1.1. BACKGROUND OF THE STUDY
The critical importance of small and medium scale businesses in both developed and developing Nations has led and would continue to lead to a reconsideration of the role of Small and Medium Scale Enterprises in the economy of nations. The development of many countries is often measured by such indices as the level of industrialization, modernization, urbanization, gainful and meaningful employment for all those who are able and willing to work, income per capital, equitable distribution of income, and the welfare and quality of life enjoyed by the citizenry. There is no doubt that small businesses exist in most economic environment in the world today. The historical background of small and medium scale businesses in Nigeria can be traced back to 1946 when the essential paper No. 24 of 1945 on “A Ten year plan of development and welfare of Nigeria 1946 was presented. Small and Medium Scale Enterprise is an all time necessity. It was there at the beginning; it was gained prominence today and will increase its importance tomorrow. This is simply dictated by the developmental needs of the Nigeria society. In recognition of the depth and breadth of the consequences of small-scale enterprises in alleviating poverty and national development, there has been a deep-self interest in recent years for development of Nigerians small-scale enterprises particularly since the adoption of the economic reform in 1986. The small and medium scale business sector is seen as a key to Nigeria's growth and alleviation of poverty and unemployment in the country. Therefore, the development of these small and medium businesses in developing economies like Nigeria is of critical importance since it brings about a great distribution of income and wealth, economic self-dependence, entrepreneurial development employment and a host of other positive, economic uplifting factors (Aremu 2004). Moreover, in a country like Nigeria with an adverse Balance of Payment situation, the growing contribution of the Small Scale Industries sector in Nigeria's export portfolio goes a long way in generating foreign exchange and smoothening out the adverse Balance of payment situation. Aremu (2004) posited that Small Scale enterprises play an important role in the economics of any country in accordance with their relative levels of development. He further emphasized that Poverty is a worldwide phenomenon and its incidence in Nigeria had been high and on the increase since 1980. This position is in line with (Adeyemi and Badmus 2001 and Schmitz 1982), they also argued that adequate development of small and medium scale enterprises will reduce the unemployment level in Nigeria.
1.2. STATEMENT OF THE GENERAL PROBLEM
Overtime, the poor performance of small businesses in Nigeria has been a reoccurring problem as small businesses in Nigeria have not been adequate supported to develop thus leading to liquidation and thus throwing many people who would have been employed by these small businesses to unemployment or underemployment. The importance of small businesses to any economy cannot be overemphasized as it has been proven by developed economies that the small and medium scale businesses are the bedrock of any economy. The poor performance of small businesses in Nigeria as a result of lack of development has been partly responsible for the present economic recession in Nigeria.
1.3. AIMS AND OBJECTIVES OF THE STUDY
The major aim of the study is to examine the strategies of developing SMEs in Nigeria. Other specific objectives of the study include;
1. To examine the level of funding of SMEs in Nigeria.
2. To know if small business are being provided with a right environment to grow in Nigeria.
3. To determine the impact of funding on the development of SMEs in Nigeria.
4. To examine the role of government agencies on the development of SMEs in Nigeria.
5. To recommend various strategies that can be adopted by the government to promote and develop SMEs effectively.
1.4. RESEARCH QUESTIONS
1. What is the level of funding of SMEs in Nigeria?
2. Are small businesses being provided with a right environment to grow in Nigeria?
3. What is the impact of funding on the development of SMEs in Nigeria?
4. What is the role of government agencies on the development of SMEs in Nigeria?
5. What are the strategies that can be adopted by the government to promote and develop SMEs effectively?
1.5. RESEARCH HYPOTHESES
H0: Government Agencies set-up to promote and develop SMEs have not been effective in the discharge of their duties.
H1: Government Agencies set-up to promote and develop SMEs have been effective in the discharge of their duties.
H0:Government funding on SMEs does not have a significant impact on the promotion and development of SMEs in Nigeria.
H1: Government funding on SMEs has a significant impact on the promotion and development of SMEs in Nigeria.
1.6. SIGNIFICANCE OF THE STUDY
The importance of the development of SMEs in Nigeria cannot be overemphasized. the study would be of immense importance to government at all levels as it would reveal strategies of and the importance of the development of small and medium scale enterprises in Nigeria which can be a sure way of economic recovery and growth. the study would also be of benefit to students, researchers and scholars who are interested in developing further studies on the subject matter.
1.7. SCOPE AND LIMITATION OF THE STUDY
The study is restricted to the strategies of developing SMEs in Nigeria using the bank of industry as a case study.
LIMITATION OF THE STUDY
The only limitation faced by the researcher in the course of carrying out this study was the delay in getting data from the various respondents. Most respondents were reluctant in filling questionnaires administered to them due to their busy schedules and nature of their work. The researcher found it difficult to collect responses from the various respondents, and this almost hampered the success of this study.
1.8 DEFINITION OF TERMS
Business: The Oxford Learner’s Dictionary defines business as a commercial activity, a means of live hood, a trade, profession, occupation, etc.
Capital: capital can be defined s man-made productive asset that are set aside for the production of other assets. In other restricted cases, it is defined as money set aside to start business.
Economic Development: it can define as the process whereby a country’s real per capital gross national product of income increases over a sustained period of time through continuing increases i.e. per capital productivity.
Economic Growth: Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to obviate the distorting effect of inflation on the price of the goods produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment".
Economy: the word is used to mean a particular system of organization for the production, distribution, and consumption of all things people use to achieve a certain standard of living. .
Entrepreneurship: The willing and ability of an individual to seek out investment opportunities in an environment, and an environment, and be able to establish and run an enterprise successfully based on the identified opportunities.
Role: according to Merriam-Webster’ dictionary is defined a function or part performed especially in a particular operation or process or major.
SMEs: Small and medium enterprises or small and medium-sized enterprises (SMEs, small and medium-sized businesses, SMBs, and variations of these terms) are companies whose personnel numbers fall below certain limits. The abbreviation "SME" is used in the European Union and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO). Small enterprises outnumber large companies by a wide margin and also employ many more people. SMEs are also said to be responsible for driving innovation and competition in many economic sectors.
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