THE IMPACT OF SMALL AND MEDIUM SCALE ENTERPRISES ON EMPLOYMENT IN URBAN AREAS; PORT HARCOURT AS A CASE STUDY
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THE IMPACT OF SMALL AND MEDIUM
SCALE ENTERPRISES ON EMPLOYMENT
IN URBAN AREAS;
PORT HARCOURT AS A CASE STUDY
The research study was carried out in order to investigate the employment generation through small and medium scale enterprise a study of selected firms in Rivers State. It is to this research study focus on to assess the impact of small and medium scale enterprises on employment generation in Rivers State as small and medium scale was shown to be the engine house of the state economy. The research method in order to analyze the data a well programmed and structured questionnaire was adopted. This revealed that small and medium scale enterprise has contributed to the growth rate, increase in productivity of output, generated revenue to the government of Rivers State. We came to conclusion that small and medium scale enterprises have contributed positively to the state. Finally, we recommended that the government should provide adequate incentive such as loans, good roads, and regular power supply in order to promote the small and medium scale enterprises in Rivers State.
TABLE OF CONTENTS
Title Page i
Table of Contents vi
1.1 Background of the problem 1
1.2 Statement of the problem 4
1.3 Objectives of the study 5
1.4 Research questions 5
1.5 Hypothesis of the study 6
1.6 Significance of the study 6
1.7 Scope and limitation 6
1.8 Definition of terms 7
1.9 Organization of the study 8
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 10
2.1 Conceptual frame finance to small 10
2.2 Sources of finance to small scale enterprises 14
2.2.1 Personal source of finance 16
2.2.2 Non-institutional sources of financing 17
2.2.3 External institutional sources of financing 17
2.2.4 Loan from government agencies 18
2.3 Appraisal of government financing 20
2.4 Problem of financing small scale business 26
2.5 Impact of small scale business in rivers state 26
2.5.1 Productivity 26
2.5.2 Employment creation 27
2.5.3 Industrialization 28
2.5.4 Sources of inputs for other firms 29
2.5.5 Economic growth 30
3.0 Methodology 31
3.1 Research design 31
3.2 Research population 31
3.3 Secondary data 31
3.4 Primary data 32
3.5 Data analysis techniques 33
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 Introduction 35
4.1 Data presentation 35
4.2 Interpretation of data 38
CHAPTER FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION
5.1 Summary 40
5.2 Recommendations 41
5.3 Conclusion 43
1.1 BACKGROUND OF THE STUDY
In Rivers State and other part of the country, successive government have embarked of various development plans with hope that such plans will transform the states. One means of achieving this face is through its small and medium scale businesses. However, as employment opportunity are concerned, industrialization in Rivers State through small and medium scale business since it has been a slow pace in providing solution to the macroeconomic problem of unemployment.
Soniake (1989) made the succinct observation when he argued that because the industrial sector of Rivers State employed less than 10% of the total force in the state, the direct employment creation capabilities advice by the advocate of small and medium enterprises in Rivers State as the panacea of economic development has been put to doubt.
Based on the above analysis that industrialization has failed to provide, the needed economic development and coupled with the fact that the Rivers State has low productivity partly because of the behavioural attitude of the indigenes and people of Rivers State engaged in paid employment in (Ahiazu 1984). Jaja (2005) that a stance has been taken here, that there small scale industries can serve as a good instrument with which to accelerate the economic development in Rivers State. To provide the necessary focus on how small scale industries can serve the needed purpose, it is imperative to have to have a clear interpretation of the concept of small and medium enterprises.
The industrial document for Rivers State ministry of commerce, trade and industry referred to small scale businesses as investment of N100,000 to 2 million naira excluding cost of land but including working capital investment (Obitayo 2001). The term shall scale business depend on the criteria that has been used in making the assessment, nature of the business and size of the business. In the opinion of Ekhato (1999) of all the criteria for categorizing small and large scale businesses, the one that has been most frequently used is that sixe. The size centurion include number of employees, volume of sales, valve of assets, insurance in force and volume of deposits.
Jaja (2005) noted that of all the definition of small scale business found in literature, the one most appealing is the one offered by centre for management development, which identified as business whose ownership and control is usually vested in the same person, that the business usually have a small share of the market and that the chief executive generally participate actively in most level of the day-to-day decision making process.
It can be argued that a vehicle with which to accelerate the economic development of Rivers State is the promotion of small and medium scale business. This perhaps is because the sophistication and robustness of the members of society who appeared to have overshadowed the small scale industries. However, what most writers have hitherto done is principally focused on the entrepreneur vis-à-vis the economy. For instance, Kelby (1989) examined the development of entrepreneur in the bread industry from which he made useful suggestions on how entrepreneur who possess the necessary psychological make ups could harness available resources to improve their enterprises. Because his study was tailored to a particular industry, it does not provide sufficient room from generalization.
1.2 STATEMENT OF THE PROBLEM
At the root of all economic development in Rivers State is a small and medium scale business organization. The desire for the society to better their lot in the phase for self-fulfillment. If a society wishes to excel especially in Rivers State, the state must engage in activities that will high productivity, employment creation to the economic state of the society. Many indigenous organizations in Rivers State are comparatively small scale operators. It is a recognized fact that productivity is a critical factor in economic and social development for it determines the standard of living of its citizens no wonder the fourth national development plan (1981-1985). Makes it necessary for a state like Rivers State to be conscious of her productivity. Massive investment in industrialization will not produce the desired effect unless national productivity improves.
If the state must enjoy a high standard of living her productivity must show an appreciable increase. This has cause the Rivers State government to promote small and medium scale business in rivers state to enhance the productivity of output in the state and to boast the economy state of Rivers State. Increase in oil production from other sectors like the small and medium scale business, costs have risen dramatically, output has fallen, high rate of unemployment in Rivers State. To this effect, we examine and investigate the impact of small and medium scale business on employment creation in Rivers State.
1.3 OBJECTIVES OF THE STUDY
1. To examine the impact of small and medium scale enterprises on Rivers State economy.
2. To evaluate the impact of small scale industries in terms of employment and income.
1.4 RESEARCH QUESTIONS
1. To what extent has small scale enterprises impacted on Rivers State economy?
2. To what extent has small scale enterprises created employment opportunity and raised output/income in Rivers State?
1.5 HYPOTHESIS OF THE STUDY
There is no significance relationship between employment generation and small scale business operating in Rivers State.
1.6 SIGNIFICANCE OF THE STUDY
After a careful research study the research study will be significant to the government of rivers state, Nigeria and globally. The finding of the study would be beneficial to the industrial and prospective entrepreneur.
1.7 SCOPE AND LIMITATIONS
Several factors posed as a limitation to the efficacy of this project. Notable among them are time and financial constraints. The time constraint and limited resources at the disposal of the researcher limited the scope of the research to rivers state of Nigeria. Also, there was an unco-operation attitude of some of the selected small scale industries as regards the questionnaire given to them.
It was difficult to convince a large number of the respondent to fill and return the questionnaire administered due to fear that it might be one form of government assessment for taxation. Moreover, some could not even find records of some information required bureaucratic and administrative inefficiencies prevented us from getting adequate information from some government agencies. In any case, these limitations did not stop us from continuing with the project. They rather made us to modify our strategies and spurned us into putting greater efforts towards the successful completion of the project.
1.8 DEFINITION OF TERMS
Small-Scale Business: These are mainly one man business that are located and operated in Rivers State.
Small Scale Business Credit Scheme: These are programmes initiated at both federal and state levels, for the purpose of providing soft credit to small scale business enterprises.
Credit Default: This occurs when a borrower fails to meet up hi/her credit obligations.
Financing: The provision of money for the purpose of investment in a project.
1.9 ORGANIZATION OF THE STUDY
Chapter One: It focuses on introduction statement of problem, purpose of the study hypothesis, and definition of terms.
Chapter Two: This chapter focuses on literature review and theoretical framework.
Chapter Three: it focuses on research methodology, research design, sampling and population of the study, data analysis.
Chapter Four: This is on data presentation analysis and interpretation.
Chapter Five: Focus on summary of finding, conclusion and recommendations.