An Appraisal Of Performance Of Small Scale Enterprises In Community Development

An Appraisal Of Performance Of Small Scale Enterprises In Community Development

Abstract

This study examines an appraisal of performance of small scale enterprises in community development; substantiation from Anambra south senatorial zone, Anambra state. Specifically the study provides the reasons for going into SMEs; sources of backing SMEs; part of SMEs in community development and factors militating against SMEs in community development. The experimenters distributed 143 questionnaires to the repliers that make up the sample size. The exploration questions were answered using mean standing under the modified four- point likertscale.Result of the disquisition reveals that SMEs play the following part in community development Generation of employment; Service provision; Ameliorate living norms and poverty relief. Accordingly this study thus recommends that government shouldre-introduce the small business credit scheme so that heirs can use them to run the micro, small and medium enterprises; government, chamber of commerce and othernon-governmental association should regularly organize forums for implicit and factual small and medium enterprise drivers where they should be educated on how to plan, organize, direct and control their businesses there should also be are-introduction of soft loans for small and medium business by the government and fiscal institution to enhance the performance of SMEsin community development.

Chapter One

Preface

Background Of The Study

SMEs have been discovered to be a crucial motorist for a country’s profitable growth( Schmiemann, 2009) hence, SMEs can not be overlooked in the profitable development of any country. Okongwu( 2001) argues that SMEs are honored as the main source of profitable growth and a major factor in promoting private sector development and cooperation, in developed and developing countries. SMEs help to produce employment and are frequently seen as veritably important for the growth and invention of dynamic husbandry( Mutula and Brakel, 2006). thus, profitable growth and development in Africa can be achieved through the emergence of strong SMEs, which will latterly grow to come major players in the developing frugality. SMEs help to diversify profitable conditioning that have significant benefactions to significances and exports, they’re flexible and can acclimatize snappily to changing request demands( Ongori, 2009). therefore, SMEs contribute further and further to the public and transnational husbandry of the world.

According to Wattanapruttipaisan( 2003), the significance of SMEs for growth, productivity and competitiveness of the husbandry in both developed and developing countries is conceded widely, since SMEs bring about substantial original capital conformation, contribute to bettered living norms and achieve high situations of productivity. SMEs are linked as a major means of achieving indifferent and sustainable artificial diversification.

The benefactions of SMEs to Nigeria’s frugality aren’t contestable as about 10 of the total manufacturing affair and 70 of the artificial employment are by SMEs( Aina, 2007). Through the application of original coffers, SMEs promote artificial and profitable development and are responsible for the product of intermediate goods and the metamorphosis of pastoral technology( Aina, 2007). Nigerian SMEs not only give employment and income for maturity of its citizens but are also honored as the parentage ground for domestic entrepreneurial capabilities, specialized chops, technological ingeniousness and directorial capabilities for private sector development( SMEDAN, 2005, Aina, 2007).

The backing of SMEs to any frugality are egregious, as SMEs are known to contribute to the development of several husbandry in terms of affair of goods and services and creation of jobs at fairly low capital cost( Apulu and Latham, 2010). SMEs also ameliorate forward and backward liaison between economically, socially and geographically different sectors of numerous husbandry( SMEDAN, 2005). therefore, the development of SMEs is an essential element in the growth strategy of numerous husbandry including Nigeria.

Statement of The Problem

The crucial problem facing most small scale enterprises is lack of finance whether for the establishment of new diligence or to carry out expansion plans. The incapability to attract fiscal credit or coffers has hindered or stifled the growth of small scale enterprise. The reasons for the lack of fund include the entourages

High rate of affectation that led to the vast deprecation of Naira exchange rate, therefore making it delicate for utmost Small Scale enterprise to gain needed inputs for expansion.

Low position of savings in the frugality, which leads to low capital conformation.

High rate of interest charged on loans, which scares off implicit Small Scale enterprise.

The reluctance of retail banks to grant credit to Small Scale enterprise because of the low creditworthiness of these enterprises has also hampered their growth over the times.

Bothered by the patient decline in the performance of the artificial sector and with the consummation of the fact that the small and medium scale enterprises hold the key to the reanimation of the manufacturing sector and the frugality, the Central Bank of Nigeria successfully converted the Bankers ’ Committee in 2000 to agree that each bank should set away 10 percent of its periodicpre-tax profit for equity investment in small and medium scale enterprises. To insure the effectiveness of the programme, banks were anticipated to identify, guide and nurture enterprises to be financed by the scheme. The conditioning targeted under the scheme included agro-allied, information technology, telecommunications, manufacturing, educational establishments, services, tourism and rest, solid minerals and construction. The scheme was formally launched in August 2001. As at end- December 2009, the accretive sum set away by banks was N42.2 billion. The sum of N28.2 billion or67.1 per cent of the sum set away had been invested( CBN, 2009). But the fact still remains that with these vittles made are in utmost cases not accessible to the Small Scale diligence.

The main thrust of this study is to estimate the performance of small and medium scale enterprises in community development with specific attention from Anambra South Senatorial zone, Anambra State.

Ideal of The Study

The specific objects of this study is

1 To determine the sources of backing SMEs from the repliers;

2 To ascertain the part of SMEs in community development; and

3 To identify factors militating against SMEs in community development.

Exploration Questions

This study was guided by the following exploration questions

1 To what extent do small scale enterprise contribute to towards profitable development of a community?

2 What are the problems encountered by the small scale enterprise in sourcing for finances?

Exploration Thesis

The following null thesis was given for this study

i Ho Small Scale enterprise don’t contributes immensely towards profitable development of a community.

Hi Small Scale enterprise contributes immensely towards profitable development of a community.

ii Ho Small scale enterprises don’t encountered problems in source for finances.

Hi Small scale enterprises encountered problems in source for finances.

Organization Of The Study

This paper is divided into five sections. Following the background, section II reviews related literature on the content. Section III set out the exploration methodology, while Section IV presents and analyses the empirical results. Section V rounds it up with the conclusion and recommendations.

Significance of the Study

Small- Scale Enterprises in Africa calculate largely on own savings, not only to grow but also to introduce, enterprises frequently need real services support and formal finance backing. This study will be of benefit to the drivers of the Small and Medium Enterprise, the government, and the general public on the possible backing options and survival strategies available to the Small and Medium Scale enterprise and give the possible means of penetrating them.