AN EVALUATION OF THE CONTRIBUTION OF SMALL AND MEDIUMS SCALE ENTERPRISES (SMES) TO THE ECONOMIC DEVELOPMENT
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1.0 BACKGROUND OF THE STUDY
This study will have its fundamental root from the contribution of small and medium scale enterprises (SMSE) o the economic development in Nigeria.
Apart from the potential development of small and medium enterprise for ensuring a self reliant industrialization in terms of the ability to rely largely on local raw materials. It is also a good strategy to boost employment and guarantee an even distribution of industrial establishments in the country including the rural area.
In all countries of the world, small and medium enterprises have emerged as an important agent of economic and social transformation. The promotion of small and medium enterprises (SMES) is no longer just the business of the world association for small and medium enterprises (WASME) and other Non-Government organization (NGOS) but as become a major policy thrust in industrialized and developing countries.
In industrialized countries, recent innovation in information technology, industrialized designation and global competition have propelled the spread of small business and forced large cooperation to search for new strategies to gain competitive operations. Small and medium enterprises (SMSE) could help to facilitate mobilization of capital and human resources that could otherwise be left idle.
An important feature associated with small and medium enterprises which is particularly relevant to our current economic problems is that, these industries characteristically, depend less on imported inputs relative to their total capital investment than large scale industry. Small and medium enterprises (SMSE seek to diffuse economic power by helping to check imbalance seek to diffuse economic power by helping to check imbalance between various locality of a country and between different income groups in the same locality.
1.1 STATEMENT OF THE PROBLEM
As it could be observed, the contribution of small and medium scale enterprises (SMSE) towards the development of Nigeria economy has not been able to achieve the desired progress due mainly to a number of constraints.
This research work has identified the associated problems militating against the contribution of SMSE towards the development of the economy and thus, summarized them as follows:
- Understanding how much time it will tale to build a market.
- Inability to maintain customer relation.
- Wrong choice of product
- Failure to understand changing economic condition
- Failure to keep complete accurate records so that proprietor drifts solution trouble without realizing.
Given the fact that many factor militate against small and medium enterprise and constitute the development towards the nation economy.
1.2 OBJECTIVE OF THE STUDY
SMSE have been identified as a fundamental feature of the economy which can generate over 70% of economic activity as well as become the engine of growth required by the Nigerian government for the much needed sustainable development in terms of job and wealth creation.
- The aim of this project is to identify the contribution of SMSE to the economy development in Nigeria.
- To evaluate the various sources of finding SMSE including the special credit program and skill introduce the years in Nigeria.
- To highlight the major factors that have initiated against the effective contribution of SMSE in Nigeria economic development
- To examine the distribution of small and medium scale enterprises in Ilorin Metropolis.
- To suggest recommendation for the problem identified for future guidance.
1.3 RESEARCH QUESTION
Corollary to the above, therefore this work aims at answering the following research questions.
- Can small and medium enterprises be used as a strategy for economic development in Nigeria?
- To what extent can small and medium enterprises provide employment opportunities for the populace
- How can small and medium enterprises base mainly on the utilization of local resources for production alone?
- What are the effective sources of finance to small and medium enterprises in Nigeria?
- In what ways can small and medium enterprises lead to economic self-reliance in this country?
- How can other sources be found and properly managed?
1.4 SIGNIFICANCE OF THE STUDY
The study is tailored towards the education of policy makers in Nigeria on the importance of small and medium enterprises (SMSE) in the development of the economy which will in turn improve the standard of living of Nigerian citizens.
In developed countries, small and medium enterprises (SMSE) have remained the dynamic sector of the economy. The East Asia miracle was built on the foundation of throwing small and medium enterprises (SMSE).
Small and medium enterprises are widely seen as a panacea for unemployment and economic recession. Therefore, for the small and medium enterprises to serve the expected role of catalyst for rapid industrial and economic development there is need for more strategy for improved access to development finance for small and medium enterprises that would address the inability to provide collateral security for loan from normal credit institutions. Hence the relevance of this study which aims at other things examines further option for improving the flow of formal credit to small and medium enterprises (SMSE).