CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Small and medium scale enterprises (SMEs) have been generally

acknowledged as the bedrock of the industrial development of any country.

The small and medium scale business have been fully recognized by the

government and development experts as the main engine of economic

growth and a major factor in promoting private sector development and

partnership. The development of small and medium scale enterprises is

therefore an essential element in the growth strategy of most economics and

hold particular significance in Nigeria.

In Nigeria, evidence has shown that in 1986, small scale and medium scale

Industries accounted for 70% of all firms, employing millions of Nigerians

(first Bank of Nigeria report, 1987). By the end of 1979, over 80% of all

establishments licensed under the factory act were small and medium scale

Industries (Onwuala, 1987). This made the importance of this economic unit

to be unelectable.

1
Small scale and medium scale Industry in its widest sense implies the urgent

response to the challenges of developing countries, of which Nigeria is not

an exception. Small and medium scale Industries should be practiced with

due regards to the importance of available local raw materials in its environs

because the challenges facing small and medium scale Industrialist are

enormous.

The importance of small and medium scale Industries to the economic

development of any country, whether developing or developed, have been

widely acknowledged and acclaimed. They are considered as there stimulate

to private ownership and entrepreneurial skills, generate employment,

promote industrial dispersal and rural- urban migration.

Clive carpenter (2001), said that across the world, small businesses are

crucial for economic growth, poverty alleviation and wealth creation.

Uayatudeen (2001) said that across the world, small businesses have such a

crucial role to play in the development of an economy and that cannot be

ignored. According to William and David, most firms and small and

medium scale Industries are compared with companies that economist

2
usually study. But economists have concentrated on large scale Industries.

The leading textbooks in economics have title discussions on small and

medium scale business or entrepreneurs.

The partial combinations of small and medium scale Industries on the

Nigerian economy are; creation of wealth, poverty eradication and

employment generation as encapsulated in the national economic

empowerment development strategies (NEEDS).

Bolton (1971) describes a small and medium business as follows;

 In economics terms, a small and medium enterprise is one that has a

relatively small share of its market.

 It is managed by its owner or owners in a personalized way, and not

through the medium of a formalized management structure and

 It is independent in the sense that it does not form part of a larger

enterprises and that the owner or manager should be free from outside

control in taking their principal decisions.

3
1.2 Statement of the Problem

The study examines the impact of small and medium scale enterprises on the

economic development in Nigeria. The problems that brings about this study

are as follows:

i. Small and medium scale enterprises experiences difficulties in

raising equity capital from the finance houses or individuals. Even

when the finance houses agree to provide equity capital, the

conditions are always dreadful. All these result to inadequate

capital available to the sector and this lead to poor financing. The

problem that emanated from poor financing include:

 lack of competent management as they cannot afford the services

of the experts.

 Use of obsolete equipment and methods of production.

 Excessive competition which resulted from sales which is a

consequence of poor finance to cope with increased competition in

the industry.

4
 ii. Despite of the different measures to increase industrialization,

small and medium scale enterprises are not free from the following

conditions;

 The high cost of available raw materials

 The unavailability of infrastructural facilities e.g electricity, good

road, etc

 Multiplicity of policies and regulating measures such as removal of

fuel subsidy, taxes, several charges on loans.

1.3 Objective of the study

The main objective of this study seeks to examine the impact of small and

medium scale enterprises on the economic development in Nigeria. Other

specific objective includes:

i. To the impact of small and medium scale enterprises on the

economic development in Nigeria.

5
1.4 Research question

The study examines the impact of small and medium scale enterprises on the

economic development in Nigeria. Research questions include:

 What are the problems that hinder the growth and development of

small and medium enterprises?

 What is the impact of small and medium scale enterprises on the

economic development in Nigeria?

1.5 Research Hypothesis

The researcher formulated the following hypotheses:

Hoi; Small and medium scale enterprises do not have significant impact on

the gross domestic product in Nigeria.

1.6 Significance of the Study

This study will enable the small and medium scale enterprises the

knowledge to assist in the development and growth of Nigeria through

attacking all obstacles hindering the growth of small and medium scale

business such as:

6
  Incompetence or poor management

 Inability to pay debt

 Inexperience of owners (manager)

 Lack of proper feasibility study and inadequate preparation

 Capital constraints

 Excessiveness investment in stocks and Equipment

 Wrong project identification

 Inadequate proper accounting record keeping.

1.7 SCOPE OF THE STUDY

The scope of the study shall be limited to research topic “Impact of small

and medium scale enterprises on the economic development in Nigeria”. The

study employed a period of five years from 2018 to 2022.

1.8 Definition of terms

Economic Development is programs, policies or activities that seek to

improve the economic well-being and quality of life for a community.

7
Gross domestic product is a monetary measure of the market value of all

the final goods and services produced in a specific time period by a country

or countries. GDP is most often used by the government of a single country

to measure its economic health.

Small and medium-sized enterprises or small and medium-sized businesses

are businesses whose personnel and revenue numbers fall below certain

limits. The abbreviation "SME" is used by international organizations such

as the World Bank, the European Union, the United Nations, and the World

Trade Organization.

8
 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

This chapter presents the review of related literature base on the topic under

consideration. Theories and other empirical research will be reviewed in this

chapter.

2.2 Conceptual framework

2.2.1 Concept of Small and medium scale enterprises

The concept of small and medium-scale enterprises (SMEs) refers to

businesses that operate on a relatively smaller scale compared to large

corporations. These enterprises are characterized by their size,

organizational structure, and financial resources. While there is no

universally accepted definition of SMEs, various countries and organizations

have established their own criteria to categorize businesses into this sector.

9
One commonly used definition is provided by the European Commission,

which defines SMEs based on two main factors: the number of employees

and annual turnover or balance sheet total. According to the European

Commission's definition, a small enterprise typically has fewer than 50

employees, while a medium-sized enterprise has between 50 and 250

employees.

SMEs play a significant role in the global economy, contributing to job

creation, innovation, and economic growth. They are often considered the

backbone of many economies due to their ability to adapt quickly to

changing market conditions and their potential for entrepreneurship.

According to a report by the International Finance Corporation (IFC) (2009),

SMEs account for about 90% of all businesses worldwide and contribute to

more than 50% of employment. Additionally, they are responsible for a

substantial share of GDP in both developed and developing countries. The

IFC report highlights the importance of SMEs in poverty reduction, stating

that "SMEs are vital for economic growth, job creation, and poverty

reduction."

10
One of the key advantages of SMEs is their ability to foster innovation. Due

to their smaller size, they often have less bureaucracy and hierarchical

structures, which allows for faster decision-making and implementation of

new ideas. SMEs are often more flexible and adaptable compared to larger

corporations, enabling them to identify niche markets and develop

specialized products or services.

Despite their numerous benefits, SMEs face several challenges. These may

include limited access to financing, lack of managerial skills, difficulty in

attracting and retaining talented employees, and constraints in scaling up

operations. Governments, international organizations, and financial

institutions often provide support to SMEs through initiatives such as access

to credit, training programs, and business development services.

SMEs have a significant impact on economic development in Nigeria,

contributing to job creation, poverty reduction, and overall economic

growth. Several studies and reports have examined this relationship and

highlighted the importance of SMEs in the Nigerian context. Here are a few

key points to consider:

11
 Job Creation: SMEs are major contributors to employment

generation in Nigeria. They provide opportunities for self-

employment and create jobs for a significant portion of the workforce.

A study by Adebusuyi and Adediran (2019) found that SMEs in

Nigeria accounted for about 48% of total employment in the non-

agricultural sector.

 Poverty Reduction: SMEs play a crucial role in poverty reduction

efforts by providing income-generating activities and promoting

entrepreneurship. The Nigerian government has recognized the

potential of SMEs to alleviate poverty and has implemented various

policies and initiatives to support their growth.

 Economic Growth and Diversification: SMEs contribute to

economic growth by stimulating innovation, productivity, and

competition. They also contribute to economic diversification by

operating in various sectors, reducing dependence on a single

industry. A report by the Nigerian Association of Small and Medium

Enterprises (NASME) highlighted the positive impact of SMEs on

Nigeria's GDP growth and industrial development.

12
  Access to Finance: One of the key challenges faced by SMEs in

Nigeria is limited access to finance. Access to affordable and adequate

financing is crucial for SME development. Efforts are being made by

the government and financial institutions to enhance access to credit

and develop specialized financial products for SMEs.

 Policy and Regulatory Environment: The Nigerian government has

implemented policies and initiatives to support SME development,

including the establishment of specialized agencies, provision of

incentives, and simplification of registration and licensing processes.

However, there are still areas where improvements can be made, such

as reducing bureaucratic hurdles and addressing infrastructure gaps.

2.2.2 Concept of economic development

The concept of economic development refers to a process aimed at

improving the economic conditions and well-being of a society over time. It

involves the sustained growth of key economic indicators, such as income

levels, productivity, employment opportunities, infrastructure, and

technological advancements, among others. Economic development seeks to

13
enhance the standard of living, reduce poverty, and create a foundation for

long-term prosperity.

Key elements and dimensions of the concept of economic development

include:

 Economic Growth: Economic development often involves sustained

economic growth, which refers to the increase in real GDP (Gross

Domestic Product) over time. Economic growth is typically measured

by the rate of change in output, indicating the expansion of an

economy's production capacity.

 Poverty Alleviation: A crucial objective of economic development is

to reduce poverty levels and enhance the welfare of individuals and

communities. This involves initiatives to provide access to basic

necessities, such as food, clean water, healthcare, education, and

housing.

 Human Capital Development: Economic development recognizes

the importance of investing in human capital, which refers to the

skills, knowledge, and capabilities of individuals. Enhancing human

14
 capital through education, vocational training, and healthcare enables

individuals to contribute more effectively to economic activities and

promotes long-term development.

 Infrastructure Development: Adequate infrastructure, including

transportation networks, energy systems, communication facilities,

and public services, is essential for economic development.

Infrastructure development improves productivity, facilitates trade,

attracts investments, and enhances the overall functioning of an

economy.

 Technological Advancement: Technological progress plays a critical

role in economic development. The adoption and development of new

technologies drive innovation, productivity growth, and efficiency

gains in various sectors of the economy, leading to higher living

standards and economic prosperity.

 Institutional Framework: A supportive institutional environment is

crucial for economic development. This includes well-functioning

legal systems, property rights protection, transparent governance

15
 structures, and effective regulations. Institutions provide the necessary

framework for economic activities, investment, and entrepreneurship.

 Environmental Sustainability: Economic development must

consider environmental sustainability to ensure the long-term well-

being of societies. Strategies that promote sustainable resource

management, reduce pollution and waste, and mitigate climate change

impacts are essential components of sustainable economic

development.

 Inclusive Growth: Economic development should aim for inclusive

growth, ensuring that the benefits of economic progress are widely

shared across different segments of society. This involves reducing

income inequalities, addressing social disparities, promoting equal

opportunities, and empowering marginalized groups.

2.3 Empirical Review

Ogujiuba, Ohuche and Adenuga (2004) looked into credit availability to

small and medium scale enterprises in Nigeria.. The paper showed that the

capitals vital for the response of bank lending to economic shocks and

16
emphasize the need for a sound and efficient financial sector to support

small and medium scale enterprise.

Dada (2014) did an empirical review of commercial banks’ credit and the

development of small and medium scale enterprises in Nigeria between 1992

and 2011.The estimated models shows that commercial banks to small and

medium scale enterprises exert a positive influence on small and medium

scale enterprise development, which was by wholesales and retailed trade

output as a components of Gross Domestic Product, while exchange rate and

interest rate revealed negatives effects on small and medium scale

enterprises development. The study suggested among others that adequate

savings should be mobilized from the public and that government should

persuade banks to lend to small and medium scale enterprise by providing

guarantee, interest rate concession and other incentives.

Imoughele and Ismaila (2013) investigated the impact of commercial bank

credit accessibility on sectoral output growth in Nigeria, covering the period

2011-2018. The result of the study revealed that commercial bank has a long

run relationship with sectoral output growth in Nigeria. While appraising the

17
growth effect of small and medium scale enterprises financing in Nigeria,

Afolabi (2013) in estimating the multiple regression model. The result

indicated that small and medium scale enterprises output has positive

influence on economic development while lending rate is found to exert

negative effect on real gross domestic product, a proxy for economic growth.

A related study by Nwosa and Oseni (2013) sought to empirically ascertain

the impact of bank advances to small and medium scale enterprises on

manufacturing output in Nigeria 1992-2010. The study found that banks and

advances to the small and medium scale enterprises sector had significant

positive impact on manufacturing output both in long-run and short-run.

Akinguola (2011), in this paper, explored the relationship between small and

medium scale enterprises financing and growth in Nigeria. The paper

proposed that accessibility to low interest rate should be provided in other to

enhance the growth in Nigeria economy. Examining the relationship

between commercial bank credit indicators and rural economic growth in

Nigeria, Tajudeen (2012) study shows that the rural economic growth is co-

integrated with commercial bank credit indicators in Nigeria. The study also

confirmed positive relationship between rural economic growth and

18
commercial banks rural loans between commercial banks loan to agriculture

and rural economic growth.

Ojong, Arikpo and Ogar (2015) investigated the role of deposit money

banks on the growth of small and medium scale enterprises in Nigeria. The

results revealed that bank credit had a significant relationship with the

growth of small and medium scale enterprises. Multiple taxations and

government policies were found to have a significant relationship effect on

small and medium scale enterprises growth. The authors suggested deposit

money banks should be encouraged to increase the volume of loan able

funds to small and medium scale enterprises, while elimination of multiple

taxations, reduction in corporate taxes and the strengthening of government

policy frame work were recommended.

Safiyaay and Garba (2013) examined the role of commercial banks in

enhancing the growth small and medium scale enterprises in Nigeria. It was

discovered that commercial banks contribute to financing small and medium

scale enterprises though their contribution has declined considerably as the

government through Central Bank of Nigeria directives brought to an end

19
the mandatory banks credit allocations. The paper hence recommended that

commercial banks should often on its stringent requirements so that small

and medium scale enterprises can benefit maximally from loan advances as

large companies do.

2.4 Theoretical framework

2.4.1 Stakeholder theory

This theory is a management and business ethics framework that emphasizes

the consideration of the interests and relationships of various stakeholders in

decision-making processes. It suggests that organizations should not only

focus on maximizing shareholder value but also take into account the needs,

concerns, and interests of other individuals and groups who have a stake in

or are affected by their operations.

One prominent scholar associated with stakeholder theory is R. Edward

Freeman. In his book "Strategic Management: A Stakeholder Approach"

(1984), Freeman introduced the concept of stakeholders as "any group or

individual who can affect or is affected by the achievement of an

organization's objectives." He argued that businesses should expand their

20
perspective beyond just shareholders and consider the wider range of

stakeholders, such as employees, customers, suppliers, local communities,

and even the natural environment.

2.4.2 Modernization theory

Modernization Theory posits that societies progress through stages of

development as they adopt Western values, institutions, and technologies.

Rostow, W. W. (1960). "The stages of economic growth: A non-communist

manifesto." Cambridge University Press.

In this influential work, Rostow presents a linear model of economic

development, suggesting that societies evolve through five stages: traditional

society, preconditions for take-off, take-off, drive to maturity, and the age of

high mass consumption. He emphasizes the role of investment,

technological progress, and industrialization as drivers of economic

development.

21
Lerner, D. (1958). "The passing of traditional society: Modernizing the

Middle East." Free Press.

Lerner's work focuses on the modernization process in the Middle East. He

explores the impact of modern media, education, and communication on

social and political change. Lerner argues that modernization leads to

societal transformation, including increased literacy, urbanization, and the

spread of democratic values.

McClelland, D. C. (1961). "The achieving society." Van Nostrand.

McClelland's work examines the psychological aspects of economic

development. He suggests that individual achievement motivation and

entrepreneurial spirit are crucial for economic progress. McClelland

highlights the importance of cultivating a culture of achievement and

fostering an entrepreneurial mindset to drive economic development.

22
2.4.3 Dependency Theory:

Dependency theory argues that underdeveloped countries are structurally

dependent on developed countries, resulting in unequal power relations and

hindered development. It highlights the negative impacts of international

trade and capital flows on developing nations.

2.5 Summary of the chapter

Small and medium-scale enterprises (SMEs) are an essential part of the

global economy, contributing to employment, innovation, and economic

growth. They play a vital role in fostering entrepreneurship and are often

more agile and adaptable compared to larger corporations. However, they

also face various challenges that require targeted support and initiatives to

enable their growth and success. Economic development encompasses a

comprehensive approach to improve economic conditions, promote social

well-being, and achieve sustainable growth. It recognizes the

interdependence of various factors and dimensions and strives to create an

enabling environment for long-term prosperity and the overall betterment of

societies.

23
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter present the method adopted by the researcher in obtaining data.

It also presents the population and the sample size adopted in this study.

3.2 Research design

The study is on the impact of small and medium scale enterprises on the

Nigeria Economic development. The researcher adopted a descriptive

research design for the period under consideration. Descriptive research

design is a powerful tool used by scientists and researchers to gather

information about a particular group or phenomenon. This type of research

provides a detailed and accurate picture of the characteristics and behaviors

of a particular population or subject

3.3 Population and sampling

The population of the study consists of 10 small and medium scale

enterprises; a sample of 7 small and medium scale enterprises is taken using

simple random sampling method for the study period of five years from

2018 to 2022.

24
3.4 Sources and method of data collection

The researcher adopted the secondary source of data collection which was

obtained from the Central Bank of Nigeria statistical bulletin. The data

obtained include Real Gross Domestic Product (RGNP), continuous

contribution of small scale enterprise.

3.5 Techniques of data analysis

This study employed simple regression in evaluating the effect of Small and

Medium scale enterprise on the growth of Nigeria economy. This study

adopted and modifies the model employed by Khan (2012).

3.5.1 Model Specification

The choice of this kind of model is based on its property of BLUE (Best

Linear Unbiased Estimate).

The model is implicitly specified as follows;

GDP = f(GSMEs)…… …………………………….…………(1)

The model is explicitly specified thus

ᵦ ᵦ
GDPt = 0+ 1GSMEs + ɛt…………………………………………. (2)

Where:

25
GDP = Gross Domestic Product

GSMEs = Growth of Small and Medium Scale Enterprises

ᵦ0= Constant or the intercept

ɛt = Stochastic error term

3.6 Justification of the data analysis techniques

The macroeconomic variables Real Gross Domestic Product (RGDP) and

small scale enterprise. The first step involves testing the order of integration

of the individual series under consideration. Researchers have developed

several procedures for the test of the order of integration. The most popular

ones are Augmented Dickey Fuller test (ADF) due to Dickey and Fuller

(1979, 1981), and the Phillip-Perron (PP) due to Phillips (1987) and Phillips

and Perron (1988). Augmented Dickey Fuller test (ADF) relies on rejecting

a null hypothesis of unit root (the series are non-stationary) in favour of the

alternate hypothesis of stationary. For the purpose of this study we will ADF

in testing for the order of integration of the individual variables under study.

26
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Introduction

This chapter presents the data presentation. In this chapter also, the obtained

data will be analyzed and the formulated hypotheses will be tested in this

chapter as well.

4.2 Data Presentation

YEAR SMEs GDP

2018 659,153.70 62,980,397.21

2019 710,555.10 71,713,935.05

2020 802,683.50 80,092,563.38

2021 802,964.60 89,043,615.26

2022 635,352.00 81,022,130.00

Source: author’s computation

27
4.3 Data analysis

This section presents various findings drawn from the study.

GDP SMEs
Mean 20133.50 3464.831
Median 4588.990 859.8318
Maximum 94144.96 18028.90
Minimum 144.8300 12.49394
Std. Dev. 28608.18 5060.069
Skewness 1.398183 1.504782
Kurtosis 3.630695 4.122697
Jarque-Bera 11.98377 15.04697
Probability 0.002499 0.000540
Sum 704672.3 121269.1
Sum Sq. Dev.2.78E+10 8.71E+08
Observations 35 35

Source: Author’s computation

The table above shows the result for the descriptive statistics of the variable.

The mean value Real Gross Domestic Product (RGDP) is 20133.50 for the

Small Business (SMEs) is 3464.831.

Skewness: The variables show positive values for skewness and this implies

that the variables are skewed to the right. These indicate that the variables

are normally distributed.

28
Kurtosis: Is a measure of peakedness of the variables has the following

3.630695 for the Real Gross Domestic Product (RGDP) and it has 4.122697

for the Small Business (SMEs).

Jarque-Bera which is also measure of normal distribution given the

corresponding P–Values, we accept the Null hypothesis of normal

distribution for all the variables.

Unit root result for GDP
Exogenous: Constant

t-Statistic Prob.*
Augmented Dickey-Fuller test statistic -3.078419 0.0381
Test critical values: 1% level -3.646342
5% level -2.954021
10% level -2.615817

Source: author’s computation

The above results shows that t-statistic has a value of -3.706932, which in

absolute term is greater than the test critical values at 1%, 5% and 10%

respectively with a probability by significant value of 0.0086. This implies

that the variable are station any after first difference and it is significant at

1%, 5% and 10% respectively. We therefore reject the (Ho) null Hypothesis

that SMES has a unit root. The result also further emphasis that the seen is

29
free being spurious and this was confirmed by Durbin-Watson 2.025492

which is greater than the R2value of 0.307129.

Regression analysis
Dependent Variable: LNREAL_GDP
Method: Least Squares
Date: 05/31/19 Time: 18:48
Sample: 1981 2023
Included observations: 35

Variable Coefficient Std. Error t-Statistic Prob.

C 2.464374 0.068653 35.89597 0.0000
SMEs 0.915517 0.010125 90.41868 0.0000
R-squared 0.995980 Mean dependent var 8.268007
Adjusted R-squared 0.995858 S.D. dependent var 2.239233
S.E. of regression 0.144114 Akaike info criterion -0.980980
Sum squared resid 0.685371 Schwarz criterion -0.892103
Log likelihood 19.16715 Hannan-Quinn criter. -0.950300
F-statistic 8175.537 Durbin-Watson stat 0.364600
Prob(F-statistic) 0.000000

The Simple regression analysis was carried out to examine or ascertain the

magnitudes of small business enterprises on economy development. The

result above shows that the dependent variable economic development is

explained by the explanatory variable small business enterprises as

contribution by 99% over the period under review. That is R2=0.99 (99%).

Put differently, 99% variation in GDP is accounted for by small business.

The regression equation can therefore be stated as:

Y= 2.4644 + 0.9155(X).

30
Where:

Y= Estimated Gross Domestic Product

X= Different values of contributions of small scale business to economic

growth and development.

The regressions above also show that there is a significant relationship

between small scale business and economic development, evident by t-

Statistics and probability value. Less than 5%

4.4 Test of hypotheses

From the findings in the regression analysis table, the null hypothesis in

chapter one which state that small and medium scale enterprises do not have

significant impact on economic development is rejected and the alternative

hypothesis accepted, Since the t-Statistics and probability value is 0.000

which is Less than 5% and the coefficient value is 0.915517. This shows a

positive significant value between SMEs and GDP in Nigeria.

4.5 Discussion of findings

The study shows that the small and medium scale enterprise has a positive

significant impact on the gross domestic product in Nigeria. The higher the

establishment of small businesses the higher the GDP of a nation. Therefore,

31
the researcher encourages the establishment and the support of new smaller

enterprises. By this the rate of unemployment will be reduce and the

standard of living of the Nigerian Citizens will improve.

32
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

Small and medium scale enterprises play a significant role in the global

economic by contributing to jobs creation, innovation and economic growth.

The study examines the effect of small and medium scale enterprises on the

economic development in Nigeria. The period of the study is from 2018 to

2022. Conceptual and empirical review of related literature was adopted at

the course of the study, theories such as stakeholder’s theory, modernization

theory and dependency theory was adopted at the course of the study. The

study adopted the descriptive research design, secondary data source were

adopted which was obtained from CBN statistical bulletin. From the

findings in the regression analysis in chapter four, the study found that small

and medium scale enterprises has a positive significant effect on economic

development. Government should encourage the establishment of new

businesses in order to reduce the rate of unemployment.

33
5.2 Conclusion

There is no doubt that small scale enterprises are essential for rapid and

sustained economy growth and development because they create

employment, enhance capacity building for manpower and skills

development, promote growth, reduce poverty, and facilitate industrial

development among others. Several efforts had been made by successive

governments to promote human and materials resources. These efforts have

made small and medium scale businesses to contribute significantly to the

development of Nigeria economy.

In spite of government policies aimed at providing financial and technical

support for the promotion of small business enterprises in Nigeria, they have

performed less satisfactorily largely because of operational bottlenecks

including lack of depth of the financial system, inadequate infrastructural

facilities, poor management practices and low entrepreneurial skills to

mention but a few. Banks which are supposed to provide adequate credit

facilities in compliance to government policies usually place exorbitant

interest rate alongside huge collateral securities that scare away investors.

34
Despite all these bottlenecks, small scale businesses have contributed

significantly to economic, social and development of the country.

5.3 Recommendations

Governments should assist prospective entrepreneurs to have access to

finance and necessary information relating to business opportunities, modern

technology, raw materials, market, plants and machinery which would

enable them to reduce their operating costs and be more efficient to meet the

market competitions.

It is also recommended that there is need for supporting and strengthening

small and medium scale enterprises productive capacities and market

competitiveness in the country.

Small and medium scale enterprises owners as a matter of necessity should

take insurance policies for their businesses as this may not only help to

protect them against uncontrollable risks, but will help to bring them back to

their positions whenever they suffer losses, remain profitable and continue to

operate in perpetuity, at the same time contributing to the economic growth

of the nation.

35
Prospective business operators should conduct extensive feasibility studies,

to evaluate the viability of any proposed business, and to avoid investment

in unprofitable ventures. Governments should encourage and continue to

build on current programmes and establish new ones if warranted, to

improve the levels of managerial competence and skills of the small

business owners.

5.4 Limitation of the study

The study is limited to the period of five years from 2018 to 2022. Due to

the limited resources other aspect of this research was not explored. The

research is limited to primary data source with a sample six.

Due to limited time, the researcher was not able to reach out to some areas,

organizations and individuals in other to obtain adequate data.

Due to financial constraint coupled with the high rate of transportation, the

researcher was not able to reach out to some areas in other to obtain

adequate data for the research purpose.

36
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Ogbo, A and Agbu C.N. (2012). The Role of Entrepreneurship in economic

development: Nigeria perspective.

Beck, T. and Cull, R. (2014). SME finance in Africa. Journal of African

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