CHAPTER ONE INTRODUCTION 1.0 BACKGROUND OF THE STUDY · “any business concerned whose total project cost does not exceed ₦300,000.00 only. In the context of Nigeria economy, the

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CHAPTER ONE

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

According to a United States of America agency called the small scale

business in one that is independently owned and operated for profit

and it is not dominant in its area. For example, a trading business

can be considered “small” if the number of employee is less than two

and its revenue is more than one million naira.

such operation is always small and limited in scope the same

applies to a manufacturing retailing service business which can be

classified a small is the level of capital invest and labour requirement

are limited to small proportion of the total market supply of the

product. Other small enterprises use various contribution of these

and other factors to categories a business set up. nevertheless in

most discussion and writing on the subject it is always agreed that

small scale business is one in which the general and functional

management is in the land, of or almost two or three people who

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also make all the important decision in that business among the

various definition small scale business is a firm that is independent

owned and operated in the general, we should recognize that a

small scale business often have few employee, limited capital

investment and low scales. The definition varies from countries

industries, to industry. The Federal Ministry of industry define small

scale business as that with a total cost not exceeding ₦500,000.00

only excluding cost of land while the world bank defined same as

“any business concerned whose total project cost does not exceed

₦300,000.00 only.

In the context of Nigeria economy, the center for management

development (C.M.D) gave the following definitions, a small scale

business in the policy proposal was submitted to the Federal

Government in June 1992. Small scale industry could be

manufacturing process or service industry involve in factory

production type of operation employing up to 509 full time workers

investment in land and machinery but excluding and building shall

exceed ₦500,00.00 power and business can go long way to alleviate

the unemployment figure in Nigeria today.

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Interest in the development of small and medium sized enterprise

(SMEs) and their contribution in the development process continue to

be in the forefront of policy debate in developing countries the

advantages claimed for SMEs are various including the

encouragement of entrepreneurship the greater like hood that SMEs

will utilize labour intensive technologies and thus have an immediate

impact on employment, generation. they can usually be established

rapidly and put into operation to produce quick return SME

development can encourage the process of both inter – and intra-

regional decentralization and they may well become a countervailing

force against the economic power at large enterprises, more

generally the development of SMEs is seen as accelerating the

achievement of wider economic and socio economic objective

including poverty alleviation.

Staley and Mersey (1965) identify a developmental approach to SME

promotion which has as its objective the creation of economically

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viable enterprises which can stand on their own feet without

perpetual subsidy and can make a positive contribution to growth of

real income and thereafter to better living level. This approach

emphasis the importance of efficiency in new SMEs small provides

must be encouraged to adopt new method move into new lines of

production and in the long-run wherever feasible they should be

encouraged to become medium or even large scale production and

whenever necessary a lot of things have to be done to improve the

performance of small business after the discovery of small lapse

through the entail process used in the organization.

1.2 STATEMENT OF THE PROBLEM

Not much of deducting a research study is more un-nerving to the

research study on the effect of small scale business on poverty

Nigeria development as a curriculum of study which little attaining

has been to over the year by researcher.

However, focus is now directed on this aspect by cotemporary

academic, scholars and economic our society has great effect on our

business. No society is statistic every year the involvement of

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government is business growing its interest (privatizing) and making

the society more business friends smaller and smaller government is

either diversity its interest. (Privatizing) or making the workers force,

all thoserefers programmes put a lot of ensure on the small business.

This passes as challenges which hold way, and cannot be neither

over estimated nor under estimated.

1.3 OBJECTIVE OF THE STUDY

the main purpose is to identify and consequently analyze the most

effective and efficient way through which small scale business could

be financed and promote thereby taking into consideration various

condition such as economic, political, social, psychological etc. under

which small scale business are encouraged to operate will particular

reference to the eagle supermarket Kubwa Abuja in so doing, the

researcher intends giving an in-depth information and analyses on

the various strategies through which small scale business can be

developed and encouraged. In view of the above, the researcher

intends to find out the following.

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i. Government towards promotion and development of small scale

enterprises in Nigeria.

ii. To identify the economic potential; of small scale enterprises in

the eagle supermarket Kubwa Abuja.

iii. To identify the constraints confronting the development of

small scale enterprises in the eagle supermarket Kubwa Abuja.

iv. To examine the financial support given SMEs in Nigeria.

1.4 SIGNIFICANCE OF THE STUDY

It is helped that at the end of the researcher both small scale

business owner, these who are interested on getting into the

business and government of small scale business in Nigeria and

then known how to put the business to its pack and prevent it

failure. it will improve on their managerial style from the suggestion

and recommendation made available in thus study, the researcher

believes that it will help in changing the lack of management style to

owners and lack of patronage attitude of the consumers towards

small business contents.

1.5 RESEARCH QUESTION

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The study would examine the following question

1. What role does the government play in the promotion and

development of small scale enterprises in the eagle supermarket

Kubwa Abuja?

2. What impact does small and medium scale enterprise make to

Nigeria’s economic growth?

3. What are the constraints confronting the development of the small

scale business in the eagle supermarket Kubwa Abuja.

4. What is the trend of the financial support given to SMEs in

Nigeria?

1.6 RESEARCH HYPOTHESIS

Hypothesis is defined as an assumption or statement which may or

may not be true concerning one or more programme.

Ho: small scale business has not impacted on the level of poverty in

Nigerian economy.

Hi: Small scale business has impacted on the level of poverty in

Nigerian economy.

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1.7 SCOPE OF THE STUDY

This project (study) will analyze and evaluate small scale business

and its impact on economic development with the view of looking

at its relevance in economic development and some of its challenges

they face so that we can devise ways of making them effective and

efficient and are used as vital tools in economic development. It also

provides stimulation for further study (research) in the area.

1.8 LIMITATION OF THE STUDY

The study is limited to eagle supermarket Kubwa Abuja due to time

constraint. Although the study focuses on small business enterprise in

Nigeria the result will be applicable to small business enterprise in

other art of the country since all of them share common features.

1.9 DEFINITION OF TERMS

Small scale business it is any business that has a total investment

between 10,000 to N 2, million exclusive cost of land but including

working capital or it can be seen any business that is independently

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owned and manage, started with capital and operated with few

employee to produce goods and services to the people at a profit

broom and longneck (2000).

Business:It is any legitimate activity or activities embarked upon by

and individual or group of individual for the production of goods and

distribution of services for the satisfaction of need and want of the

people for the purpose of making profit Nwoye (1994)

Culture: It is the total collection of people, beliefs, custom

knowledge, art moral and other attribute that are accumulated by

individual of a particular society Bakin (2001)

Profit:It is the reword of an entrepreneur of investing his money and

time. It also seen as the additional surplus that a business gets after

deducting the additional cost incurred in the business, Robbins and

peter (2003) .

Product: It is anything intangible or tangible that is capable of

satisfying people want and needs it includes goods and services

Drucker (2002)

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Technology: It means modern method applied to material in

production of goods and services it is the practical application of

research and discovery which results in a bright standard of living

and increase productivity Onuoha (2000).

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CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION

This chapter will pay emphasis on relevant literature on effect of

small scale business on poverty reduction in Nigeria. The view

expressed here are on knowledge from already conducted systematic

and scientific method. It will further shed more light on how small

business use to maximize wealth of the owners and still remain in

business. These are some major aspects that will be covered during

this research project.


Small business enterprises small business enterprises are everywhere

and in every line of work they can be seen in every community many

people cherished freedom and want to be their bosses somebody the

rate of unemployment in this country are increasing periodicity and

people have now realized that it does not pay to work as quit

servant. As a result, people now think of owing the business.

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Government (Federal and State) have championed the campaign for

individual, most especially the employed ones to come creative and

drop the employed ones to creative and drop searching for the Job

that is not there Rather they should start thinking of how to create

employment for themselves, and it possible employ other people in

order to achieve this aim, quilt lot of founds among those are small

scale industry scheme (5518)b National Directorate of employment

(NPE) loan facilities for small industrial owners, peoples Bank,

community Bank family support, programme (FEAP) poverty

Alleviation programme and most of others, According to Theodore

Yntema ( committee of economic Development (ED), small business,

is a symbol of opportunity, enterprises innovation and achievement.

It stands for something essential to our freedom” A substantial

number of newly established have failed despite the time effort

money committed and zeal of the entrepreneurs. They failed due to a

number of problems, among them are insufficient capital

underutilization of the existing (adequate capital borrowing money

without planning just how and when to replay it, extending credit too

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freely and failure to keep complete, accurate and reliable accounting

records

2.3 CONCEPT OF SMALL SCALE BUSINESS

While small scale business make significant contribution to our

economy, there is no clear understanding of what small business is to

some a small business is a firm with no more a speciation number of

employee, such as five to ten others consider a business small if it

serves only a local market there are as many ways to defined

business as there are people wanting to do so this is because what is

considered a business in one economy made be labeled medium or

large scale in other.

The united nation industrial Development organization (UNIDO 1989)

has established guidelines for classifying small business. The starts

that a business is small, if it meets two or more of the follow criteria.

i. Ownership and management are usually vested in the same

individuals i.e management is not independent.

ii. The small business controls a small share the market and therefore,

constitutes a little quota in the large market.

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iii. Capital is made available by the owner and policy decisions are in the

hand of individual or small group of entrepreneurs.

Obeleagu Nzeribe, (1990) argues that the above definition is based on

parameters such as the installed capital utilization output,

employment, capital, type of industry or other criteria which have

relevance to the industrial policies of the nation.

iv. Albert, (1980) define small scale business as those enterprises that

have relatively little capital investment, that produce in small

quantities and as a result control a small share market. Such

business employs not more than fifty workers and there in, the

management, marketing and entrepreneurial functions are vested in

the proprietor. Nwakoby crises the definition of the small scale

business which he says is based on the parameters of size, number

of employees, capital formation and locality of operation on the

ground. Classer, J 1989).

According to the central bank of Nigeria in its monetary policy

circular No. 2 (1980) a small scale business is defined as an

enterprisewhich annual turnover range s between N 25, 000 and N

500, 0000 (1989 Lagos CBN Publication)

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According to section 351 (1) of companies and allied matter decree

(CAMA) No.1 of 1990 states that a company in a year if the following

condition are satisfied.

1. It is a private company having share capital

i. None of its member is an alien.

ii. Its net asset value is not more than 1 million or such amount as may

be forced by the commission, from the above definition However, it

could be concluded that the term small scale is relative, therefore, in

order to be adequate in facility effective implementation of

programme there is an urgent need for provision and clarity in

operational definition.

iii. The clarity in operational definition will not only clear the security

deference between categories of firm or industries but will also be

permanent to the attempts of objectives.

2.4 CURRENT CONCEPT OF THE STUDY

According to Ekeigwe (1992) Small business unit is that of necessity the

basic conditions of interned control must be violated. Small scale

enterprises has a problem of vital business information.

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According to Osubor (1994) the short coming of small business

enterprise are problem of gaining capital for expansion, the manager

unable to meet or secure the necessary collateral for credit worthiness

problem Pf continuity is small business especially in Africa, the death of

the owner business organizations keep up told secrets of the business

and therefore may bring abrupt and to the business.

Osubor mentioned other problem as Burdon if bearing the entire loss of

the business failure lack of mass production, the lengthy hours of work

which reduce mental Efficiency in production and management.

Kulu (1986) said about the importance of small business, the task or

role of these small scale business is the creation of Jobs in our situation,

it has to be in a move that will absorb as much of our limited capital as

possible therefore small scale industries are more suited to our

circumstance.

Oshunbiyi (1989) also emphasized the roles of small scale industries in

his articles thus,

i. That small scale business harness their raw materials locally and serve

as raw materials inputs to the large scale industries.

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ii. They look inwards and identify or develop prospection products for

domestic consumption and that export market as a means of earning

foreign exchange for the state, till on the importance of small scale

industries, Austin (1981) said “small scale industries has potential to

assist in the objective of rural development.

Iwuoha (1993) highlights some of the advantage to be gained in

establishing small scale business.

1. Efficiency in the utilization of resources he stated that small business

make efficient use of resources thereby lending to an increase in

output real income e.t.c. it is a known fact that small scale business

makes good use of what large good use of what large scale

industries might consider to be west product for example large

paper were used to make cartons.

This goes to show that, indeed small scale business make efficiency

use of resources as Iwyoha rightly pointed out small scale

enterprises helps to mobilize resources that would otherwise remain

idles in the hands of people and employ them productively.

2. Small scale business affords the opportunity for training managers

and entrepreneurs, small scale industries provides a means of

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training mean and women of proven ability, intimidation and

leadership to be efficient managers and entrepreneurs.

Osaze (1986) listed the importance of small scale industries as

follows.

i. The small scale industries avoid the heavy cost which often results

from Agglomeration at large labor forces.

ii. Provide suitable training ground for administrative responsibility than

large units.

iii. They can be less of a break with previously established modes of

living and therefore presents less of a staring then industrialization

in the form of large unit and.

2.5 IMPORTANCE OF SMALL SCALE BUSINESS

The small are generally acknowledge as economic growth drivers

and therefore, key to the industrialization process of any nation’s

economy. By their nature, their also are primarily private sector

limitation agent of social transformation and the stimulation of

indigenous entrepreneurship and technology indeed, the private the

building blocks of engaging economics experiences all over the world

have power that SMES are vital to economic growth and especially

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so for developing nations like Nigeria. This particular value they

create includes

a. Employment power, contributing significantly to improve living

standards characterized SMES. Also, the SMES were projected to

serve as a springboard for indigenous entrepreneurs to grow into

large scale ventures and attract foreign into large scale ventures and

attract foreign direct investment (FDI) through partnerships and

enable motivated

b. They also develop broad-0based entrepreneurship, cultivars with

equitable and sustainable diversification and disposal of industries in

all sector of the economy.

c. Low initial capital start gestation period small labour force and use of

simple technology usually characterized springboard for indigenous

entrepreneurs to grow into large scale ventures and attract foreign

into large scale venture and attract foreign direct investment (FDI)

through partnerships and enable motivated individuals to find new

avenues for investment and expanding their operations. There are

also opportunities indicating a bright future for SMES sector

development in addition the recognitions of SMES sectors that has

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higher potential for employment generation per capital invested

attracts key actors to support SMES development programme. Since

SME development Dues contribute significantly to poverty allegation

resources earmark for poverty altercation will also be availed to the

SME section since small business tends to be labour intensive, they

create employment at relatively low level of investment per Job

created. At present unemployment is a significant problem that

Nigeria has to deal with. Estimate shows that there large with little

marketable skill. The public sector employs but few of the new

entrant into the labour market leaving quit a number to Joint the

unemployed or the underemployed reserve. Most of these presence

and up in the SME sector, and the fact that Nigeria is characterized

by the low rate of capital formation, SME are the best option to

address this problem.

1.6 ESTABLISHING A SMALL SCALE BUSINESS

Every business comes out of an idea. Business are stated by man

and woman into identified that people have contained need that are

unsatisfied. When you have a first vague through about business

opportunity you need to develop it into a business idea. Therefore,

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an idea may be a thought an option a picture in mind a vague belief,

a fancy, a feeling that something is probably about to happen e.t.c

this ideas must be well conceived carefully articulated and appraised.

Otherwise, it will be like laying a foundation for failure at the

beginning of the business. Any business choose idea needs to be

tested in order to be sure of its strong completion and profitability

capability the commonest and easiest way to test a business idea is

through swat analysis .

After wards feasibility market, technical studies then viability, test is

carried out.

Business planning, which is the process of sitting objectives and goals

of an organization and the formulation of a decision model for

selecting means achieving then. One of the animal/anticay decision to

entrepreneur must take at the onset of the labour business ownership

he must go in for.

The entrepreneur choose the name of the business he then goes to

the corporate Affairs commission in the case of Nigeria to register his

business. The registration of the company is a elaborate affir that

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involves the registration of some vital documents. Choosing the

location of the business also could be very tasking because the

entrepreneur will look at various factors like a case to people market

raw materials e.t.c which will also determine the success or otherwise

of the business.

The preparation of a feasibility study is a pre-requisite for a thorough

evaluation of the business idea. This is to access the benefit of the

business. Also, to check the best available means of carrying out the

business in a profitability vis-a vis considering the cost, the purpose and

the benefit of the business. Also to check the best available means of

carrying out the business in profitable manner before implementation of

a business proposals. All feasibility study usually must be formally

documented. Business proposals seek to determine the feasibility of an

indented business. Feasibility means the ability to initiate and operate a

business successfulness and interned to the examination of the

successfully of an intended business. A feasibility study provide

information about the various elements, which form the basis of a

business proposal. It also answers the question such as.

a. What to do ( i.e business definition)

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b. Where to do it (i.e business location)

c. How to do it (i.e business reassures requirement, money man

material, machines and methods)

Business usually starts with idea generation, which is than developed

into a formalized business plan and limp lamented starting a business

without a feasibility study is like embarking on a journey to a stage land

without asking question as to the distance to culture of the place, the

traveler will not make or prepare for any exigency that may emanate in

the course of the Journey so also anybody who embank on business

venture without a feasibility study will stand the risk of losing his/her

resources to some Affair seen course without understanding benefits

sun manly, establishing a business in seal scale begins with business

idea, such analysis, staff strength legal responsibility, insurance, startup

capital, costing of the planned financial plan than implantation.

2.7 FINANCING A SMALL SCALE BUSINESS

Funding is one of the most important elements of business growth and

survival. Starting up a new venture or expanding an existing up a new

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venture or expanding an existing one require found that may not be

available knowing where to get the required finance is one step forward.

Service of founds for small scale entrepreneur could be through,

i. Formal financing sector

ii. Informal financing sector

iii. Government financing sector

iv. Capital financing sector

i. FORMAL FINANCING SECTOTR

Loan facilities to small scale business could be obtain froma formalized

financial institution such as bank, limited true e.t.c in some cases

commercial bank and merchant bank provide credit facilities to SSE/I

although their requirement and very stringent with too many protocols

sometime you are even ask to give kick-back to get loan

2ii. INFORMAL FINANCING SECTOR

Founds are made available to SSE/1 through a network of informal

financing arrangement in most cases loan facilities through this sources is

relatively easy because of the case of borrowing and liberal repayment

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terms documentation is also minimizing and trust are sometime used as

collateral depending on the parties involved.

2iii. GOVERNMENT FINANCIAL SECTOR

A useful complement to the above is the small and medium industries

equity investment scheme (SMES) which is an initiative of Nigeria bank and

the central bank of Nigeria (CBN) in response to the desire need to found

the real sector and nature it back to reality. It requires all the banks

operating in Nigeria to set aside 10% of their annual profit after taken and

for equity investment in SMES

2iii. THE CAPITAL MARKET

The capital market is another source that SSE/S could get additional found

for its operation but to get found from this source, the record and must

have a formalized management structure is one of individuals and

instrument involved in efficient chanting of founds it constituency is broadly

divided into four investors individuals, unit trust or other corporate bodies

this a citadel of private sector to render financial services capable of

stimulating the nation economy the second tier securities market (SMES)

provide an opportunity exchange the stringent listing equipment of the

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exchange prevent most of them from being listed trade in the stock of the

exchanges the exchange is responding positively to these economic

changes and there are therefore exception to the rules to the above

requirements.

2.8 BUSINESS TRAINING AND CONSULTING

SME operating in Nigeria has rather low Business skill and seen not to

appreciate the importance of business education on the other hand the

quality of training provide by existing business training institution and

cost involved has tended to be unattractive and unaffordable to the

potential beneficiaries. Consequently, government established the SME

DAN to enhance the capacity of institutions providing business training

to SMEs in Nigeria, as in must part of sub-sahara Africa, the world

Bank group has been providing technical assistance to build capacity in

the small business sector. The two SME facilities for sub-sahara Africa

newly (Africa Project development facilities (Aprof) and Africa

management services commission (AMSCO) that are mange by the

international (IFC) are part of the world bank scheme for capacity

building. A part from foundation by it and a broad net word of donor

they often a vitiating of important services raying from preparing of

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business plan to broader capacity building limitative such as training,

support for business association, development of local consulting

companies financial and non-financial institution that target small

business.

2.9 ECONOMIC EFFECT OF SMALL SCALE BUSINESS AND

DEVELOPMENT

Small scale business is the fuel on which most developed countries

run. Entrepreneur is the foundation on which small business s build.

Innovation is the catalyst for entrepreneurial drive. A Neath economy

is therefore one with active and abundant entrepreneur say LOURENS

Small and micro enterprises irrespective of the definition constitute the

bank enterprises is most economical in the world and has over the

years received services attention from both the development and

developing countries, particularly, since the 1970n and 1980s. more

than 95% of forms in the community ( story 1994-7) the enduring

interest in the development and promotion of SME sterns not only from

the sector to natures economy but also from three intern related

development that provide in the last three decanted first, is the

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realization that the import substitution industrialization strategy widely

adopted in the 1960s has failed to the expectation of repaid

transformation of the economy and generation of the small enterprises

sector particularly in terms of low cost employment creation and

equitable in distribution becomes more appealing? Webster by the

world bank financed small and medium scale enterprises was U.S

Dothers 4,675 which was significantly low than in the large industry

project for Africa countries, the development of small enterprises

sectors forms part of the element in the self-reliance economic

development strategy adopted in the Lagos plan of /Africa (OAU,

1980,CL4 secondly the focus on the high level of poverty and the large

number of the poor in developing countries which was estimated to

poverty at the Centre of the global development agents with the

development of SME as one of the vehicles for its alleviation in both

rural and urban area particularly among women ( world bank (190:13)

noted that for the greater part of the poverty group, the small

enterprises is only activity in which they can usefully hope to be

engaged particularly in the immediate future.

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2.9.1 CHALLENGES OF SMALL SCALE BUSINESS

Starting a business is a bug achievement for many entrepreneurs, but

maintains one is the large challenges that face every business whether

they are large or small. These include e]things like living the right

people, building a brand and so on. However, there are some that are

unique to small business ones most large companies have grown out of

long business go well look at the five (5) biggest challenges in this

article.

2.9.2MONEY MANAGEMENT

Having enough cash to cover the bill is a must for any business, but

it is also a must for every individual whether it is your business or

your life one will likely emerge as a capital drain that puts pressure

on the other in order to head off this problem, small business owners

must either be heavily capitalized or be able to pick up extra income

to share up cash reserves when needed. This is why many small

business start out with the funders working a Job and building a

business simultaneously, while this split focus can make it difficult to

grow a business running out of cash makes growing a business

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impossible money management becomes even more important when

cash is following into the owner. Although handling business

accounting and taxes may be within the capabilities of most business

owners professional help is usually a good idea. The complexity of

business books go up with each client and employee, so getting an

assist on the book keeping can prevent it from becoming a reason

not to expand.

2.9.3FATIGUE

The hours, the work and the constant pressure to perform wear on

even the most passionate individuals many business owners, even

successful ones, get stuck working much longer hours than their

employees moreover, they fear that their business will stall in their

absent, so they avoid taking any long breaks way from work to

recharge when fatigue sets in the weariness about the business,

including the desire to abandon it completely finding a pace that

keeps the business humming without grinding down the owner is

challenge that comes early ( and often) in the evolution of a small

business.

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2.9.4 FOUNDER DEPENDENCE

If you get hit by a car, is your business still producing income the

next day? A business that can’t operate without its founder is a

business with a deadline many businesses suffer from founder

dependence, and this dependence is often caused by the founder

being unable to let go of certain decision and responsibilities as the

business grows.

Meeting this challenge is easy in theory a business owner merely has

to give over more control to their employees or partners in practice,

however, this is a big stumbling black for founders because it usually

involves compromising (at least initially) on the quality of work

being done until the person doing the work leans the ropes.

2.9.5BALANCING QUALITY ANDD GROWTH

Even when a business a not founder dependent, there comes a time

when the issues from growth seems to math or even outweigh the

benefits whether a service or product, at some point a business must

sacrifice in order to scale this may mean not being able to personally

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manage every client relationship or not inspecting every widget

unfortunately, it is usually that level of personal engagement and that

attention to detail that make a business semi successful. Therefore

many business owners often find themselves tied to these is a large

middle ground between shoddy work and an unhealthy obsession

with quality, so it is up to the business owner to navigate the

company’s process toward a compromise that allows scale without

hurting the brand.

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CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION

This chapter provides an overviews of research method employed for

collecting the data were used for analysis to arrive at conclusion in

the project work. it define and expantiate on the method of

investigation sampling procedure and measurement of the variable,

research instrument and the data analysis techniques other areas

discussed include questionnaire design administration validation and

testing.

3.2 DESIGN OF THE STUDY

For the purpose of this study, the research design adopted was

descriptive survey design because primary data was used.

Research design also defines the extent to generalization of research

finding.

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3.3 RESEARCH POPULATION

Population can be defined as the aggregate of people thing or object

occupying in a given territory/environment for the purpose of the

study, the population will be on eagle supermarket Kubwa Abuja

which research question will be administration to the staff of that

office is 100.

3.4 SAMPLE SIZE AND SAMPLING TECHNIQUES

Sample size is the number of sampling unit or subject of the

population that is selected for studying in order to generalize about

population parameters.

This research work focused on eagle supermarket Kubwa Abuja in

which hundred (100) staff were selected.

3.5 SOURCES OF DATA COLLECTION

Relevant information to be used for this study will be gathered

through the combination of primary and secondary.

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i. Primary Data

Primary data are that information collected for the first time from the

original sources such as interview questionnaire and letters are the

exact information used for the research work.

3.6 RESEARCH INSTRUMENT USED

It administered personal services or questionnaire, I also make use of

the same question used to respondent from predetermine schedule.

3.7 QUESTIONNAIRE DESIGN

The questionnaire was design by the use of structured method of

questionnaire which the option is simple and is easy for the

respondent to respond to the question.

3.8 QUESTIONNAIRE DISTRIBUTION AND COLLECTION

The questionnaire was taken to the area at study within, for example,

Abuja Metropolis and the researcher was fortunate to receive all the

answers to the questions back and completed.

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3.9 METHOD OF DATA ANALYSIS

The research decided to used random sampling techniques this ways

to give every number of population equal chance of being picked and

to avoid bias.

Data collected during the survey were presented analyzed and

interpreted for understanding in doing this table were use for the

data presentation.

More ever the percentage per class of respondents to questions used

in data analysis was completed interpretation were made on the base

of the percentage value derived from the computation.

37

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION

This chapter, present the data gathered in the course of conducting

this study moreover, the data presented are analyzed to give

meaning to the findings of the research work. The data were

gathered through the use of questionnaires and oral interviews were

also conducted.

This further generated additional data, which added together,

produced a strong background to support the objectives of the study.

4.2 DATA PRESENTATION AND ANALYSIS

The research would layout the data obtained from the primary source

through the use of questionnaire. This information are presented and

analyzed taking the hypothesis one after the other. In carrying out

the analysis, only selected question in the questionnaire, which are

related to the hypothesis, would be taken care of in this process.

38

Question 1: Does inadequate infrastructure affect our business?

Table 1

Responses Respondents Percentages (%)

Yes 12 88

No 3 12

Total 15 100

Source: Survey Data,2015

From the above table 12 respondents agreed that lack of adequate

infrastructure affect success of their business, while 3 respondents

said that lack of infrastructure did not affect than in establishing their

business.

Question 2: How would you rate the infrastructure available in this

area concerning your business?

39

Table 2: Showing responses of industrialists

Code Rate of infrastructure Point obtained Percentage (%)

A Very adequate 4 16

B Adequate 3 12

C Inadequate 3 12

D Very inadequate 17 56

E None 3 4

Total 30 100

Source: Survey Data, 2015

From the above, 12% of the respondents believed that a business

can be successful without having a good infrastructure, 68%

indicated that it would not be possible without good infrastructure,

while 20% did not indicate their opinion.

40

Question 3: Has the enterprise ever obtain financial supports

Table 3: Showing response of industrialist

Class of

response

Number of respondents Percentages (%)

Yes 3 12

No 12 88

Total 15 100


From the table 3 above, it was observed that they had over obtain

financial support, while 12 of the industrialist said that they have

never made any attempt because it is not easy to obtain.

They declared that even if they had any intention of doing so,

condition by financial organization are very hard if not impossible for

small scale industrialist to be able to fulfill.

However, on the commentary, the 3 who had accepted to obtained

financial support pointed out that it was not anything to write home

about especially as the financial base is small.

41

Question 4: In your opinion, what is the main problem of your

business success?

Table 4: Showing response of industrialists.

Code Factors Point obtained Percentage (%)

01 Lack of infrastructure 8 14

02 Government Policy 5 59

03 Poor access to bank loan 20 36

04 Lack of managerial

ability

0 0

05 Lack of Capital 23 41

Total 56 100


From the above table, it was observed that among 15 obstacles

assumed by the researcher to be likely factors that could, prevent

small scale industrialist from achieving success, factor 05 captured

that highest percentage of 41% followed by 03 with 36% of with

42

14% and with 9% and finally 04 which had no point of the total point

scored.

Question 5: Dose lack of appropriate managerial assistant affects the success of your business?

Table 5: Showing the responses of industrialists


Yes 3 12

No 12 88

No idea 0 0

Total 15 100


From the above 3 respondent agreed that lack of appropriate

managerial assistance affects the success of their business. 12 said it

does not affect the success of their business.

43

Question 6: People do not patronize you because you did not affect

good services.

Table 6: Showing responses of industrialist


Agree 3 12

Disagree 12 88

Total 15 100


The above show that three of respondents agreed that people don’t

patronize them because they are not offering good service due to

managerial knowledge while 12 disagreed that do not offer poor

services.

They believe that their service are adequate for their customer.

44

Question 7: Do you have a trained manager?

Table 7: Showing responses industrialist

Response Respondents Percentages (%)

Yes 5 33.3

No 10 66.7

Total 15 100


From the above table, five admitted that they have trained managers

while 10 said they never bothered to train their manager.

Question 8: Have you ever been to any consulting services for any managerial assistance?



Yes 6 40

No 9 60

Total 15 100

Source:Survey Data, 2015

45

The above shows that 40% of respondents said they have the have

been to consulting service for managerial assistance while 60% of

respondents said they have gone for any managerial assistance.

Question 9: In your first year in business, how many employee did

you have?


Code no to

employee

Number of respondents Percentages (%)

A 0-2 8 53.3

B 3-5 5 33.3

C 6-10 2 13.3

Total 15 99.9


Question 10: Has the establishment of some basic amenities helped in the smooth running of your business?

Table 10: Showing response of industrialist


Yes 12 80

46

No 3 20

Total 15 100


From the above table 10,12 industrialist agreed that basic amenities

has help in the smooth running of their business, while 3 disagreed

that bai8s amenities has helped in the smooth running of their

0usiness.

Question 11: How did you raise found to start your business


Code Source of found Point obtained Percentage (%)

A Personal Salving 10 66.7

B Loan from government 2 13.3

C Aids from friend &

family

3 20

Total 15 100


From the above table 66.7 are the opinion that they stared their

business with personal salving, 13.3% agreed that they started with

47

loan from government while 20% agreed that they started with aids

from friend and relative.

Question 12: Did you have any branch elsewhere?

Table 12


Yes 4 26.7

No 11 73.3

Total 15 100


From the above table 4, industrialist agreed that they have branch

elsewhere wide 11 industrialist said that they don’t have any other

branch.

CONCLUSION

Base on the above analysis, it discovered that lack appropriate

managerial assistance is not the course of scale business failure this

therefore, makes the null hypothesis stood rejected.

48

4.3 TEST OF HYPOTHESIS

In order to determine the statement of hypothesis to accepted or

rejected Chi-square was used at given or chosen level of significance.

The Chi-square C x2 test of significance is one of the most commonly

used non parameter test. CF is applied to data from a style sample

and requires only nominal level information’s the well an observed

set of data fits an expected set the formula for Chi-square can be

stated like thus:

X2 = ∑Cfo – fe)2

Fe

where X 2= Chi-square

fo = frequency observed

fe = frequency expected

Hypothesis One

Ho: lack of adequate infrastructure is not the course of small scale

business failure.

49

Hi: Inadequate infrastructure is the case of small scale business

failure.

To test the hypothesis, table no 1 be reproduced to show the number

of respondents.

Observe Frequency

Responses Senior Staff Intermediate staff Junior Staff Total

Yes 3 4 5 12

No 0 1 2 3

Total 3 5 7 15

X 2∑ (fo - E)2

Fe

Where 0 = observed frequency

E = expected frequency

R = Row total ×column total

Grand total

50

CONSTRUCTION OF CONTINGENCY TABLE

Yes 3 (2.4) 4 (4) 5 (- 5.6) 12

No 0 (0.6) 1 (1) 2 (1.4) 3

Total 3 5 7 15

Yes = Row

12 × 5 × 36 = 2.4

15 15

12 × 5 × 60 = 4

15

12 × 7 × 34 = 5.6

15

No Row

3 × 3 × 9 = 0.6

15 15

3 × 5 = 15 = 1

15 15

3 × 7 × 21 = 4.1

15 15

51

Computation Of Chi-Square

X2 ∑ (fo - fe)2

e

(fo- fe) 2 = (3 – 2.4) + (4 - 4) 2+5.56) 2+ 1 - 1) 2 + 2 - 14) 2

(fo - fe)2=(0.6)2 + (0)2 + (- 0.6)2+ (- 0.6) 2 + (0.6)2

e 4 4 0.6 0.6 1.4

= 0.15 + 00.06 + 0.6 + 0 + 0.26 = 1.07

read the table value 99.5% i.e 0.995

X 2 tabulated value = 0.010

X 2calculated value = 1.07

Accept null hypothesis (Ho) if X 2 calculated is greater than X 2

tabulated

reject – null hypothesis (Ho) if X 2 calculated is greater than X 2

tabulated 1.07 > 0.010

Reject null hypothesis, accept alternative hypothesis (Ho) therefore,

lack of infrastructure is the cause of scale business failure.

52

Hypothesis Two

Ho: lack of found is not the cause of small scale business failure.

Hi: lack of found is the cause of small scale business failure

4.4 SUMMARY

This chapter analyzed and interpreted data under three set of

hypothesis. All hypothesis were analyzed, tested and interpreted

accordingly.

Conclusively, everything was based on the empirical test carried out

by the researcher.

4.5 RESEARCH FINDING

The various responses gathered from the respondents have been

analyzed and interpreted into meaningful from for easy

understanding.

Based on the analysis of the hypothesis, the null hypothesis is

accepted, while the alternative hypothesis was rejected by the null

hypothesis was rejected in hypothesis one and two the alternative

hypothesis were accepted.

53

CHAPTER FIVE

SUMMARY, CONCLUSSION AND RECOMMENDATIONS

5.1 INTRODUCTION

This research work centers on effect of small scale business on

poverty reduction in Nigeria. It is divided into five chapters.

5.1 SUMMARY

This project studies impact of small scale business and its economic

development. The significance of small business and its relevance to

economic development.

In second chapter, literature review I wrote that is now increasingly

recognized that the small and medium enterprise (SMEs) play a

crucial role in employment. Creation and income generation in

Nigeria in particular can be easily established since there requirement

in term of capital technology, management and even utilities are not

as demanding as it is the case for larger enterprises. These

enterprises can be established in rural siting. And thus add value to

the agro product aid at the same time facilitate dispersal of

enterprise indeed SMES development is closely associated with more

54

equitable distribution of income and thus important as regards

poverty alleviation. At the same time, SMEs serve as a training

ground for emerging entrepreneurs.

In Nigeria, the full potent of the SMEs sector has yet to be tapped

due to the existence of number of constraints hampering the

development of the sector. They include unfavorable legal and

regulatory frameworks, undeveloped infrastructure, poor business

development service limited accessed SMEs to financial effective and

poverty co- ordinate institutional support framework etc. It is for this

reason that SMEDAN was established to address the constraints and

to take full potential of the sectors.

Ardhoc and Piecemeal measure will then be replaced with sustainable

integrated and co-ordinated intervention thispolicy will serve as

guideline and existing ones to grow and become more competitive.

The expected outcome is to have a significantly increased

contribution for the SME sector to economic development of Nigeria.

While chapter three deal with research methodology employed in the

course of this study so as to come up with the required data for

55

analysis. Chapter four reviewed, presented and analysis data

collected.

5.3 CONCLUSION

In conclusion small scale business is the heart beat that pumps out

blood for economic development. it is indeed a vital tool for

development of any economy in the world. be it development or

undeveloped. The need to stimulate entrepreneurship, new ventures

creation and small business development in Nigeria has never been

greater. The solution to some of the biggest macro- economic

problem like unemployment and cross domestic product. (GDP)

growth lies in developing entrepreneurs and improving the success of

startup companies obviously all small business owners should bear in

mind that no any business can service or achieve its goals or object

without putting the strategic manager firm corporation, and

institution is therefore, the weapon prepared for war front of every

business. So as to better all negative obstructions coming to the

business.

56

5.3 RECOMMANDATIONS

The recommendations suggested by this research work are merging

of strategic management to the small scale business so as tom

achieve their goal and objective.

Secondly, strategies for implementing the SMEs development policy

should focus on three main areas namely. The creation of an

enabling business environment, development of financial and non-

financial service and putting in place supportive institutions

ofinfrastructure.

Thirdly, in the course of implementing, the economic reforms

programmes of the government that government should put in place

a number of strategies and programme aiming at addressing some of

the major constraints. Such programme and strategies should include

rural development. Strategy, agricultural sector development

strategies. To complement these and micro policy and poverty

alleviation strategies to complement these and other existing

limitations. This SME development policy small ensure that SMEs

57

related component are adequately implemented harmonized

coordinated.

58

BIBLIOGRAPHY

Akpoymare Oghojare be (1998): Strategic Management Business Policy. Published by Mathew press lit Ikeja Lagos, Nigeria.

Ewurum U.J.F (2000): Business Management Topic edited by E.U.L Imaja vol.1.

Harvey .c. Krentzman (1968): Business Management Printed in U.S.A.

Mac. A.R Abdullahi (2001): Reference to Lecture on Small Scale Enterprise unpublished.

Nwoye Ifeoma May (1996): Small Scale Management Enterprises Printed by Dim and Duris venture Oweri.

Okpar o. Friday (2000): Entrepreneurship Precision Printed Enugu Nigeria.

Idris Musa (2008): unpublished Entrepreneurship Management. Federal Polytechnic Nasarawa.

Nwoye M.I (1991): Small Business Enterprise ( How to start and succeed, Benin city ambik press).

Olokoyo S. (1995): Small Business management. A guide to Entrepreneur, Kaduna, Ola Jamon printers and publishers.

59

Oshagben T. A (1985): Small Business management in Nigeria-Lagos, logman Nigeria limited.

Akeredulu A.E.O (1975): The under development of indigenous enterprise Ibadan, university press 3rd edition.

Bolaway A. (1973): igeria Enterprises and the Employment of your Ibadan wiser p.26.

60

APPENDIX I

Department of Business Administration and Management School of Business Studies Federal Polytechnic Nasarawa Nasarawa Sate.

Dear Sir/ Madam,

LETTER OF INRODUCION

I am a student of the above named institution and am conducting a

research on the topic “ Effects for Small Scale Business on Poverty

Reduction in Nigeria.(A case study of Eagle Supermarket Kubwa

Abuaj)

This research work part of the requirement for the fulfillment of the award

of national Diploma (ND) in Business Administration and management

studies.

I shall be very grateful if you supply me with the necessary details in this

questionnaire. So as to make the whole exercise a success. This study is

purely academic and as such, any information given will be treated as

confidential.

Thanks for your co-operation.

Yours faithfully,

Audu Yahaya

61

QUESTIONNAIRE

EFFECT OF SMALL SCALE BUSINESS ON POVERTY REDUCTION IN

NIGERIA, WITH PARTICULAR REFERENCE TO EAGLE

SUPERMARKET KUBWA ABUJA.

INTRODUCTION: PRICE TICK AS APPLICABLE

RESEARCH QUESTIONNAIRE

1. What is your age?

a. 18 – 29 ( ) b. 30 – 39 ( ) c. 40 – 49 ( ) d. 50 above ( )

2. Sex

a. Male ( ) b. Female ( )

3. What is your academic qualification

a. FSLC ( ) b. WAEC ( ) c. ND ( ) d. HND/DEGREE ( ) e. MASTER ( )

4. Does in adequate infrastructure affect your business

a. Yes ( ) b. No ( )

5. How would you rate the infrastructure available in this area

concerning your business

a. Very adequate ( ) b. Adequate ( ) c. Inadequate ( )

d. Very Inadequate ( ) e. None ( )

62

6. Has the enterprise ever obtained financial support?

a. Yes ( ) b. No ( )

7. In your opinion, what is the main problem of your business?

a. Lack of infrastructure ( ) b. Government policies ( )

c. Poor access to bank loans ( ) d. Lack of management ability ( )

e. Lack of capital ( )

8. Does lack of appropriate managerial assistance affect the success of

your business?

a. Yes ( ) b. No ( )

9. People do not patronize your business you do not offer good services

a. Agree ( ) b. Disagree ( )

10. Do you have at trained manager?

a. Yes ( ) b. No ( )

63

11. Have you ever been to any consulting service for any managerial

assistance?

a. Yes ( ) b. No ( )

12. In your first in business, how many employers did you have?

a. 0 - 2 ( ) b. 3 - 5 ( ) c. 6 - 10 ( ) d. 11 – 20 ( )

13. Has the establishment of some basic amenities helped in the

smooth running of your business?

a. Yes ( ) b. No ( )

14. How did you raise found to start your business

a. Personal savings ( ) b. Loan from the government ( ) c. Aids

from friends and family ( ) d. Gratuity ( )

15. Do you have any branch elsewhere?

a. Yes ( ) b. No ( )

16. If yes how many branches do you have?

a. One ( ) b. Two ( ) c. Three ( )

64

17. Is mismanagement the cause or small scale business failure?

a. Yes ( ) b. No ( )

18. How can the government help you in the development of your

business?

a. Provision of infrastructure ( ) b. Provision of loans ( )

c. Training of your staff ( )

Documents

CHAPTER ONE INTRODUCTION 1.0 BACKGROUND OF THE STUDY · “any business concerned whose total project cost does not exceed ₦300,000.00 only. In the context of Nigeria economy, the