ABSTRACT
This research study investigated the
impact of microfinance on entrepreneurial development of small scale
enterprise that are craving for growth and development in a stiffened
economy called Nigeria. In an attempt to provide a basis for the
research, a background of the study is provided and accompanied by a
review of related literatures. A case study of small- scale enterprises
in Lagos State, Nigeria was also undertaken in which questionnaire was
administered on selected small- Scale enterprises on the object of this
study. Tables and simple percentages were used in data presentation.
Available evidence shows that the
bed rock of any nation's industrial development is entrepreneurial
activities. Unfortunately, there is uneasy access to conventional loan
from the commercial banks to start up a small or medium Scale
enterprise. The resultant effect is that the underdevelopment situation
of the country is getting worse while government seems incapable of
taming the ugly incidence.
The evolution of microfinance is to
break/he bam-ode to access capital by low income individuals for
developmental purpose. To say that microfinance empowers the
entrepreneurial spirits that exist among Small- Scale Entrepreneurs
worldwide is not an exaggeration. Micro finance has the ability to
strengthen micro enterprises and encourages best practices among
operators of small and medium scale enterprise.
With the objective to determine
whether or not, the activities of micro finance institution have played
significant role in entrepreneurial development Nigeria an hypothesis
testing procedure based on the Chi-square test is adopted as the method
of data analysis the result of the test an appropriately interpreted,
relevant conclusion are inferred and some recommendations are equally
provided
CHAPTER ONE
1.0 Introduction
1.1 Background to the Study
The issue of sustainable development in
the Third World countries like Nigeria has been a growing concern to
both the government and the private sector. The huge amounts of money
the government has been investing on this platform over the years have
not yielded any meaningful result. Poverty is a characteristic of
Nigerian households or individuals. It has been realized in the recent
years that there are limits to which government can singly promote
development. Most of the traditional functions being carried out by the
government in most countries ranging from the provision of economic
development are becoming increasingly difficult to accomplish. Nigeria
as a nation has her own peculiar developmental challenges because of
maladministration, corruption, infrastructural decay, insecurity of
lives and properties, unstable macroeconomic regime and unpredictable
fiscal policies by successive administration (Fasua 2008).
Thus, both the public and private
sectors of the economy and every segment of the society need to be
involve in the industrial development process of the country it is on
this basis that government begins 10- engage in privatization policy
within the view of allowing the private sector participate in the
economic development of the
nation. Consequently, various
governments of the nation begin to find pathways to involve the private
sector in the developmental process of their country's economy.
One of the responses challenges of
development in the developing countries IS the encouragement of
entrepreneurial development scheme. Nigeria had even taken a more
strongly robust stop by including entrepreneurial studies in the
academic curriculum of her educational system. The believe of such
policy makers is that such decision will inculcate to fix an idea into
someone's mind entrepreneurial spirit in the mind of people so as to
prepare them for wealth creation through small scale enterprises (Fasua
2006). Small scale enterprises are very crucial to the development of a
country's economy, especially countries like Nigeria. Entrepreneurship
brought about fact that provides a strong base for something. It is
bedrock of any nation's industrialization.
A number of studies have been carried
out on the impact of micro finance on entrepreneurial development is
evidenced by the fact that some academic journals have devoted special
issues to research establishing this linkage. Some scholars focused on
the mechanism by which poverty is reduced. Amin, Rai, and Topa (2003)
their article on the ability of micro finance to reach the poor and
easily named (vulnerable)
They focus their article in such a
manner because of concerns that micro finance is only serving people
slightly below or above the line of poverty, however the really poor and
destitute having no money, no home, no food etc. are being
systematically excluded, By contrast something that is very life to
something else, a very notable difference between Copestake, Halokra and
Johnson (2001) analyse the impact of micro finance on firm and
individual wellbeing. Cope stake at all focus on business performance
and household income to establish a link between the availability of
micro finance and overall wellbeing of the poor.
Evans and Adams (1999) approach the
microfinance question at a slightly different angle. However, they seek
to explain non participation in the microfinance evolution, stating that
while micro finance is used as a viable instrument in fighting poverty,
more than 75% of the poor individuals choose not to participate for
various reasons.
Ryne and Holt (1994) provide a
meta-analysis of microfinance and focuses on women empowerment,
intending to show while various studies conflict in their conflict in
their conclusions as to the impact of micro finance bank on women
empowerment, Park (2001) evaluation the actual micro finance programs in
china using three(s) keys measure (targeting), sustainability and
overall impact).
Thus both research and practice have
seen an increasing concern about the impact of micro finance. In spite
of this emphasis, current research did not provide sufficient
justification for the link between micro finance and entrepreneurial
development in the developing countries. Besides, the empirical
evidences emerging from various studies about the effect of micro
finance on entrepreneurial development have so far yielded mixed results
that are inconclusive and contracting, thus, the question of whether
micro finance improve or worsens entrepreneurial development is stills
worthy of further research such as the one being undertaken in this
study. In addition, the impact of microfinance on entrepreneurial
development has not received adequate research attention in Nigeria.
Research also shows most of the studies on impact of microfinance on
entrepreneurial development that have .been reported were carried out
industrialized countries. This means that there is a major gap in the
relevant literature on developing countries including Nigeria, which has
to be cured by research.
This research attempts to fill this gap
by studying the situation of Nigeria and providing more empirical
evidence on the effects of micro finance on entrepreneurial development,
1.2 Statement of the Problem
The role of entrepreneurial in the
development of Nigeria cannot be ruled out. Entrepreneurial is sire qua
non to national development, poverty eradication and employment
generation. It is the bedrock of any nation's industrialization.
The importance of micro finance to
entrepreneurial development made the Central Bank of Nigeria adopted it
as the main source of financing entrepreneurship in Nigeria. Despite
this, however finance is still considered as one of the major hindrances
to entrepreneurship in Nigeria (Ubom, 2003). While government and
non-government organizations (NGOs) have been engaging a number of
programmes and policies to encourage entrepreneurship in the country.
Nigeria is still on the list of the poorest countries in the world with
unemployment level rising alarmingly. It is therefore necessary at this
junction to undertake an assessment of the extent to which microfinance
can impact entrepreneurial development in Nigeria.
l.3 Objectives of the Study
The broad objective of the study is to evaluate the impact of micro finance on entrepreneurial development in Nigeria.
Other Specific Objectives are to:-
1. Evaluate the importance of entrepreneurial activities to the sustainable development of Nigeria.
2. Evaluate the challenges of accessibility to capital for development of entrepreneurship in Nigeria.
3. Evaluate the relationships that exist between small scale business and micro finance bank.
l.4 Statement of Hypothesis
The null hypothesis (Ho) will be set
against the alternate hypothesis (HI) in the study. This will call for
either to reject or accept the hypothesis. The following shall be
tested.
1. Ho: There is no significant difference between small scale enterprises who use micro finance and those who do not in Nigeria.
HI: There is significant difference between small scale enterprises w40 use micro finance and those who do not in Nigeria.
ii. Ho: There is no significant
effect of micro finance institutions activities In predicting
entrepreneurial productivity.
HI: There is significant of micro finance institutions activities in predicting entrepreneurial predicting in Nigeria
iii. Ho: That micro finance institution activities IS not effective In predicting entrepreneurial development.
HI: That micro finance institutions activities IS effective In predicting entrepreneurial development.
1.5 Justification of the Study
The focus of the study is to investigate
the impact of micro finance on entrepreneurial development of small
scale enterprises that are strong desire craving for growth and
development in a suddenly stop moving, especially when world real fact
stiffened economy called Nigeria. The study is therefore rational and
important at the time the country is tailoring herself toward a
self-reliance economy. In view of this, the study is imperative because
it will show the way.
Firstly, to increase the productivity' and Income of vulnerable groups, especially women and the poor.
Secondly, to create employment and Income opportunities through the creation and expansion of micro enterprises.
Thirdly, to improve the standard of
living of the citizens and push the economy of Nigeria towards
industrialization. Therefore the role of entrepreneurship cannot be
overemphasized it could be realized that several studies concluded so
far indicated that finance constitute the major problem of
entrepreneurship developed in Nigeria. How then this problem could be
eradicated or minimized because the success of the firm will enhance the
pace of economic recovery and growth.
There is no doubt the result of this
study will be useful to the existing and prospective small scale
enterprises in the country, general public, those willing to There is no
doubt the result of this study will be useful to the existing and go
into the small scale business and others.
1.6 Scope and Delimitation of the Study
The study focuses on the impact on micro
finance on entrepreneurial development. The study will be limited to
small scale enterprises using Lagos state as III proxy to captured
Nigeria.
1.7 Organization of the Study
The study is divided into 5 sections for
easy exposition. Chapter one: deals with the general introduction of
the case study which include essence of entrepreneurial development
Chapter two: is concerned with the review of relevant literature.
Chapter three: deals with the research methodology to provide a
background to the study. Chapter four: with centre on the analysis and
presentation as well as interpretation of data gathered. Chapter five:
Is the summary, conclusion and recommendations.