CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The relative importance of Small-Scale Enterprises (SSEs) in advanced and developing countries has led and would continue to lead to a reconsideration of the role of Small-Scale Enterprises in the economy of nations. The development of many countries is often measured by such indices as the level of industrialization, modernization, urbanization, gainful and meaningful employment for all those who are able and willing to work, income per capital, equitable distribution of income, and the welfare and quality of life enjoyed by the citizenry.
There is no doubt that Small-Scale Enterprises exist in most economic environment. The historical background of Small-Scale Enterprises in Nigeria can be traced back to 1946 when the essential paper No. 24 of 1945 on “A Ten year plan of development and welfare of Nigeria 1946” was presented. Small-Scale Enterprise is an all-time necessity. It was there at the beginning; it has gained prominence today and will increase in its importance tomorrow. This is simply dictated by the developmental needs of the Nigerian society.
In recognition of the depth and breadth of the consequences of Small-Scale Enterprises in alleviating poverty and national development, there has been a deep-self interest in recent years for development of Nigeria’s Small-Scale Enterprises particularly since the adoption of the economic reform in 1986. The Small-Scale Enterprise is seen as a key to Nigeria's growth and alleviation of poverty and unemployment in the country.
There is a general belief that the desire for employment generation in this country can be achieved through development of Small-Scale Enterprises (Awosika, 1997; Schmitz, 1995). Gunu (2004) and Aremu (2010) posited that Small Scale Enterprises provide income, savings, and employment generation. They are seen as veritable engines for the development of entrepreneurial capabilities and indigenous technology which will generate employment in the country.
The objective of this work is to examine relevance of Small-Scale Enterprises as a means of generating employment and reducing poverty in the country.
This study, therefore intends to examine relevance of Small-Scale Enterprises as a means of generating employment and reduce poverty in Nigeria. It is hoped that at the end of this study, the researcher would have been able to ascertain whether SSEs have had any positive development towards generating employment in Nigeria.
1.2 STATEMENT OF THE PROBLEM
The Nigerian national economy is characterized by mirage of problems which have militated against the attainment of a developmental oriented governance. The most disturbing thing in the country is the menace of unemployment. Nigeria is faced with the challenge of curbing increase in crime rate, unprecedented increase in prostitution, high mortality rate, and political tuggery among others which are traceable to youth unemployment.
In recognition of the depth and breadth of the consequences of small-scale enterprises in alleviating poverty and national development, there has been a wide spread interest in recent years for the development of Nigeria’s small-scale enterprises particularly since the adoption of the economic reform in 1986. The small scale industry is seen as a key to Nigeria's growth and alleviation of poverty and unemployment in the country.
Therefore, the need for promotion of such enterprises in developing economies like Nigeria is of paramount importance since it brings about a great distribution of income and wealth, economic self-dependence, entrepreneurial development employment and a host of other positive, economic uplifting factors.
In the course of this research questions will be investigated:
i. Has Small-Scale Enterprise helped in generating employment?
ii. What challenges have limited the activities of the Small-Scale Enterprises in their role to provide employment opportunities?
iii. How can SSEs be implemented to benefit the society?
1.3 OBJECTIVES OF THE STUDY
The objectives of the study include the following:
a) To examine the relationship between small-scale enterprises and employment generation in Nigeria.
b) To find out the challenges militating against the successful operation/activities of SSEs in Nigeria.
c) To suggest the ways of implementing SSE for the benefit of the society.
1.4 SIGNIFICANCE OF THE STUDY
This study will be of benefit to the society because it exposes to both the government and the entire citizens the important roles played by SSEs in alleviating unemployment and poverty in the society.
This study will also be of benefit to owners and managers of small businesses because it will bring to their knowledge the major factors that hinder their successful operation and also suggesting the ways with which these problems can be solved towards attaining the set goals of the organization.
Furthermore, the study will help the government to validate the main source of financing SSEs in Nigeria and also suggest ways of improving the existing financing arrangements, if need be.
The output of this study will serve as a blueprint and reference to students and organizations that might carry out further research within this domain in future.
1.5 RESEARCH HYPOTHESIS.
Small Scale Enterprises (SSEs) tends to have a positive relationship with employment generation.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
The study provides insight into employment generation through small-scale enterprise in Nigeria
The study seeks to ascertain whether or not the existence of SSEs in Nigeria has contributed to the alleviation of unemployment and poverty, as well as adding value to the development of the country’s economy. It seeks to understand the factors that have impeded the successful operation of SSEs in Nigeria.
In the course this research several factors posed a limitation to its success. Finance is one of the major factors that played a devastating role in preventing the researcher to use certain approaches and methods in the course of the study. Also, the researcher had a time problem because the available time was share between academic work, domestic responsibilities etc. it was not easy to attain a perfect balance among these activities as such very little time was available for the conduct of this study.
Academic pressure and availability of material were among the limitations encountered by the researcher due to the combination of both classroom lectures and assignment hence the bulk of materials used were limited to the ones available.
1.7 ORGANISATION OF THE STUDY
To achieve the objectives of this study, the paper is divided into five interconnected chapters.
Chapter one deals with the background of the study, statements of the problem, objectives of the study, significance of the study, research questions/hypothesis, scope and limitations of the study, methodology, organization of the study and definitions of study.
The next chapter presents the review of relevant literature which is: meaning and nature of Small-Scale Enterprises, relevance of SSEs in the economy, financing of SSEs, problems of SSEs and employment generation through SSEs in Nigeria.
Chapter three examines the materials used in the study which are: research design, method and sources of data collection, research Instrument and administration, determination of the population of study, determination of the sample size of study, method of data analysis, and decision criteria for validation of hypothesis.
Chapter four deals with the presentation, analysis and interpretation of data.
While the final chapter examines the summary of the findings, conclusion, recommendations and bibliography.
1.8 DEFINITIONS OF STUDY
i. Employment: Is an agreement between an employer and an employee that the employee will provide certain services on the job, and in the employer’s designated workplace, to facilitate the accomplishment of the employer organization’s goals and mission, in return for compensation. The agreement can be verbal, implied, or an official employment contract.
ii. Enterprise: Is an organized business activities aimed specifically at growth and profit making.
iii. Small-Scale Enterprise: Small-Scale Enterprise is a productive enterprise which is owned, managed and controlled by one or two persons or family which influences the decision making and as well has undifferentiated organization structure but has a small share of the market with less than fifty employees (Osazo, 1984).
TABLE OF CONTENTS
PAGE
Title page- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -i
Declaration- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -ii
Certification- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - iii
Dedication- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -iv
Acknowledgement- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - v
Abstract- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -vi
Table of Contents- - - - - - - - - - - - - - - - - - - - - - - - - - - -vii - viii
List of Tables- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ix
List of Figures- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study- - - - - - - - - - - - - - - - - - - - - - -- - 1- 2
1.2 Statement of the Problem- - - - - - - - - - - - - - - - - - - - - - - - - 3 - 4
1.3 Objectives of the Study- - - - - - - - - - - - - - - - - - - - - - - - - - 4
1.4 Significance of the Study- - - - - - - - - - - - - - - - - - - - - - - - - 4
1.5 Research Hypothesis- - - - - - - - - - - - - - - - - - - - - - - - - - - - 5
1.6 Scope and Limitations of the Study- - - - - - - - - - - - - - - - - - - 5
1.7 Organization of the Study- - - - - - - - - - - - - - - - - - - - - - - - - 6
1.8 Definitions of the Study- - - - - - - - - - - - - - - - - - - - - - - - - - 7
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Meaning and Nature of Small-Scale Enterprises (SSEs) - - - - 8 - 10
2.2 Relevance of Small-Scale Enterprises (SSEs) in the Economy- - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11 - 15
2.3 Financing of Small-Scale Enterprises- - - - - - - - - - - - - - 15 - 23
2.4 Problems of Small-Scale Enterprises- - - - - - - - - - - - - - 23 - 26
2.5 Employment generation through Small-Scale Enterprises (SSEs) in
Nigeria - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- 27 - 32
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Preamble- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - -- 33
3.2 Selection of Data- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 34
3.3 Collection of Data- - - - - - - - - - - - - - - - - - - - - - - - - - - - 35
3.4 Population, Sample and Sampling Procedure- - - - - - - - - 37
3.5 Research Design- - - - - - - - - - - - - - - - - - - - - - - - - - - - 39
3.6 Questionnaire Design- - - -- - - - - - - - - - - - - - - - - - - - - - 41
3.7 Method of Data Analysis- - - - - - - - - - - - - - - - - - - - - - 43
3.8 Decision Criteria for Validation of Hypothesis- - - - - - - - 45
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND
INTERPRETATION
4.1 Data Presentation- - - - - - - - - - - - - - - - - - - - - - - - - - - 48
4.2 Data Analysis of Interpretation-- - - - - - - - - - - - - - - - - 51
4.3 Test of Hypothesis- - - - - - - - - - - - - - - - - - - - - - - - - 63
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 67
5.2 Conclusion- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 69
5.3 Recommendation-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 72
References- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 74
Appendixes- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LIST OF TABLES
Table 4.1 Distribution and Collection of Questionnaires- - - - - - -
Table 4.2 Number of Respondents that employ people- - - - - - -
Table 4.3 Number of Respondents Employed by SSEs- - - - - - -
Table 4.4 Method of Employment- - - - - - - - - - - - - - - - - - - - -
Table 4.5 Level of Education- - - - - - - - - - - - - - - - - - - - - - - -
Table 4.6 Source of Startup Capital- - - - - - - - - - - - - - - - - - -
Table 4.7 Level of Employment Generation by the SSEs- - - - -
Table 4.8 Role of SSEs- - - - - - - - - - - - - - - - - - - - - - - - - - -
Table 4.9 Number of Businesses with Challenges- - - - - - - - - -
Table 4.10 Challenges of SSEs- - - - - - - - - - - - - - - - - - - - - - -
Table 4.11 Solutions to SSEs Challenges - - - - - - - - - - - - - - -
Table 4.12 Test of Hypothesis- - - - - - - - - - - - - - - - - - - - - - -
LIST OF FIGURES
Figure 1: Conceptual Framework for Employment Creation- - - - - - - -
Figure 2: Employment for Poverty Reduction and Food Security- - - - -