:

- Differences in the pattern of overall industrial and economic

growth.

- Differences in size capital and personal.

- Insufficient standard criteria in a business enterprises

- Political and environment differences around the globe etc.

However, the third National Development Plan (1970-80) refers to the

term small business as “the manufacturing establishment employing less

than ten (10) people on whose investment in machinery and equipment

do not exceed N600, 000.00 (six hundred thousand naira).

(Central bank of Nigeria (CBN) in its credit guideline (1983)

defined small business as those businesses with annual turnover of less

than N500, 000.00 (five hundred thousand naira).

The federal ministry of industries in 1973 defines a small business

enterprise as “all manufacturing unit with a total capital investment of up

to N60, 000.00 (sixty thousand naira) and paid employment of up 50

(fifty) people”.

However, due to changes in economic condition particularly with

the introduction of structural Adjustment programme (SPA) to the

11
economy, it defined (1983) “a small industry as those industries with total

investment of between N100, 000.00 (one hundred thousand naira) and

2000, 000.00 (two million naira) exclusive of land including working

capital.

United States committee for Economic development (ED) in this

view suggested that a “small scale business enterprise would have at

least two of the following features. They are:-

- Owner management character.

- Capital is supplied and ownership is held by an individual or

small group.

- The firm is relatively small by individual standard.

- Local area of operating through their product.

- The management is highly personalized.

- Local area of operating through their product.

- High mortality rate.

In view of the difficult of having accepted definition of small scale

business and following the contribution of united state, Committee for

Economic Development, we have to agree with Osaybemi (1983), who

regarded a small scale as one who scale of operations is less than the

average.

12
All that is needed is do is just to take an average figure of certain

variable and all business which fall below this average can be referred to

as small scale business.

2.2 THE CONTRIBUTION OF SMALL SCALE BUSINESS IN

CHANGING THE DEPRESSED NIGERIA ECONOMY

There are various reasons for stressing conscious planning and

development of small scale business industries in Nigeria, Some will be

enumerated in this project as found out in the course of this research

that small scale business have dot to contribute to the changing a

depressed Nigeria economy. Such contributions include the following:-

1. EMPLOYMENT CREATION: - Small scale industries create

employment to the Nigeria citizens which will reduce dependency

on government to provide job for every body and also to a large

extent reduce government expenditure in a way of contributing to a

balanced budget for the economy. The most cumbersome task

challenge in industrial promotion in any economy is the ability to

create employment with risking an unmanageable high rate of

inflation.

During the period, in 1984 to 1986, Nigeria witnessed an era of

retrenchment of works in both private and public sectors of the economy

coupled with the large number of graduates from our tertiary institution

every year. The level of unemployment rise to an alarming and

13
unbearable rate. Energetic men and women were seen everyday on the

street of urban cities and town struggling to sell stuffs like cigarettes

biscuits, drinks etc. just to earn a living, government did not go on to

depends entirely on large enterprises to private employment to the

generality of the public. It is to this end that the following questions arise:

(a) At what rate could new job be created to absorb large

member of graduate from tertiary institution and retrenched

workers in particular?

(b) How fast could new jobs be created to absorb the

unemployment?

It is in answering these question that it be came clear that it is very

necessary adopt a strategy that would get the unemployed to start and

manage their own small scale business to generate unemployment for

them and others, this is how the National Directorate of Employment

(NOE) was established with the sole aim of training men and women in

manpower development so that new jobs would be created.

Information the National Economic reconstruction fund

(NERFUND) in December, 1996 indicate that expected employment to

be generated by the first twenty six enterprise that got approval for loans

stood at one thousand three hundred and one (1301) or an average of

fifty (50) workers or employees per-enterprise. Small scale industries are

14
generally labour intensive, means that a given unit of investment in that

sector directly increases employment opportunities.

2. THE DEVELOPMENT OF ENTERPRENEURSIP: - The small

scale industry is owned and managed mostly by individual who

leads to self fulfillment and self actualization. An entrepreneur

conceives and generates a business venture ideas, takes

moderate risk and beings into existence by putting available

resources together, a business enterprise that never was.

Since the entrepreneur’s aim is to achieve and succeed he always

aims for a standard of excellence in his performance. It is very

encouraging to see that young Nigeria an especially graduate from

tertiary institution era taking to entrepreneurship which was not the

case a decade ago. The future of small scale business in the

country is very bright because more and more graduates

enlightened entrepreneurship will always be conscious of

producing high quality products to reflect their own image and that

of the country. Entrepreneurship development is therefore, a

proper oriented meaningful industrialization

3. COST CONSCIOUSNESS: - The spirit of cost consciousness is

well developed in the small scale business. With the introduction of

structural Adjustment programme (SAP) 1986 it has become

inevitable for successful entrepreneurs to be cost conscious in

15
their activities or spending so that profit can be taught and they

gradually develop, in so doing their finances will not only be

depended on government and other financial institution.

4. PROVISION OF SELF RELIANCE IN CONSUMER AND

INDUSTRIAL GOODS: - One of the objectives of the structural

Adjustment programme (SAP) is to achieve self-sufficiency and

self-reliance which will lead to independent and the ability to stand

above. The spirit of independence and individual basis can lead

eventually to national goal and economic grounds.

Many small scale industries depend on locally sources materials

rather than importing them for manufacturing processing or

servicing enterprise. Small scale industries are gradually forming a

habit of self-reliance, which will yield fruits in the long term and

motivate the industrial sector to grow thus, developing the Nigeria

economy and achieving the micro-economic aggregate.

5. DISPERSAL OF ECONOMIC ACTIVITIES:- The constitution of

Nigeria of 1979, chapter 1.1 section 16 provide that “The state

shall direct it policy toward ensuring that the economic system is

not operated in such a manner of production and exchange in the

hands of a few individual or a group”.

It is now clear that Nigerians cannot depend on government

entirely to provide equitable economic development. This is an

16
area of great challenge to the small scale industries in Nigeria.

Through viable small scale industries the nation can enjoy a rapid

widespread economic base, thereby making many people,

owners/managers and partners in economic advised development

of different part of the country by extending the benefit of economic

progress to the less development areas.

6. DEVELOPMENT OF INDIGENOUS TECHNOLOGY: - Machine

and equipment used in production does not constitute what we call

technology. It is impossible to know how to use such equipment

without acquiring the technology of which they are made up of.

Technology as Chief A.F Kolawale put it as…………body

knowledge on the techniques of condemning materials to derive

desired product such as machine and equipment used in

producing consumer goods”.

The federal government of Nigeria embarked on a massive training

programme abroad for Nigerian technicians, engineers and

scientists, just to acquire necessary knowledge but this has not

yield fruitful results because up to date Nigerians still import almost

everything. Studies carried out by professor S.A Aluko in 1972 and

Dr. Sonaike in 1975 have shown that small scale industries in

Nigeria acquires or Improve domestic technology in the production

of several goods such as:- e.g. bakery products, soft drinks,

17
textiles, footwear, jeaneries, soap production etc. and what

seemed to have been acquired was just further improvement in the

technology of production so as to improve the quality of these

goods. This suggests that one of the main potential contributions

of small scale business in changing Nigeria economy is truly

indigenous technology. With the introduction of SAP in 1986, the

federal government has no reason for importing technology from

developed countries instead it uses the funds to improve on

Nigeria indigenous technology.

In conclusion, use the past decade as case point one would

notice that small scale industries have been contributing their fain

share in changing Nigeria’s economic.

2.2 FACTORS MILITATION AGAINST THE DEVELOPMENT OF

SMALL AND MEDIUM SCALE ENTERPRISE

The following are considered as the factors militating against

development of small and medium scale enterprises:-

(1) Lack of business connection:- It is not clear from the

questionnaire whether lack of business signifies inability on the

part of the particular enterprises to faster fruitful relationship or

whether some non-business considerations pre-determinate

customers

18
(2) When it is noted that almost 16% percent of the respondents also

ascribe the cause of their business failure, it would seem that

many entrepreneurs believe that their success in business is not

strongly related to their ability to perform.

One of the entrepreneurs interviewed by the authors maintains that

business success in Nigeria especially in the retailing, wholesaling,

distribution and contracting sectors is more of a result of who you

know, to what part you belong and from what state you come, from

or father than whether that you can perform effectively.

(3) Lack of capital was the primary factor militating the development.

Experience has shown however that the amount of capital or fund

available is less important than how we use money your own and

that which you can borrow is a very important factor for success.

There was a case of a particular entrepreneur who want to

establish a printing business, had sufficient money only to buy the

printing machine. He depend on a loan to buy an office, purchase

the different printing materials own the business, when his loan

from the bank was not forth coming because of lack of transitional

security of collateral, he had to auction on the machine.

(4) In our investigation, about 101 confess that lack of prior or proper

business experiences constitute their main worry. To know the

tricks and short cuts in business management practice, there is

19
no alternative to experience. Aspiring business should learn as

possible from practitioners regarding the art and science of

business management.

A year or two will be sufficient to acquire reasonable experience in

any profession. In most case and contrary to opinion, the

importance of experience is not the time spent, but what is learnt.

(5) The level of ignorance of some entrepreneurs in record keeping

and financial management is appalling many of them cannot or do

not want to employ the service of qualified accountants on their

part, many owner-manager are not knowledgeable through to

understand the basic principle of accounting and book keeping.

The cannot interpret or use the practical application of the

accounting figure if provided.

The result is that many businesses operate in confusion unable to

differentiate between periodic gains and lose. Profit tends to be

over stated most of the time and personal expenses often are not

distinguishable from business expenses.

2.4 GOVERNMENT AGENCIES RESPONSIBLE FOR SMALL

ENTERPRISES DEVELOPMENT (SMEDA)

Government in an attempt to promote small enterprises in the

country, Government set up some agencies that are change with the

20
responsibility of promoting and fostering the growth of the business

sector:

These agencies are mention below:-

(i) The Federal Ministry of Commerce and Industry

(ii) The Bank of Industry

(iii) The Agricultural Research Institutes

(iv) The National Planning Commission

(v) The Development Bank for Small and Medium Scale Industries

(vi) The Manufacturer Association of Nigeria

(vii) The National Association of Small Scale Industries

(viii) The Indigenous Fabricators and Manufacturer of Machinery

(ix) The Federal Ministry of Finance

2.5 THE ROLE OF NIGERIA ASSOCIATION OF SMALL SCALE

ENTERPRISES ON THE DEVELOPMENT OF THE SECTOR

The Associations play a vital role in promoting small scale

enterprises in the country. Some of the roles are view below:

(1) It is the Nigeria Association of small scale enterprise that initiate

and articulate the idea for small medium scale industries policy

thrusts

(2) These Association serve as a vanguard agency and total point for

rural industrialization which gives raise to poverty allocation,

21
technology acquisition and adaptation, job creation and

sustainable live Laird

(3) The Agency promote and facilitates development programme,

instrument and support service to accelerate development,

modernization net-working and linkage of small and medium

industries.

(4) They also assist in mobilizing internal and external resources,

including technical assistance for small and medium industries

their support institution, trade and associations and non-

government organization.

(5) They oversee, coordinate and monitor development in small scale

industries sub-sector

(6) These association help in designing, promoting collage and micro

small and medium scale industries project.

(7) It provides industrial extension services to small scale industries,

fabricator of machinery and beneficiaries of micro-credit loans.

(8) It establish liaison between research institution local fabricator

and finance, technology, technical skill development and

management of small and medium enterprises.

The Association liaises with external bodies for support and

development of small scale industries in Nigeria.

22
The Association monitors the implementation and compliance with

Federal Government directives, incentives and facilitate for

development of small function of the agency in order to promote

government policies in and outside Nigeria.

(9) Finally, the association plays a vital role in recommending the

small scale industries to the federal government, from time in

consultation with other relevant agencies and organization, and

applicable tax and tariffs and other financial incentive for

promoting the development of small and medium scale industries.

23
2.6 REFERENCES:-

J.O. Asa and A.W. Balogun: Entrepreneurship Development

Programme.

“Rapid industrialization cannot afford to relegation the

development of small and medium

enterprise”

Murduck .J: Information system of modern

management.

Published (2000), 2nd Edition, New Jersey Eajle wood Difa.

“Research development of small scale industries will help in

enhancing the growth of the country”

24
CHAPTER THREE

RESEARCH, DESIGN AND METHODOLOGY

3.0 INTRODUCTION

The research methodology in any study reflects the native of the

subject understudy in carrying out this research work. This is basically a

descriptive survey. Information needs were used on data collection

through primary and secondary service. Questionnaires, interview

observations and consultation with journals were mainly the techniques

of investigation adapted.

3.1 POPULATION OF THE STUDY

The population size under is thirty five (50) people.

This comprises:

- The joint owners of Dadin-Kowa Enterprises twelve (12) people

- Selected working staff of data of Dadin-Kowa factory eight (8)

people

- Members of general public ten (10) people

- Traders five (5) people

3.2 THE STUDY SAMPLE SIZE

This study sample size based on the correctly completed and

returned questionnaire.

Therefore, out of the twenty (20) questionnaires administered, fourteen

(14) questionnaires were correctly completed and returned. From the

25
sample size of fourteen (14) and (9) nine people were joint owners of

Dadin-Kowa Enterprises, while five (5) people were selected working

staff of Dadin-Kowa a soap factory.

Furthermore, the researches interview (15) people five (5) people

were traders and ten (10) people cutting across members of the public

3.3 RESEARCH DESIGN

The questions, highlighted in the questionnaires and interview of

open ended and closes ended types, with the open ended questions, the

respondent were allowed to air their view and hence it made for flexibility

of opinion. But in the close ended questions, the respondents and

multiple choice questions from which answers were to be chosen.

3.4 RESEARCH INSTRUMENT USED

The research instruments used in this work were mainly the

questionnaire interview an observation method. These were predicated

on the statement of problems while confining this work was on

descriptive and historical survey.

3.5 QUESTIONNAIRES DISTRIBUTION AND COLLECTION

A total of twenty (20) questionnaires were distributed and fourteen

(14) were completed and returned.

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CHAPTER FOUR

DATA PRESENTION AND ANALYSIS

4.1 HYPOTHESEIS

This chapter analyzed the date collected based on the following

research questions.

RESEARCH QUESTION: I will the study help to acknowledge the

fact of the contribution of small scale business in our depressed

economy”

In the light of this, the flowing questions were asked: Do you

think that if small business is properly manage effectively in term of

minimization of costs 17 contribution to changing a depressed

economy?

Table 1: management of small scale business

Options Response Percentages(%)

Yes 9 64.29%

Total 14 100%

Sources: Questionnaire 2009

From the about table, the responsible indicate that

respondent who are of the view that if small scale business is properly

manage effectively in term of minimization of cost, it contribution to

27
changing a depressed economy, represented 64.29%is therefore evident

that if small scale business is effectively it a useful contributor to the

economy.

Question: How much capital do you need in term of cost to establish

and run succefully you small-scale?

Table 2: Soap Industry in N Nigeria of today

Options Response Percentages (%)


#5000 - #49000 7 50%
#50000 - #99999 4 28.57%
#100000 – and above 3 21.43%
Total 14 100%
Sources: Questionnaire 2009

From the above total, it can observed that to established and run

successfully a soap industry investor would need between #50.00 to

#99,999.This represent 50%of the represented. In this view they agreed

that small sale business would contribute to the development of

depressed economy with the available cost as state above initial capital

outlay to operate efficiently.

Question: Does small scale business create employment opportunity?

Options Response Percentage(%)


Yes 14 100%
No _ _
Total 14 100%
Source: Questionnaire 2009

From the above table all respondent agreed that small scale business

contributed to the development of a de pressed economy mainly by

28
creating employment opportunities event illustrates semi illustrate and

educated people.

Question: Does small scale soap industry promote or stimulate

indigenous technology?

Table 4: Indigenous Technology

Option Response Percentage(%)


Yes 14 100%
No _ _
Total 14 100%
Source: Questionnaire 2009

The above total table shows that all 100% of the responses as indicate

by the table above agreed that small scale industries stimulate indigenous

technology.

Questions: Rural Development.

Table5: Rural Development

Option Response Percentage(%)


Yes 14 100%
No _ _
Total 14 100%
Source: Questionnaire 2009

From the table signifies that 100%of the respondent agreed that small

scale industry contribute to the development of depressed economy by

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encouraging rural development and maintaining a healthy economic in

general.

Research question2: Whether government policies towards the

development of small side business aid in changing a depressed

economy.

Question: do government policies in restructuring the economic affect

you business?

Table 6 : Government policies in restructuring economy

option Response Percentage(%)


Yes 11 79%
No 3 21%
Total 14 100%

Source: Questionnaire 2009

79% of the response were of the view that government economic and

fisted policies such as structural Adjustment programmer (sap) after the

operation of the business. It is therefore evident that there is a reasonable

apprehension that small scale enterprises do not survive under such

government policies in restructuring the economy.

Question: Do you joy efficient supervision from government agencies to

give necessary advice to you as regards your business operation?

Table7: Supervision from Government

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Option Response Percentage(%)
Yes 2 14%
No 12 86%
Total 14 100%
Source; Questionnaire 2009

The above tables indicate 86%of the response agreed that small scale

business do not often enjoy efficient supervision from the government

agencies established to assist in the development of small scale sector.

Question: Do you receive sufficient funds from government?

Table8: Funds from Government:

option Response Percentage(%)


Yes(sufficient fund) 3 21%
No(insufficient fund) 11 79%
Total 14 100%
Source: Questionnaire 2009

Research question: How does these enumerated problems of small.

scale affect Dadin kowa Enterprises in joss and how are they better

treated? To remain in business. In the high of the above the following

question were asked.

Question: Do you experience difficulties in acquiring the capital needed

for you business?

Table9: Acquisition of needed capital

31
Option Response Percentage(%)
Yes (there is difficulty) 12 86%
No (no difficulties) 2 24%
Total 14 100%s
Source: questionnaire 2009

From the above table it can be seen that 86% of respondents

experiences defaulters in acquiring capital needed for efficient operation

of the business;

Question: How do you rate the loan procurement procedure?

Table10: Loan Procurement procedure

Option Response Percentage(%)


High 14 100%
Moderate _ _
Low _ _
Total 14 100%
Source: Questionnaire 2009

The above table vividly indicates that all the respondents (%)were of the

view that loan procurement for small scale industry operator is very

vigorous, which demoralized most of the operator often.

Question: What is your opinion about the interest rate charged on small

scale industry by financing institutions

Table11: Interest rate

Option Response Percentage(%)


High 14 100%
Moderate _ _
Low _ _
Total 14 100%
Source: Questionnaire 2009

32
All the respondent rate of the view that small scale business find it

difficult to contributed its quota toward changing a depressed economy for

the fact that by interest rate charge on loan advances by financing

institution otter very high.

Question: Do you think there is bias treatment in the loan

Disbursement?

Table12: Loan Disbursement

Option Response Percentage(%)


Yes(there is bias 14 100%

treatment)
No(there is no bias _ _

treatment)
Total 14 100%
Source: Questionnaire 2009

The whole respondents were of the view that small scale experience

was treatment from official concerned about loan disbursement which

make difficult for small scale sector to contribute it quota toward

changing a depressed economy.

4.2 TEST OF HYPOTHEIS

The hypothesis was formulated prior to view of the relevant

from literature. The first of hypothesis is a contribution of

finding response in the questionnaire.

33
Indeed business of ease of application and accuracy,

method used for the research is the chi-square donated by

Greek letter x2, it is frequently used in a hypothesis

concerning the difference between a set of expected or

theoretical frequencies.

Sex Group of the Respondents.

Response Male Female total


Yes 7 4 11
No 2 1 3
Total 9 5 14
Sources: Questionnaire 2009

The above table is known as observed table or critical vane. But to

complete the expected frequency table we adopt this formula:

= (O – E) 2
E

Where: 0=observed frequency

E=expected value of frequency then to get expected value ($) it

will be:

Total row x total columns


Overall total

For Yes row

(A) 11 x 9 = 99 = 7.1
14 14
34
(B) 11 x 5 = 55 = 3.9
14 14

For “No” row

(a) 3 x 9 = 27 = 1.9
14 14

(B) 3 x 5 = 15 = 1.1
14 14

Formulation of contingency table (observed frequency and

expected values

Sex Group of the Respondents

Responses Male Female

Yes 7(7.1) 4(3.9)

No 2(1.9) 1.(1.1)

Note: The bracket figures are expected frequency to get x2

X2 = (0 - E) 2
E

X2 = (7-7.1) 2 x (4-3.9) 2 x (2-1.9) 2 x (1-1.1) 2


7.1 3.9 1.9 1.1

35
= (-0.1) 2 x (0.1) 2 x (0.1) 2 x (-0.1) 2
7.1 3.9 1.9 1.1

=0.0014 + 0.0026 + 0.0053 + 0.0091 x 2

=0.0275

Computation of Degree of frequency (DF)

Where R=Row

K= Column

From the observed table 2 column and we have

Two (2) rows

(2-1)(2-1)

1x1=1

DF=1

4.3 RESEARH FINDINGS

From the demographic date it can be seen that out of

100%of the respondent that answer the question the ration

percentage was 62:75 for the made and female respectively.

Consequently the contribution of small scale business in

clanging depressed economy cannot be over emphasized.

As such effects it has on the economy includes, creation of

employment aid s the development of entrepreneurship cost

consciousness is created encourage nation to be self

36
reliance as well as the development of indigenous

technology.

More so the various government agencies possible for small

enterprises d development such as federal ministry of

industry and l scale industries the bank of industries and

other establishment under this umbrella should invariably

pave ways for the successes recorded by smalls scale

business in changing depressed economy.

37
CHAPTER FIVE

SUMMARY CONCLUSION AND RECOMMENDATION

5.0 SUMMARY

A. The researcher found out that most writers, these served with

questionnaires and those interviewed, viewed small scale business

as a tool to development of the Nigeria depressed economy since

it creates employment opportunities. That employment generation

accounted for about 4% of the contribution made by small scale

industries in changing a depressed economy like Nigeria economy.

By creating employment, it has added to the growth of

standard of living of people which is a major factor in determining

the economy development in any nation, provide that small sector

are effectively and efficiently managed.

B. Government, in its effort in promoting the growth of small scale

business in order to contribute mean fully to the depressed

economy in the process, there are certain problems that hinder

the effort of the government towards the development of small

scale sector which make it difficult for small scale industries to

contribute to the development of a depressed economy.

These problems in the domain of government are highlighted

below:

38
i. Man power shortage:- Government specialized institution for

industrial development and promotional agencies are

inadequate skilled man power to evaluate and asses loan

applicants.

ii. Ineffective supervision:- monitoring of business performance of

the enterprise to which loans have been given, provision of

efficient and effective extension etc do not receive the attention

they deserve.

iii. Insufficient fund:- In the face of competing needs of government

researches, sufficient funds are not available to promote the

needs of the small scale industries.

iv. Effects of government economic policy:- There is apprehension

that small scale enterprise does not survive the government

fiscal and monetary policies such SAP, SFEM etc.

5.2 CONCLUSION

The future of small business in Nigeria bright and promising,

considering the growing awareness of the importance of small

scale industries by the government, financial institution and other

agencies to sustain this, the financing of small scale sector needs

the combined and concentrated efforts of the government and the

provide sectors for it has become evident that both developed and

developing countries. The government importance and potential

39
contribution of small scale business in changing a depressed

economy cannot be ignored.

This research work has shows the contribution of small scale

business in changing a depressed economy. It has also shows that

small scale business in Nigeria are confronted with problems,

these problems are disserve and cannot be combusted by just are

measure but through different means. With various bodies

concerned unrelated efforts and sufficient enlightenment about the

prospect that lies ahead of would be operated self interest

development will arise and this will guaranteed industrial

development.

Finally, this study calls for government cementation of

suggested solution which she believes would bring industrial

improvement and economic buoyancy for small scale business.

5.2 RECOMMENDATION

Small scale business has greatly helped the macro-

economic aggregate of the nation by generating

employment,

Reducing regional depositories and the development of

indigenous technology. Government has also contributed to

the development of the sub sector by establishing agencies

associated to it.

40
Such agencies as the federal ministry of industry, the

National planning commission, the federal ministry of science and

technology, the Agricultural or industrial research institutes, the

indigenous fabricators and manufactures of machinery the federal

ministry of finance, the development Banks for industry, the

manufacturer Association of Nigeria .

Director General of the Agency is to contribute or coordinate,

financial and boost their moral of small scale industries and to

increase their productive base. Therefore in order to effect the

development, growth and structural of small scale industry in

Nigeria and to be consistent with this study, recommendation for

tackling those problems are also considered in there part in

starting with the government, the commercial banks and small

scale business operations.

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