ABSTRACT
The main purpose of this study is to identify
the problems and prospects of small and medium enterprise in Enugu East Senatorial Zone. To do this, data were
collected from both primary and secondary sources. The main instrument of data
collection was the questionnaire.
The data were presented in tables as
frequency, distribution in the data analysis, the techniques of percentages
frequencies were used. The hypothesis were tested with z-test technique at 5%
significance level.
Having analysed the data the following were
the major findings;
Most of the operators of small and medium
enterprise in Enugu East Senatorial Zone make an average daily turnover of
daily.
There has been a phenomenal growth in the
dimensions and nature of small and medium enterprise in Enugu East Senatorial
Zone.
The growth is mainly on account of people’s
desire to be self employed.
The problems of establishing and managing
small and medium enterprise include lack of capital, lack of managerial skills,
lack of business ideas, high cost of operational facilities, scarcity of
accommodation, lack of efficient preservation, system and poor environmental
and sanitation.
TABLE OF CONTENTS
Approval
Page i
Dedication ii
Acknowledgement
iii
Abstract
Table
of Contents
CHAPTER ONE
1.1 Background of Study 1
1.2 Statement of the problem 4
1.3 Objective of the Study 6
1.4 Hypothesis 6
CHAPTER TWO
2.0 Literature Review 7
2.1 Conceptual Framework 7
2.2 Theoretical Literature 11
2.2.1 Types of Small and Medium
2.2.2 Roles of Small and Medium
Metropolis in Job Creation and Poverty
Eradication 16
2.2.3 Importance of Small and Medium
2.2.4 Problems of Small and Medium
2.2.5 Prospect of Small and Medium
Senatorial Zone 23
2.2.6 Challenges
in Facing Small and Medium
in
East Senatorial Zone 25
2.2.7 Small
and Medium
Credit Scheme: Case Study
Of
Zone 26
2.3 Empirical Framework 30
2.3.1 Ways of Encouraging Small and Medium
Enhance National Development in
Zone 35
2.3.2 Government
Refund on Small and Medium Scale and
Means
of Administration 37
2.3.3 Limitation of the Study 38
CHAPTER THREE
Research
Methodology 40
3.1 Research Design 40
3.2 Area of Study 40
3.3 Source of Data 40
3.4 Sample Size Determination and Sampling
Techniques 41
3.5 Instrument 41
3.6 Data Collection Procedure 42
3.7 Method of Data Analysis 42
CHAPTER FOUR
Data
Presentation of Analysis 44
4.1 Analysis and Interpretation of Data 44
4.2 Test Hypothesis 59
CHAPTER FIVE
Summary,
Recommendation and Conclusion 63
5.1 Summary of Findings 63
5.2 Conclusion 64
5.3 Recommendation 64
Bibliography 66
Questionnaire
67
LIST OF TABLES
Table
4.1 Administration of Questionnaire 44
Table
4.2 Distribution of Respondents 45
Table
4.3 Age Distribution of Respondents 45
Table
4.4 Marital Distribution of Respondents 46
Table
4.5 Educational Qualification of Respondents
46
Table
4.6 Number of Years in the Business 47
Table
4.7 What Extent Does
Affect the Operation of Small
and Medium
Table
4.8 Factor Responsible or phenomenal
growth of
Small and Medium
Table
4.9 Responses of Consumers Feelings 50
Table
4.10 Nature of Competition 51
Table
4.11 Problems of Setting up Small and
Medium Enterprise 52
Table
4.12 Problems of Managing Small and Medium
Table
4.13 Future prospects of Small and Medium
Enterprise 56
Table
4.14 Distribution of Daily Turnover 57
CHAPTER ONE
1.1 BACKGROUND
In recent years, particularly since the adoption of
the economic reform programme in
decisive switch of emphasis from the grandiose, capital intensive, large scale
industrial project based on the philosphy of import substitution to small scale
industries with immense potentials for developing domestic linkages for rapid,
sustainable industrial development. Apart from their potential for ensuring a
self reliant industrialization, in terms of ability to rely largely on local
raw materials, small scale enterprises are also in a better position to boost
employ raw materials, small and medium enterprise, are also in a better
position to boost employment, guarantee a more even distribution of industrial
development in the country, including the rural areas, and facilitate the
growth of non-oil exports.
In Nigeria, the definition
of small and medium enterprises also varies from time to time and according to
institutions, for instance, the Central Bank of Nigeria’s (CBN) monetary policy
circular No:27 of 1988 define small scale enterprises (excluding general
commerce) as enterprises in which total investment (including land and working
capital) did not exceed #500,000 and or the annual turn-over did not exceed
#5.0 million.
Medium enterprise
(excluding general commerce) as enterprises in which total investment and not
exceed #1,000,0000 (1 million) and the annual turnover did not exceed #1.2
million. Small scale enterprises is one of the modern strategies underdevelop
countries are employing to break into the “league” of developed countries.
Fasua (2006:85) categorized business that fall under small scale as follows
firewood supply, plantain production, restaurant services, small scale poultry
raising, operating a nursery for children, home laundry services and host of
others. Business grouped under medium scale according to fasusa are ; soap
production, hair/body cream production, chemical production, commercial
poultry, profession appractes (law, accountancy, education) food and beverage
production among others.
Consequently, both
the federal and state governments and recently, local governments, have stepped
up efforts to promote the development of small scale enterprises through
increased incentive scheme, including enhanced budgetary allocations for
technical, assistance programmes. New lending schemes and credits institutions
for technical assistance programme New lending schemes and credit institutions
such as the National Economic Reconstruction found (NERFOUND), World
Bank-assisted small-scale enterprises loan scheme (SMES), Nigeria Export and
Import Bank (NEXIM), the people’s Bank of Nigeria (PBN) and the Community Bank
have also emerged at both the national and local levels to boost the flow of
development finance of small scale enterprises which have so far depended
largely on personal funds and credit. From informal sources for both their
investments and working capital.
Unfortunately, all
these formal credit scheme have not been able to adequately redress the
fundamental problems which have constrained small scale enterprises access to
credit. The low credit rating of this class
of enterprises, is attributable largely to their weak capital, base,
high mortality rate, low productivity and shortage of managerial skills.
Indeed, the problem of weak capital base, high mortality rate, low productivity
and shortage of managerial skills. Indeed, the problems, of weak capital base,
and poor access to finance appear to have developed into some vicious circle,
leading to slow growth, stagnation and even rapid demise of the small scale
enterprises. The impact of all existing credit scheme interms of providing
funds for meaningful and sustained development among the small scale
enterprise, had medium enterprise to serve the expected role of catalyst for rapid industrial
development, there is need for a more innovative strategy for improved access
to development finance for the small and medium enterprise that would address
their inability to provide collateral securities for loans formal credit
institutions.
1.2 Statement of the
problem
Small and medium enterprise are mostly in managed by
owners and relations. The financing in
most cases in normally provided by the owners. The owners fail to realize the
importance of external source of capital in order affect expansion in the
business. In most cases, the by the owner, members of the family and friends in
most cases.
In another
development, small and medium enterprise experiences difficulties in raising
equity capital from the finance houses or individuals. Even when the finance
house agrees to provide equity capital, the conditions are always
dreadful. All the result to inadequate
capital available to the sector and thus lead to poor financing. This is the
bane of most cottage industries in
medium enterprises are stifled because of this problem of poor financing and
other problems associated with it (Chukwuemeka, 2006). The problems that
emanated from poor financing include:
a)
Lack of competent
management which is the consequence of inability of owners to employ the
services of experts.
b)
Use of obsolete equipment and methods of production because
of owner’s inability to access new technology.
Excessive
competition which resulted
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