The gains and pains of small and medium-scale enterprises (SMEs): the way forward for entrepreneurship development in Nigeria (original) (raw)
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Small and Medium Enterprises (SMEs): Key to Socio-Economic Development of Nigeria
International Journal of Research and Innovation in Social Science (IJRISS) , 2021
In Nigeria, as in many other developing and emerging economies, Small and Medium Enterprises (SMEs) contribute to their socioeconomic development and growth hence, successive governments have invested resources in intervention programs aimed at stimulating the sector to achieve sustainable development. The main objectives of the study are to; review the role of SMEs to the socioeconomic development of Nigeria, identify current government efforts and challenges to stimulating SMEs performance especially as it relates to wealth creation and employment generation. The study found that; SMEs play a key role in socio economic development of the country especially in the area of employment generation and wealth creation. However, there are prevailing economic and political conditions that have not given room for SMEs to thrive, as evidenced in the internal and external challenging factors they are currently facing in the country despite the enormous government intervention initiatives. It is recommended that government should reform the implementation of these initiatives, ensure programmes continuity due to change on government, fight corruption and insecurity, improve on the business environment and evolve youth reorientation programme to cause them to embrace entrepreneurship. The methodology adopted for this work is narrative textual case study.
The study examined the impact of SMEs development on economic growth and development and also identified factors that contribute to the development of SMEs in Nigeria. Structured questionnaire was used to collect data from seventy (70) respondents in different sectors through judgemental method. The method of analysis is that of correlation coefficient and multiple regressions while the method of estimation is Ordinary Least Squares (OLS). The result revealed that SMEs development has significant impact on economic growth and development in term of poverty alleviation and employment generation. The study also indicated that access to finance is a major problem to SMEs development in Nigeria. The study concluded that SMEs development in Nigeria is an antidote to unemployment and poverty. Therefore, paper recommended that government should assist SMEs operators to have access to funds at lower rate of interest and reduce the importance attached to the collaterals and also federal government should provide enabling environment for the SME operators through provision of social amenities and reduction of excise duties.
Small and Medium Scale Enterprises (SMEs): A Catalyst in Promoting Economic Development in Nigeria
This research paper has specifically x-rayed the concept of Small and Medium Scale Enterprises (SMEs) and it was defined as a business which is owned, led by one or a few persons, with direct owner(s) influence in decision making, and having a relatively small share of the market and relatively low capital requirement. The contributions of SMEs to the economy were examined in this paper. The problems confronting SMEs and the possible strategies of combating the problems were also examined. A conceptual framework was developed by the authors and it explains/illustrates the series of variables that are integral in the area of SMEs and the effects it can possibly have on the economy. The concept of Economic Development was briefly described. A section was devoted to examining the roles of SMEs for economic Development in Nigeria. One of the major recommendations advanced in this paper was that the Government should urgently invest massively in improving the current infrastructural base in the country. 1.0. Introduction The national economy has remained a focal point in recent debates owing to the rising level of unemployment, poverty, insecurity, low productivity, human capital flight/brain drain. The need to advancing the socioeconomic , political and technological growth of any nation relies heavily on the creativity and technical ingenuity of the players/actors in that economy in transforming the available resources into productive use. It has been stressed by scholars that Small and Medium Scale Enterprises (SMEs) is a driving force in developing and developed nations alike. The emphases on SMEs remain a recurring decimal in the lexicon of Nigeria and this is not unconnected with the realization of the roles of SMEs in job creation, poverty alleviation and foreign exchange conservation (Jimah, 2011; Ikherehon, 2002; Akingunola, 2011). Agu (2001) defined SMEs as a business which is owned, led by one or a few persons, with direct owner(s) influence in decision making, and having a relatively small share of the market and relatively low capital requirement. The earliest manifestations of SMEs in advanced countries were coltage industries that later transformed into industrial complexes and tech factories. SMEs today account for the bulk of output in most countries today. It is also a proven job creator: the share of SMEs in global productivity is over 30% higher in some countries, but generally growing. In China, SMEs employ over 50% of the workforce while in the United States (US), SMEs account for over 50% of Gross Domestic Product (Ehinomen & Adeleke, 2012). In Nigeria, SMEs employ over 60% of the labour force both in formal and informal sectors. The need to have a regulatory body to control the activities of SMEs in the country led to the formation of Small and Medium Enterprises Development Agency of Nigeria (SMEDEN) in 2004 by an act of parliament towards the realization of the goals and objectives of SMEs. There is no doubt that SMEs play significant roles in the advancement and development of the economy. Some of these roles which have been briefly identified above remain integral to the progress of the nation. For these roles to be fully realized there is need for our educational system to fully be repositioned with the aim of accelerating the growth and development of SMEs. The establishment and management of SMEs no doubt have numerous implications on the economic development of the nation as documented by scholars in the field. The term Economic development has been defined by various scholars in different ways. According to Misra and Puri (2003), economic development means growth plus progressive changes in certain critical variables that determine the well-being of the people. They assert that there are qualitative dimensions in the development process which may be missing in the growth of a given economy expressed in terms of an increase in the national product or the product per capita. From the foregoing, it becomes obvious that economic development is far beyond the numerical growth in a nation's income which politicians often express to draw the attention of unsuspecting electorates. This growth or changes must cut across all the sectors of the economy and must be felt in the living standard of the citizens and this is what SMEs seeks to bring to reality.
The role play by Small and Medium Scale Enterprises (SMEs) in economic growth and sustainable development of any nation cannot be downsized. Nigeria, in particular, SMEs serves as the major employer of labour and represent about 95% of its enterprises, This statistic is a pointer to the expected contribution of this segment to the economy. This study discusses the nature of SMEs: Government and financial institutions supports in Nigeria. This study discovers that despite Government and financial institutions support towards SMEs in Nigeria, SMEs fall short of expectations that make the Nigerian economy unstable than what it is expected. Therefore, this study recommends that the SMEs entrepreneurs should re-strategize the ways there do carry out operations from as-usual to unusual. The Government should appoint
Small And Medium Scale Enterprises (SMEs) And Nigeria’s Economic Development
Mediterranean Journal of Social Sciences, 2014
In a developing country like Nigeria, there several socioeconomic conditions impeding meaningful development, despite many interventions and policy strategies. However, Small and Medium Scaled Enterprises (SMEs), if fully developed have been identified as being beneficial in alleviating poverty through wealth and job creation. This sector can benefit any government that develops it to the extent that it has the capacity to grow a country's GDP, generate taxes and other revenue, as well as assist in bringing stability in the polity of a country. The corporate world can also gain from the specialised goods and services of SMEs and the healthy market competitiveness it promotes, thus giving way for a strong private driven economic sector, with entrepreneurs springing up. In Nigeria, the prevailing economic and political conditions have not given room for SMEs to thrive, as evidenced in the challenges they are currently facing in the country. Despite these challenges, SMEs are associated with immense benefits which can be harnessed to better the Nigerian economy. This forms the subject of analysis in this paper.
Nurturing Small Businesses and Entrepreneurs in the South-East of Nigeria: Problems and Prospects
This study on developing a strategy and action plan for nurturing small businesses and entrepreneurs in the SouthEast of Nigeria is critical for generating a road map with which to encourage more local residents, especially young people, to consider entrepreneurship as a career option and to understand the importance of these firms for national economic prosperity. This would help to drastically reduce the rate of unemployment and crime in our society. The maximum variation sampling technique ensures that all the LGAs in the SouthEast as well with dimensions of interest are included in the samples collected was adopted. Data generated through questionnaire were analysed using percentage, chi-square and test of proportion statistical tools. The result of the study indicate that certain factors negatively affect the performance of SMEs significantly. These factors include poor electricity and water supply, lack of good road network, inability to access credit from the formal financial sector, inadequate supply of foreign exchange and raw materials. Other factors are unfavourable business environment which manifests in multiple taxation, bureaucratic bottlenecks, official corruption and high utility charges, all of which add up to constitute what is generally referred to as high cost of doing business in Nigeria. It was also found that the regulatory and policy environment of SMEs are bad. In particular, trade liberalization and globalization presents new challenges for SMEs. They have to contend with substitute products from their relatively more mature overseas counterparts who produce their goods under a friendlier environment. But despite all these challenges, the role of SMEs in developing indigenous entrepreneurship and creating employment opportunities in Nigeria cannot be overlooked. Though the operating environment has not been as expected, the sector has continued to be the engine of the development of the economy in one way or the other. It was recommended that for SMEs to contribute meaningfully to the growth and development of the economy, the problem of infrastructure must be dealt with decisively, especially in the area of electricity supply and provide conducive business environment by taking care of the infrastructural problem, running a tax regime that is devoid of multiple taxation, solving the problem of insecurity, dealing decisively with the issues of corrupt practices and eliminating all appearances of bureaucratic bottlenecks as well as making credit available at low interest rate.
AN EVALUATION OF THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMEs) DEVELOPMENT IN NIGERIA
A major challenge facing many developing countries, especially in Africa, is devising appropriate development strategies that will capture the financial services requirements of small and medium entrepreneurs who constitute about 70 percent of the population. The Federal Government of Nigeria considers this segment critical for its development efforts to be fully realized. The government has instituted various policies to achieve its aims, including a commercial bill financing scheme; regional commodity boards (later called national commodity boards); an export financing and rediscount facility (1987); the Nigerian Agricultural Cooperative and Rural Development Bank Ltd; Community Banks, People's Bank, the Agricultural Credit Guarantee Scheme Fund (ACGSF); and the Small and Medium enterprises Equity Investment Scheme among others. These policies have contributed to improving the livelihoods of farmers, small business men and entrepreneurs. Despite various government institutional policies and effort to develop small and medium enterprises in Nigeria, Small and medium enterprises has fallen short of expectations. This has bring about the questions whether SMES can bring about the much needed economic growth and development in Nigeria. This study looks at the various challenges and prospect of small and medium enterprises in Nigeria. The study was conducted in Federal capital territory, Abuja, North-central Nigeria with the use of questionnaire and interview to collect data that was statistically analyzed. The major factor that determined the level of SMEs growth is the people ability to be self employed and not because the business is easy to start up and manage. Inadequate funding, poor location, and lack of management skill has been the major factors militating against the performance of small and medium scale enterprises in Nigeria. In view of this, the study recommend that government agencies like SMEDAN and the rest should create awareness on how to run a small scale business effectively, good business policies, adequate infrastructural base as well as the provision of financial assistance or aid to upcoming entrepreneurs in order to increase their performance and boost employment generation in Nigeria.
Small and Medium Scale Enterprises (SMEs): A panacea for Economic Growth in Nigeria
2012
The emergence of small and medium scale enterprises (SMEs) is a major catalyst and a key success factor for the development, growth and sustenance of the Nigerian economy. Most government and business circles have come to recognize the importance of small and medium scale enterprises (SMEs) and have consequently agreed that their growth constitutes one of the corner stones of economic developmen., It is on the basis of this that the study of financing of small and medium scale enterprises (SMEs) in Amuwo Odofin Local Government of Lagos state is being embarked upon. The study also examines how government and other agencies finance SMEs in Amuwo Odofin Local Government area of Lagos State.. The study was guided by network theory. The major concern of the theory is the objective pattern of ties linking the agencies, individual and group of the society. The agencies in this study include banks, cooperative societies, and government, among others.Quatitative and qualitative method was u...
The paper discussed Issues, Challenges and Prospects of Small and Medium Scale Enterprises (SMEs) in Port-HarcourtCity, Nigeria. This was informed by the high rate of unemployment in the society and the poor performance of SMEs in employment generation. While the research questions addressed the extent to which poor financing, inadequate social infrastructures, lack of managerial skills and multiple taxation constitute major challenges in the performance of SMEs between October 2012 and November 2013, it assumes that government intervention through the provision of financial assistance, social infrastructures and favorable taxation policies will reverse the trend. The paper adopted a descriptive research design using 120 randomly selected registered operators of SMEs in Port-Harcourt City. Data collected were analyzed using descriptive statistics while formulated hypotheses were tested using z-test. Results from the data analysis indicated that poor financing, inadequate social infrastructures, lack of managerial skills and multiple taxation were major challenges confronting SMEs in Port-Harcourt City, thus recommended:provision of soft loans to SMEs operators, government guaranteeing of long-term loans to SMEs operators, establishment of SMEs funding agency, public/private sector partnership in infrastructural provision, capacity building for SMEs operators and provision of tax incentives for SMEs operators.
2015
Small and Medium Scale Enterprises (SMEs) play significant roles in providing employment opportunities, alleviating poverty, empowering communities, provision of goods and services, contributing toward the GDP, and achieving sustainable growth and development of the Nigerian economy. The aims of this research is to examine the effect of finance, infrastructure, and training on the performance of SMEs in Nigeria. This study used Kano State as a case study, and descriptive survey research design was used in this study. Sample size of 310 SMEs was drawn through simple random sampling out of the population of 1530 registered SMEs in Kano State, Nigeria. Primary data was employed in this study, and the data was collected through administering of close-ended structured questionnaires, but only 299 respondents respond to the questionnaires that were used for this study analysis. Statistical Package for Social Science (SPSS) software was used to analyze the respondent’s profile while Struct...