CHAPTER ONE

1.0 INTRODUCTION

The importance of small scale business to Nigeria can only be fully

appreciated when one realize the dominant role it plays in our economic

development (Nwana, 1995). The small scale enterprises are the mainstay of the

Nigerian economy providing almost seventy percent of the employment to able

men and women in the society. Before the introduction of Nigerian enterprises

promotion decree of 1972, most business both small and big were managed by

foreign expects, the role of fund to existing and newly established business.

Organization cannot be over emphasized because it serves as a pivot upon which

the success of any organization rotates. In order to provide adequate fund, the

small and medium scale industries’ equity investment scheme require all

commercial and merchant bank to commit 10 percent of their annual pre-tax profit

to the funding of the equity investment in small and medium scale industries.

A business whether small, big, simple or complex, private or public is

created to provide competitive prices. Business in Nigeria has been classified as

small, medium and large. In both the developed and developing countries, the

government is turning to small industries as a means of economic development and

a veritable means of solving problems.

1
1.1 BACKGROUND OF THE STUDY

Small business of all types can help strength local economics. They

contribute to local economic by bringing growth and innovation to the community

in which the business is established. They also help stimulate economic growth by

providing employment opportunities to people who are not employable by large

co-operation.

Small business tends to attract talents who invent their products or

implement new solution for existing ideas. Larger business also often benefit from

small business within the same locality or community as many large corporations

depend on small business for completion of various business function throughout.

Many small business also possess the ability to respond and adopt quickly to

changing economic climate. This is due to the fact that small business is often very

customer oriented as many local customers will remain loyal to their favourite

small businesses in the midst of an economic crisis. This loyalty means that small

businesses are often able to stay afloat during taught time, which can further

strengthen local economics.

Small scale businesses also accumulate less revenue than large co-

operations. This means that they may have loss to loss in time of economic crisis.

2
 Over the years, this sector particularly has been left under developed in

Nigeria. This in the second development plan i.e (1970-1974), although the three

tiers of government (i.e Federal, State and Local Government) in Nigeria were to

support and promote the development of the small scale businesses.

Osoba (2003) stated that 1946 marked of one of the objectives and

development in craft and industries. The promotion and development of products

in Nigeria led to the anticipation of industrial development and ensuring solution

for marketing problems for small scale enterprises. This above gave rise to the

establishment at the department of commerce and industry in various state across

the federation.

The first National development plan (1962-1968) provided Nigeria

economic development in which the industrial sector and its development would

have received appropriate focus and from that period the small scale enterprises

would have been put into economic practice in Nigeria.

The federal government being the highest level of governance attempted in

that period to provide an institution mainly financial to support as a take off grant

for the small scale businesses. Through this means, there was the establishment of

the federal loan board because of the belief that each of capital (money) with

3
which to establish a new industry or for the operation of the older industry’s that

existed was the major constraint to the rapid growth of the small scale businesses.

Osoba (2003) also gave account for the failure of the federal board as lack of

sincerity in their operations. Instead of focusing on the primary objective which is

the development of small scale businesses by ensuring that loan were granted not

on merit but to political associate without commercial consideration.

In the third (3rd) development plan (1975-1980) the government started

objective view of the small scale businesses as the creation of employment

opportunities, mobilization of local resources, limitation of rural-urban

immigration and even distribution of industrial enterprise in different part of the

local government small scale businesses credit scheme (SSICS).

There is no unique or universal accepted definition of small scale businesses.

This is because each authors and scholars see if in their own way.

Therefore according to centre for economic development, a business can be

considered small with at least two of the following characteristics exist;

(1) Manager is often the owners

(2) Area of operation is local

(3) Size is small relative to industries.

4
 The evidence of 1985-1990 say that for any firm to be a small industry such

firm should be able to have capital asset that should not exceed 750,000 including

the marketing capital but excluding the cost of land.

The small business sector is recognized as an integral component of

economic development and a crucial element in the effort to lift countries out of

poverty (Wolfenson, 2001).

Small scale business are driving forces for economic growth, job, creation,

and poverty reduction in developing countries. They have been the means through

which accelerated economic growth and rapid industrialization have been

achieved. Furthermore, small scale business has been recognized as a feeder

services to large scale industries (Fabayo, 2009).

The third National development plan of 1975-1980 define the small scale

business as a manufacturing establishment employing equipment do not exceed

N600,000.

The federal ministry of commerce and industries in Nigeria and the Nigeria

bank for commerce and industries (NBC) were set up in 1981 and 1982 for the

purpose of providing revolving loan scheme for small scale businesses; sees small

scale businesses.

5
As the costing not more than N500,000 including the cost of land but exceeding

the working capital.

At the moment in Nigeria, following the national council for industry (NCI,

2002) classification, small scale business full within the following categories of

enterprises; small scale business if the enterprise has a capital outlay of between

1.5 million and N50 million including working but excluding cost of land and

workforce of between 11-100 employees. Generally, these enterprises engage in

the production of light consumer goods that are primarily related to food and

beverage, clothing, electrical parts, automotive parts, manufacture, leather

products, soap and detergents, wood works. Small scale business in Nigeria are

divided into three sectors;

(1) Production sector including agricultural processing, manufacturing, and

mining.

(2) Service sector

(3) Trading sector including wholesales and retails (Fabayo, 2009)

1.2 STATEMENT OF THE PROBLEMS

Economic development is a nationwide problem which the small industries

are capable of solving effectively.

6
 They are many problems affecting small scale businesses such as the

development of raw materials, sourcing of raw materials and provision of training

places for workers and students on industrial attachment.

They are also problems of unemployment, capital for large establishment

with the issue of under utilization of scarce resources and lack of provision of

impact substitution goods, and also with lack of linkage effect among several

factor in the economy.

In the of the above mentioned problems, the fact that small scale businesses

are vital for economic development of any country, state or local government and

numerous problems which small scale businesses and capable of solving motivated

me to research or write on this topic.

1.3 OBJECTIVE OF THE STUDY

The general objective of the study is to assess the effect of small scale

businesses on the Nigerian economy they are other specific objective which

includes;

1. To establish linkage between small scale businessand the economic

development of the state in particular.

7
 2. To determine the extent to which small scale businesshas developed the

state.

3. To identify the various way small scale businessgenerated income to the

state.

4. To uncover the fundamental problem that confront small scale businessin

their effort to develop the state.

5. To find out the effects of the import restriction on the operations of small

sale enterprise in Nigeria.

1.4 RESEARCH QUESTIONS

1) Is there any significant relationship between small scale business and

economic development of Katsina State?

2) To what extent does small scale businesses have contribute to the

development of Katsina State?

3) Does small scale businesssignificantly increase income generation in

Katsina State?

4) What are the fundamental problems restricting small scale business in the

development of Katsina State.

5) Is there any effect of the import restriction on the performance of small scale

enterprises?

8
1.5 SIGNIFICANCE OF THE STUDY

It is imperative to state that this study focuses primarily on the impact of

small scale businesses in urban development prospects at katsina.

On government side, this research work would help the government on how

to improve the activities of small scale business to boast the nation’s economy. On

the industries the research work will serve as guideline for them to establish a new

small scale enterprise. They will also find this work timely and of immense

assistance.

To the researcher as it will help him to identify the problems and prospect of

small scale enterprise in Katsina with the view of finding solutions that will make

them grow into multi-national companies.

1.6 SCOPE AND LIMITATION OF THE STUDY

This study is directed to assess the impact in which small scale businesshas

played in the economic development of this study.

The scope of this study covers Katsina local government area in Katsina

State. Also examine whether the activity of small scale enterprises has any effect to

the economy of Katsina local governments.

9
 The success of this study cannot be achieved without the researcher

encountering some constraints or limitations. These limitations include among

others; first, the major limitation of this research is time constraints. This research

mainly required enough time to vividly survey of the town in question.

The time allotted for this research work and attending to other academic

engagements was not enough for this kind of research.

More so, another serious limitation to this research was inability of small

scale business operations to give relevant information about the performance of

their enterprise, because they are thinking that the study was an avenue for

government to tax their businesses and there by hide the relevant information that

may be more beneficial to this study.

Another serious limitation to this research is the issue of financial constraint,

the researcher spent a lot of money as a result of going through thorough

investigation both internally and externally.

Lastly, the problem of finding the relevant materials for this research work

was another limitation to the study, such as journals, Magazines, newspapers,

textbooks and relevant materials needed for the research were not enough.

1.7 DEFINITION OF KEY TERMS

10
 The definition of the key words will help to understand the subject of this

research work.

1) INDUSTRY:- Is an economic activity concerned with the processing of raw

materials and manufacture of goods in factories.

2) ENTREPRENEURSHIP:- Is the capacity and willingness to underrate

conception, organization and management of a productive venture with all

attendant risks, while seeking profit as a reward.

3) PRICE:- An amount for which goods and services are obtained.

4) ORGANIZATION:- Is a social unit of people, systematically structured

and managed to meet the need or to pursue collective goals.

5) RECOVERY:- This is the period where there is successful change in

economic activities.

6) CAPITAL:- This is the amount of money required to carry out a particular

venture and pay all financial obligation of the business.

7) ENTREPRENEUR:-This is an individual’s who notice opportunities and

take action to mobile necessary resources to produce new improved goods in

the environment for targeted market.

11
8) MARKETING:- Kolter (1980:9) defines marketing as getting the right

goods and services to the right people at the place at the right at the price

with right communication and promotion.

9) ENVIRONMENT:- Kazmi (2002) described the environment as the

aggregate of all conditions, events and influences that surrounds and affect

it.

10) SMALL SCALE INDUSTRY:- This is a type of business that is owned by

one or few persons with direct owner influence in the decision making and

having a relatively small share of the market and low capital requirement.

12
 CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

The first and second world war effect bring about the great struggle for

industrialization in the world, to satisfy the want and need of the people. But

industrialization cannot be achieved without the required capitalization and

expertise. All resources have been committed to war; the world cannot meet the

demand at large business.

The noon for industrialization pressed on in other to save the world from

state at lack and poverty, everyone goes about with the limited resources that are

not carried away by war, to state one small business or the, with one reason to

survive (fight poverty). Every small business entrepreneur received strong support

from the government, who in accordance to the law execute her roles, so as to

ensure the survival at entrepreneur in the economy.

2.1 CONCEPT OF SMALL SCALE BUSINESSES

The meaning of small scale businesses cannot be said to be adequate in a

single definition. For many of these definitions are base on the background,

orientation and environment of the scholars.

13
 Chris et al., (2000) define, small scale businesses as those which are owned

and controlled by one or a few persons, with direct owners influence in decision

making and having relatively small share of the market in the applicable industry.

National Economic Reconstruction Fund (NERFUND) and World Bank

Sponsored Small Scale Enterprises Scheme, define small scale businessas

enterprises whose fixed assets (excluding land) plus cost of investment do not

exceed 10,000,000 naira (Agu, 2005). The Central Bank of Nigeria define small

scale business(for commercial merchant Bank loan), as one whose capital

investment (including land and working capital) does not exceed 5000000 naira or

whose turn over does not exceed 25,000,000 naira annually (Agu, 2005). Nigeria

Bank for Commercial and Industry (NBCI) define small business as a firm whose

assets (including working capital but excluding land) does not exceed 750,000

naira (Agu, 2005).

Shoaib K. (2017), define small scale businessas a privately owned and

operated business, characterized by a small number of employees and low

turnover. A small enterprise usually only share a tiny segment of the market it

operate in.

Okafor et al., (2002) define small scale enterprise as one, which is,

“independently owned are operated and not dominant in its field of operation”.
14
 National Council for Industry (NCI, 2002) classify, small scale business of

enterprise fall within the following categories of enterprise or business; if the

enterprise has a capital outlay of between 1.5 million and 50 million including

working but excluding cost of land or workforce of between 11-100 employers.

Alex K. (2017), see small scale industry, refer to the size of a company in

term of the number of employees and sometimes the annual turnover. Depending

on the country and the industry, a small-scale industry employs between 250 and

1,500 people. Anything above that is a large-scale industry.

Ajiebefun et al., (2003) defined small scale enterprises as commercial

enterprises that have ten (10) or fewer employees. This study will fake on NCI and

Ajiebefun (2003) classification of an enterprise with capital outlay of between

N1.5 million and N50 million including working capital but excluding cost of land,

and work force from 11 employees and above.

Adidu, F. A and Olanye P. A (2006), summarize small scale businessas

those business whose capital investment do not exceed at N5,000,000 (including

land and working capital/or who turnover are not more than N25,000,000 annually.

15
2.1.1 PROCEDURES OF ESTABLISHING SMALL SCALE BUSINESSES

Ukeeve A. Y (2003); say that before establishing small scale industry, it is

very essential to conduct a feasibility study of the proposed project. The study can

be given to an export like management consulting firm to do it for the promoter of

the industry. The failure rate of small scale businesses in Nigeria is very high and it

has been traced to failure to prepare any feasibility study before commencing

operation. The argument has been positioned that small scale businesses do not

need to conduct feasibility study because of the size and more so enterprise with

good management does need a feasibility study, it is also believed in some quarter

that feasibility study may not be useful in the face of the highly dynamic in nature

of the present business environment where one is not sure of his business will be in

existence tomorrow.

There is a saying that “lack of previous planning does not constitute on

emergency but it can lead to one” here feasibility report tell you where you are

going. The feasibility report define the projects, project idea, current condition

within the industry, anticipated future trends with the economy and lively effect on

the proposed project. It discusses the major constrains incentives and the major

procedure entry, if feasibility study indicates that the project is variable then it is

time that the project is viable the it is time that the complete registration formation,

16
and registration exercise can be done with corporate affairs commission in case of

Nigeria situation.

2.1.2 LEGAL REQUIREMENT FOR FORMATION OF SMALL SCALE

INDUSTRY

According to Nellie A. (2012) stated that a business involved planning,

making key financial decision and completing a series of legal activity. These are

the general outline for the formation and registration of small scale industry.

Step 1: Write a Business Plane

Use the tools and resources to create a business plan. This written guide will help

you map out how you will start and run your business successfully.

Step 2: Get Business Assistance and Training

Take advantage of free training and counseling services, from preparing a business

plan and securing financing, to expanding or relocating a business.

Step 3: Choose A Business Location

Get advice on how to select a customers-friendly location and Coplay with zoning

law.

17
Step 4: Finance Your Business

Find government backed loans, venture capital and research grants to help you get

started.

Step 5: determine the Legal Structure of your Business

Decide which form of ownership is best for you; sole proprietorship, partnership,

Limited Liability Company (LLC), cooperation and nonprofit or cooperative.

Step 6: Register a Business Name (“Doing Business As”)

Register you business name with your state government.

Step 7: Get a Tax Identification Number

Learn which tax identification number you will need to obtain from the FIRS and

you state revenue agency.

Step 8: Register your state and Local taxes.

Register with your state to obtain a tax identification number, worker

compensation, unemployment and disability insurance.

Step 9: Obtain Business Licenses and Permits

Get a list of federal, state and local licenses and permit required for you business.

18
Step 10: Understand Employer Responsibilities

Learn the legal stop you to take to hire employees.

2.1.3 GOVERNMENT POLICIES FOR SMALL SCALE BUSINESSES

Abdul (2012); stated that any country that is desirous of rapid

industrialization and economic prosperity cannot afford to relegate the government

of its industries. The roles of government in entrepreneurship development in

Nigeria become significantly only after the Nigeria Civil War (1967-1970) when

government established support mechanism aimed at cushioning the problem of all

entrepreneurship development.

Since the mid 1980s, there has been increased commitment of government to

entrepreneurship development, especially after the introduction of the Structural

Adjustment Program (SAP) in 1986), add to this in the establishment of the

following;

(1) National Open Apprenticeship Scheme (NOAS):- It was established in

(1987) to empower the graduating students to be-self-reliant, improper

implementation of this program become the major problems.

(2) National Directorate of Employment (NDE):- With the mission of

designing and implementing programs to combat mass unemployment in

19
 (1988). Large number of unemployment or employed person outweighed the

resources support.

(3) National Economic Empowerment and development Strategies

(NEEDS):- It is established in the year (2000) to reduce poverty, creating

wealth and generating employment through creating the environment in

which business can thrive. Together with the State Economic Empowerment

and Development Strategies (SEEDS) which seek to implement and

integrate rural development programs to reduce the flow of migration from

rural to urban area.

(4) National Economic Reconstruction Fund (NERF):- was established in the

year (1989) to provide medium and long term loans and to participate in

commercial and merchant banks for lending to small scale businesses in

rural area.

2.2 NEEDS FOR SMALL SCALE BUSINESSES IN THE

DEVELOPMENT OF THE STATE

Zainab D. (2005) stated that, the steady increase of large scale business

organization, the small trade of the small scale businesses has not been eliminated.

Small scale still goes side by side with big firm because they are still very useful in

20
some field. They perform certain function which cannot be adequately performed

by firms or large scale business in the following areas;

1) High cost of production:- In some firm of production, cost of production

continues as production expands. Therefore, small scale businessis the most

economic unit of production in such field.

2) Where there is small market, a village is not likely to contain as many

consumers as that expert or professional, like management consultant firm to

do it for the promoter of the industry.

Hence it is small peasant industries that can earlier cater most

profitably for this small market and not the big firm.

3) Where direct service are required, small scale businesses will be very

suitable in such area where direct services are needed. For instance, lawyer,

accountant, barbers, hair dressers do not demand a large scale business.

4) Where purchase is done in bits, it is the small village retailer that can sell

sugar cubes and cigarettes in stick, rather than in packets. These retail

worker cannot be done by big firms.

21
2.3 THE IMPACT OF SMALL SCALE BUSINESSES IN NIGERIA AND

PEOPLEOF KATSINA LOCAL GOVERNMENT.

Watson. R. (2005) opens that so much interest has not given to the

development of countries started off believing that their salvation lie in achieving a

high rate of industrial development. Some financial resource in heavy industries

Can’t provide answer to the problem of growth and development to extent

anticipated. It is with the realization that the country has been assigning small scale

businesses a vital role to play in the nation’s development strategy in recent

development plans.

A small scale businesses play a significant role in the development of any

economy among and its direct contribution towards those objectives include:

(1) Provision of employment opportunities:-

Unemployment has become so acute throughout the country as a result of

comparatively high level schooling compared 10-20 year before education has

produced a tremendous number of people who now roam to return to the farming

job. The worst part of it is that most of those applicants are educates who have

undergone only the primary education or high school. Small scale businesses

provide employment to these categories of people of a lower unit cost compared to

22
large scale industries. It also prepares these people to establish their own business.

In future, small scale businesses also provide employment for rural areas.

(2) Saving of valuable foreign exchange:-

By producing materials at home, which output is been imported, a lot of

valuable foreign exchange is saved. For example, goods like chocolate drinks,

matches, cement, baby foods, toilet papers, biscuits, cosmetics, shoes, blouse,

shirts, crumpling, salting drugs and so forth which many years ago were consumed

by West Africans through import are now being made by West African

manufacturing industries. Currencies saved and people’s money remains in the

country.

(3) Helps to spread productive industrial activity in order to avoid concentration

of industries which also reduce the flow of production to urban cities. This

helps the nation in two ways;

(a) Help to avoid socio-economic problem of concentrations and fastening

a balanced development of all parts of the country.

(b) Also provides economic and financial links between rural areas

thereby creating progressive rural economic.

(4) A well organized small scale businesses programme would assists in

promoting the aim of the Nigeria enterprises promotion degree (1972 and
23
 1997). A developing country like Nigeria with its shortage of experience

management and technical personnel could use small scale businesses to

upgrade its existing management skills. Sule, E. I. K. (2005)

2.4 CHARACTERISTICS OF SMALL SCALE BUSINESSES

Osoba, A. M. (2003) further states that there is a high degree of seasonality

and under employment in these enterprises.

A greater percentage of industries are sole entrepreneur with few percent in

partnership, co-operative and registered companies.

The industry is closely integrated with, and meets only immediate need of

the local community in which it operates. It has little knowledge of wide or distant

marketing.

Very few of these entrepreneurs have had formal education. Most of them

either have not been to school at all or drolled out after primary school level. For

this, most of them have no knowledge of assessing marketing condition and formal

company policies.

24
2.5 SOURCES OF FUND FOR SMALL SCALE IUNDUSTRIES

Ezeh, T. C (2003) says that immediately the business to be established has

been decided with the assurance of the following factories, availability of raw

materials, market, personnel e.t.c the next question to be asked is where will the

capital (money) come from?

Among the many sources of fund available to start up small scale businesses

are:

Purchase, capital inherited, plough back of profit, loan capital, factoring,

borrowing, loan from financial institution, overdraft, invoicing, discounting

differed tax payment.

2.6 PROBLEMS OF SMALL SCALE BUSINESSES IN NIGERIA

Abimaje, Y (2004) say that there are numerous problems which are the

cause for the failure of small scale businesses among them are the following:

1. Poor Business Accountability:- The problem of small and medium scale

industries is rarely only financial often it is only a symptom, the diagnosis of

which reveals other weaknesses. Business finance and stock are mixed up

with personal finance and stock required for personal needs.

25
2. Lack of Enterprise:- This relate to the lack of experience in the line of

business which the small and medium scale business owners enter.

They may have experience in one line of business and not in another due to

his unparticular new line of business.

3. Poor record Keeping:- Some small scale industrialist believes that the

maintenance of book of accounts and other business record is costly and

necessary. They feel that they can defer the keeping of notes on important

business transactions such as amounts due to be paid to supplier and amount

due from customer. Some people feel that keeping records could be a source

of leakage of business secretes to others.

4. Under Capitalization:- Money matters are not matters at fancy. Virtually,

all businesses need capital for its operations and growth. But many of the

small and medium scale industry units are under-capitalized. This problem

of finance is in three dimensions. The need for start-up capital, working and

expansion capital. Long-terms capital is a particular need of small and

medium concerns. This capital is obtained by personal investment or by long

term borrowing.

5. Lack of business knowledge:- Knowledge consists of facts and theories

that enable people to understand phenomena and to solve problems. Various

methods have been found useful in acquiring knowledge to solve problems.

26
 These are habits, trials and errors authorities, traditions, institutions, experts

opinions, personal experience, educations and induction etc. A small or

medium scale business owner- who has not acquired enough knowledge

about business may likely fail if he or she enters into it.

6. Poor/Wrong Location:- Where a business is sited is called its location. The

factors which usually influence the location of business includes, nearness to

raw materials, market, sources of power and access to supply of labour and

transport facilities e.t.c.

7. Inadequate Planning:- Planning is define as the determination in advance

on what to do, how to do it, when to do it, who is to do it, for whom to do it

and even why should it be done. It encompasses setting objectives as well as

making day to day decision on how these objectives can be achieved. It

involves the determination of both ends and means.

8. Unplanned Expansion:- Once a business becomes successful, there is a

tendency to expand it in order to make it grow bigger. However there is a

limit to which a small business would grow, beyond which it becomes

unproductive or inefficient. If appropriately planned, expansion was not

carried out. Therefore, expanding rapidly sucks up sorely needed working

capital. It is therefore quite easy for businesses that have a good chance of

27
 making it fail because of liquidity problems caused by unplanned and

premature expansion.

9. Inadequate Credit Control:- A common problems facing small or medium

scale business owners is whether or not to extent credit. These firms that do

grant credit must protect against the practice of extending too much credit.

But at times soap of them posses poor credit granting practice credits

extended to friends and relations are often times too hard to collect in time

of need. These thereof increase the financial predicament of the small or

medium scale business owners.

10. Neglects and Time Pressure:- Since most small and medium scale business

owners are usually managers, they must guard their business against bad

habit, poor health, laziness, marital problems or apathy. Others include

devotion of too much to community activities or in policies. These tend to

conflict with business profitability objectives.

28
 CHAPTER THREE

3.0 INTRODUCTION

Methodology in research works refers to set of guide line or framework to

follow in order to arrive at an unbiased conclusion and it is a very important tool

without which a research work cannot be possible. The information is usually

figurative in nature which is referred to as data. It is base on these data that the

investigations were carried out.

3.1 RESEARCH DESIGN

This study adopts both descriptive research design and survey research

design. The research design is used as ex-post factor research. It help in accessing

the impact of small scale businessin Katsina.

3.2 STUDY POPULATION, SAMPLE SIZE AND SAMPLE SELECTING

PROCEDURE

The study population comprises of all the small scale businessin Katsina

State. Some small scale businesswas used through the use of purposive sampling

method and (100) respondent were selected by the use of simple random, because

the study intends to select a representative without bias from the accessible

29
population. This ensures that each member of the target population had an equal

and independent chance of being included in the sample.

3.3 VALIDATION OF THE INSTRUMENT

After designing the instrument for data collection, the instrument was

screened and validated by the researcher’s supervisor and his inputs made. The

version of the instrument was also check, tasted by another educationist and made

inputs. After all, the final version of the instrument was designed.

3.4 INSTRUMENT FOR DATA COLLECTION

A questionnaire was used to collect relevant information. The questionnaire

consists of items that were to measure the impact of small scale businessin Katsina

State. The questionnaire was self designed, and was self administered on one to

one basis. The researcher distributes questionnaires to the respondents and were

collected from them the after completion.

3.5 METHOD OF DATA COLLECTION

The study used a self-administered questionnaire to collect data from the

respondents. Mcmillan and Schumacher (2010), recommended the use of

questionnaire if the researcher knows that the respondents will be in position o

answer the question.

30
3.6 METHOD OF ADMINISTERING QUESTIONNAIRE

For the purpose of this research work questionnaire will be constructed and

administered to some selected sample of (100) small scale businesses in Katsina

local government.

3.7 METHOD OF DATA ANALYSIS

In analysis and evaluating of the research questions and to ultimately

achieve the research objectives. The percentage distribution table was used to

summarize the respondent’s responses.

31
 CHAPTER FOUR

DATA PRESENTATION AND ANALSYIS

4.0 INTRODUCTION

This chapter deals with data presentations and analysis of data collecting

with respect to the research work. Some reasonable amount of hundred (100)

question were distributed out of which (75) were returned and their view were

analyzed and presented as shown below using table of percentage.

4.1 DATA PRESENTATION AND ANALYSIS

This study was conducted to access the impact of small scale businesses in

social economic development of rural areas (A case study of Katsina Local

Government, Katsina State). Data was analyzed according to the research question

using table of percentage.

The questionnaire were treated clearly showing the responses of the

respondents under study while at the bottom of each table, the total number of

respondent was shown as well as the average percentage.

32
 SECTION “A” (Analysis of Personal Data)

Table 4.1: Return rate of questionnaire.

Questionnaire No. of Respondent Percentage (%)

Number returned 75 75%

Number not returned 25 25%

Total 100 100%

Table 4.1 show that the questionnaire distributed, implies that the

respondents are interested are because of their interesting responses. The table

show that the questionnaire distributed are collected which implies that 75% of

questionnaire are returned while only 25% of the questionnaire are missing.

Table 4.2: Frequency distribution of respondent’s base on gender

Gender Respondent Percentage (%)

Male 55 73.3%

Female 20 26.7%

Total 75 100%

33
 Table 4.2 shows clearly that majority of the respondent are male which carry

the total percentage of 73.3% while 20 are female which carry the total percentage

of 26.7%. which implies that male response to the questionnaire.

Table 4.3: Distribution of respondents based on age of experience

Age of experience Respondent Percentage (%)

1–5 30 40%

6 – 10 25 33.3%

11 – 15 20 26.7%

Total 75 100%

Table 4.3 shows that 30 respondent are from 1 – 5 which carry 40%, 25

respondent from 6 – 10 with a percentage of 33.3% and 30 respondent from 11- 15

with a percentage of 26.7%. Which implies that 40% response to the questionnaire.

Table 4.4: Distribution of respondents based on Marital Status

Status Respondent Percentage (%)

Married 40 53.3%

Single 35 46.7%

34
 Total 75 100%

Table 4.4 shows that 40 respondent were married men and women with a

percentage of 53.3% while 35 respondent were single with a percentage rate of

46.7%. Which implies that 53.3% are married men and women.

SECTION “B” (ANALYSIS OF QUESTIONNAIRE)

Table 1: There is a significant impact of small scale businesses in the

development of Katsina State.

Responses Number Percentage (%)

Strongly agreed 53 70.7%

Disagreed 22 29.3%

Total 75 100%

From the above Table, show that 53 respondent which comprised 70.7%

strongly agreed that there is a significant impact of small scale businessin the

development of Katsina State while 22 respondents representing 29.3% disagreed

with the statement. This implies that small scale businesshas a significant impact

on the development of Katsina State.

35
Table 2: Small scale businesses established a linkage to economic development
of the state.

Responses Number Percentage (%)

Strongly agreed 62 82.7%

Disagreed 13 17.3%

Total 75 100%

From the above Table, it reveals that 62 respondents which comprise 82.7%

strongly agreed that small scale businesses establish a linkage to economic

development of the state while 13 respondents representing 17.3 % disagreed with

the statement. This implies that small scale businessestablished a linkage to

economic development of the state.

Table 3: Small scale businessis mean of survival to the people engaged in

Katsina State.

Responses Number Percentage (%)

Agreed 69 92%

Disagreed 6 8%

Total 75 100%

36
 From the above Table, clearly show that 69 respondents which comprised

92% agreed that small scale businessis means of survival to the people engaged in

the state while 6 respondents presenting 8% disagreed with the statement. This

implies that small scale businessis mean of survival to the people engaged in

Katsina State.

Table 4: Small scale businesses create job opportunities in the state.

Responses Number Percentage (%)

Strongly agreed 48 64%

Disagreed 27 36%

Total 75 100%

From the above Table, clearly show that 48 respondent which comprised

64% strongly agreed that small scale businesscreate job opportunities in the state

while 27 respondents representing 36% disagreed with the statement. The implies

that small scale businesses create job opportunities in the state.

37
Table 5: Small scale businesscontribute to the development of rural market in
Katsina State.

Responses Number Percentage (%)

Strongly agreed 45 60%

Strongly Disagreed 30 40%

Total 75 100%

From the above Table, clearly show that 45 respondent which comprised

60% strong agreed that small industry contribute to the development of rural

market in Katsina State while 30 respondent representing 40% strongly disagreed

with the statement. This implies that small scale businesscontribute to the

development of rural market in Katsina State.

Table 6: The existence of small scale businessin Katsina State reduces

unemployment rate.

Responses Number Percentage (%)

Strongly agreed 40 53.3%

Agreed 20 26.7%

Disagreed 15 20%

38
 Total 75 100%

From the above Table, show that 40 respondent which comprised 53.3%

strongly agreed that the existence of small scale businessin Katsina State reduces

unemployment rate and 20 respondent which comprised 26.7% while 15

respondents which comprised 20% disagreed with the statement. This implies that

small scale businessin Katsina State reduce unemployment rate.

39
Table 7: Small scale businessgenerates income to the government of Katsina
State.

Responses Number Percentage (%)

Strongly agreed 43 57.3%

Strongly Disagreed 32 42.7%

Total 75 100%

From the above Table, clearly show that 43 respondents which comprised

57.3% strongly agreed that small scale businessgenerate income to the government

of Katsina State while 32 respondents which comprised 42.7% strongly disagreed

with the statement. These therefore, clearly show that small scale businessgenerate

income to the government of Katsina State.

Table 8: Lack of compliant of small scale businessreduces the income

generation of the government.

Responses Number Percentage (%)

Strongly agreed 58 77.3%

Strongly Disagreed 17 22.7%

Total 75 100%

40
 From the above Table, show that 58 respondent which comprised 77.3%

strongly agreed that lack of compliant of small scale businessreduces income

generate to the government while 17 respondent which comprised 22.7% strongly

disagreed with the statement. The table clearly shows that lack of compliant of

small scale businessreduces the income generation of the government.

Table 9: The income generated from small industry used to facilitate special
project in the state.

Responses Number Percentage (%)

Agreed 70 93.3%

Disagreed 5 6.7%

Total 75 100%

From the above Table, clearly show that 70 respondents which comprised

93.3% agreed that the income generated from small scale businessis used to

facilitate special project in the state while 5 respondents which comprised 6.7%

disagreed with the statement. This implies that the income generated from small

scale businesscan be use to facilitate special project in the state.

41
Table 10: Lack of sufficient capital restrict the smooth growth of small scale
businessin Katsina.

Responses Number Percentage (%)

Strongly agreed 65 86.7%

Disagreed 10 13.3%

Total 75 100%

From the above Table, show that 65 respondents which comprised 86.7%

strongly agreed that lack of sufficient capital restrict the smooth growth of small

scale businessin Katsina while 10 respondents which comprised 13.3% disagreed

with the statement. This implies that lack of sufficient capital restrict the smooth

growth of small scale businessin Katsina.

Table 11: Poor management of available resources restrict the prompt

development of small scale industry.

Responses Number Percentage (%)

Strongly agreed 41 54.7%

Strongly disagreed 21 28%

Disagreed 13 17.3%

42
 Total 75 100%

From the above Table, clearly show that 41 respondent which comprised

54.7% strongly agreed that poor management of available resources restrict the

prompt development of small scale businesswhile 21 respondent which comprised

28% strongly disagreed with the statement and 13 respondent which comprised

17.3% only disagreed with the statement. This implies that poor management of

available resource restrict the prompt development of small scale industry.

Table 12: Lack of creativity in business restrict the expansion of small scale
businessin Katsina.

Responses Number Percentage (%)

Agreed 67 89.3%

Disagreed 8 10.7%

Total 75 100%

From the above Table, clearly show that 67 respondent which consist 89.3%

agreed that lack of creativity in business restrict the expansion of small scale

businessin Katsina while 8 respondents which comprised 10.7% disagreed with the

43
statement. Therefore, the table show that lack of creativity in business restrict the

expansion of small scale businessin Katsina.

Table 13: The restriction of import goods increase the performance of small
scale businessin the state.

Responses Number Percentage (%)

Strongly agreed 59 78.7%

Strongly Disagreed 16 21.3%

Total 75 100%

From the above Table, clearly show that 59 respondents which comprised

78.7% strongly agreed that the restriction of import goods increase the

performance of small scale businessin the state while 16 respondents representing

21.3% strongly disagreed with the statement. This implies that restriction of import

goods increase the performance of small industry in the state.

Table 14: Import of goods and services restrict the prompt development of
small scale industry.
Responses Number Percentage (%)
44
 Strongly agreed 39 52%

Agreed 16 21.3%

Strongly disagreed 11 14.7%

Disagreed 9 12%

Total 75 100%

From the above Table, clearly show that 39 respondents which comprised

52% strongly agreed that the import of goods and services restrict the prompt

development of small scale businessin the state and 16 respondents represent

21.3% while 11 respondents which comprised 14.7% strongly disagreed and 9

respondent representing 12% also disagreed. This implies that import of goods and

services restrict the prompt development of small scale industry.

Table 15: Importation of goods and service introduces new product to the
market which lead to competition among small scale businesses.

Responses Number Percentage (%)

Strongly agreed 40 53.3%

Disagreed 35 46.7

45
 Total 75 100%

From the above Table, clearly show that 40 respondents which comprised

53.3% strongly agreed that the importation of goods and service introduces new

product to the market which lead to completion among small scale businesses

while 35 disagreed representing 46.7% with the statement which implies that

importation of goods and services introduces new product to the market which lead

to competition among small scale businesses.

4.2 SUMMARY OF FINDING

These concentrated on the result of the data that has been obtained in the

course of research. It reveals whether the finding from that data are consistent with

the already existing body knowledge or not.

The following are some of the findings from the analysis of data that small

scale businesses bring about economic development in local areas and by extension

the whole nation at large. Because in our finding the positive response about the

significant impact of small scale businesses in the development of the state.

46
 The majority of the respondents also believed that small scale businesshas a

very significant impact on the development of Katsina State through information

obtained from the respondents because positive response is higher than the

negative response.

It was also discovered that the majority of the people in Katsina State are

small business owners through the data obtained from difference respondents.

Small scale businessis also seen as a means of creating job opportunities in

the society because the majority of the respondent strongly agreed that small scale

businesscreate job opportunity.

Poor management of available resources also contributes to the set back of

small scale businessin the state through the adequate data or information obtained

from the respondents.

It was also discovered that lack of enough capital also constitute the

restriction of small scale businessin Katsina State.

Finally, it has been discovered from the study that the impact of small scale

businesses cannot be over emphasized in any setting because it create employment

opportunities by making people to be self employed, bringing development to

every sector of the economy and increase Gross Domestic Product (GDP).

47
48
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 SUMMARY

Based on the finding and inference drawn from the study, it has been

discovered that the local government area marketing environment, remains

favorable to small scale businesses. What is required is a minimum application of

the relevant small scale programmed in a well coordinated manner and at the

appropriate place. It was been discovered that small business are being confronted

by many problems or difficulties and challenges and this can be solved through the

application of technology which can bring about successful operation of small

scale businesses.

5.2 CONCLUSION

The impact of small scale businesses in socio-economic development of

rural areas contributes immensely to our national economy. In discussing the

importance of small scale businesses in local areas especially Katsina Local

Government, Katsina, certain points can be drawn such as provision of

employment, income generation for the government and development of local

market are what small scale businesses have contributed to Katsina development.

49
5.3 RECOMMENDATION

Based on the finding of the study, the following recommendations are made;

 Small scale businesses should be guided on management strategies of small

scale businesses which always lead to expansion of small scale businessin the
state.
 The local government should without delay assists unemployed youth
(graduated) by providing startup capital and incentive for establishment of
small scale businesses.
 Apart from the government loan, the commercial banks should serve as another
source of capital to small scale businesses.
 Small scale businesses should to be sensitive to market activities and trend at all
time especially positions of the competitors that are trying to gain entry and
control the market share.
 Small scale businesses should employ technological base instrument that will
ease their operation within the industries.

5.4 SUGGESTION FOR FURTHER STUDIES

Research should be carried out on the attitude of student toward small scale

industry. A way of ensuring a large scope for this study could be through the

involvement of a larger sample from other schools or institutions in Katsina State.

Due to limited time factor we suggest research should be conduct on the pros and

cons of small scale businesses in Katsina State at large.

50
REFERENCES

Abimaje, N. Y (2004), Essential of Small Scale Business Management, Lokoja:

Merit Printing and Publishing House.

Ajiebefun, I.A. (2003).Efficiency of Microenterprises in the Nigerian Economy.

AERC Research Paper 134, Nairobi, Kenya.

Ezeh, J. A. (2003), Fundamentals of Small Business Management, Enugu: Glamic

Ventures.

Alex Kocic (2017), Arts in international relations from the University of

Staffordshire. Office of Advocacy: Advocacy Small Business Statistic
Research.

Chris, S. A., (2000). Estimation of surface and top-of-atmosphere (TOA)

shortwave irradiance in biomass-burning regions during SCAR-B. J. Appl.
Meteorol, 39(10): 1742– 53.

Central Bank of Nigeria (2005): Guidelines for Accessing the Small and Medium
Industry Equity Investment Scheme, A Publication of the Bankers
Committee, Lagos.

Fabayo, J.A. (2009) Small and Medium Enterprises development strategy: A

critical Option for sustainable Long –Term Economic Development in
Nigeria. A paper presented at the first Annual International Conference on:
Effective Management of Small and Medium scale Enterprises for
sustainable Economic Development held at Abraham Adesanya Polytechnic,
Ijebu-Ode held from 25-27 August.

Kazmi, A. (2002). Business policy and strategic management (2nd ed.). New
Delhi: Tata McGraw-Hill.

51
Kolter P. (1980), "Market Challenger Strategies," in Thomas S. Dudick (ed.),
Handbook of Business Planning and Budgeting for Executives with Profit
Responsibility. NY: Van Nostrand Reinhold, pp. 66-70.
National Council on Industry (2002). Online with Emerging Policy on SME
Development. Makurdi, Benue State: 13th National Council Meeting.

Nwana, O.J. (1995): Financing Small Scale Business Under the New Central Bank
of Nigeria (CBN) Directives and its Likely Impact on Industrial Growth of
the Nigeria Economy, Bullion, Vol. 25, No. 3.

Okafor et al, (2002), “Entrepreneurship and national development: the Nigerian

experience”, Journal of Policy and Development Studies , Vol. 1 No. 1, pp.
2-3. [Google Scholar] [Infotrieve].

Osoba, J. A. (2003), modern Business Management and Practice, Akure: Glory

Printing and Publishing House.

Shoaib Khan, (2017), Marketing and Business Communication Materials. Micro-

Business Strategies:. Master of Accounting degree at the University of New
Mexico.

Sule, E. J. K. (2005), Small scale businesses in Nigeria! Concepts, Appraisals of

Government Policies and suggested solutions to identified problems,
Economic and Financial review 24 (4)

Watson, R.(2005). Marine foods sourced from farther as their use of global ocean
primary production increases. Nature communications 6, 7365 (2005).

Wolfenson, J.D.(2001) Comparing the performance of male and Female –

controlled businesses :relating output to inputs. Entreprenuership Theory
and Practice.26(3).Pp 91-100.

Zaina Dabo A. O (2005), Small Business, Entrepreneurship Development: Lokoja:

Merit Printing and Publishing House.

52
 APPENDIX (QUESTIONNAIRE)

Department of Business Education,

School of Vocational and Technical,
Federal College of Education,
P.M.B 2041
Katsina State.
Dear Respondent,

We are final year students of the above institution conducting a research

work on “Effect of Small Scale Business on the economic development in Nigeria

(A Case Study of Kaduna)”

You are kindly requested to assist in completing the questionnaire with a

sincere opinion. We assure you that the information collected will be treated us

confidential and use for the successful completion of this research study.

Instructions:

Please, fill the appropriate space provided.

PERSONAL DATA

(1) Sex of respondent

(a) Male ( )

(b) Female ( )

53
(2) Years of Business experiences

(a) 1 – 5 ( )

(b) 6 – 10 ( )

(c) 11 – 15 ( )

(3) Marital Status

(a) Single ( )

(b) Married ( )

QUESTIONNAIRE
S/ Statement Agree Disagreed Strongly Strongly
No d agreed disagreed

1. There is a significant
impact of small scale
businesses in the
development of Katsina
State.

2. Small scale businesses

established a linkage to
economic development of
the state.

3. Small scale businessis

means of survival to the

54
 people engaged in Katsina
State.

4. Small scale businesscreate

job opportunities in the
state.

5. Small scale
businesscontribute to the
development of rural
market in Katsina State.

6. The existence of small

scale businessin Katsina
State. reduce
unemployment rate.

7. Small scale
businessgenerate income
to the government of
Katsina State.

8. Lack of compliant of small

scale businessreduces the
rate of income generation
of the government.

9. The income generated

from small scale
businesscan be used to
55
 facilitate other special
project in the state.

10. Lack of sufficient capital

restrict the smooth growth
of small scale businessin
Katsina.

11. Poor management of

available resources restrict
the prompt development of
small scale industry.

12. Lack of creativity in

business restrict the
expansion of small scale
businessin Katsina.

13. The restriction of import

goods increase the
performance of small scale
businessin the state.

14. Import of goods and

services restrict the prompt
development of small scale
industry.

15. Importation of goods and

services introduces new
56
products to the market,
which lead to competition
among small scale
businesses.

57