Small scale enterprises are expected to play a vital role
towards the development of the economy due to closeness to the
grassroots. But unfortunately they are unable to do this due to lack of
fund. As a result of this, government came up with incentive schemes
to assist them develop their business and the economy in general.
Therefore this project that is organized in five chapter this format
discusses what promoted the researcher to carry out research on this
topic, the aim of the project, the significance, scope, limitations and
delimitation. Chapter two deals strictly on literature review, where
the researcher criticized the works of the authorities in the field,
find out where they conflict and where they are agree. Chapter three
explains the research method adopted. It was in this chapter that we
discuss where we source out data, this location and instrument for
presentation and analysis.
Tables and percentages were used in data presentation while
chi-square (X2) was used to analyse the data collected in chapter four.
Finally, chapter five discusses the conclusions and recommendations.
However it was equally inferred in the work that further research is
encouraged in this topic as the need to trigger off development by
adequately findings the small scale enterprises necessarily name.
TABLE OF CONTENTS
1.1 Background of the study
1.2 Statement of problem
1.3 Purpose of the study
1.4 Significance of the study
1.5 Research questions
1.6 Scale /Area study
1.7 Definition of terms
2.0 Literature Review
2.1 The role of small scale business enterprises
2.2 Advantages of small scale business enterprise
2.3 Problems of small business in Enugu state
2.4 Source of small scale Business finance
2.5 Government policies and incentives
3.1 The design of the study
3.2 Population of study
3.3 Sample /sampling Technique
3.4 Instrument for data collection
3.5 Validity /Reliability of instrument
3.6 Method of data collection
3.7 Method of data Analysis/presentation
Data presentation and analysis
5.0 Summary and conclusion
5.2 Limitation of study
5.3 Suggestion /Area for further studies
Background of study: Many economic analysts in Particular have described
government incentive schemes towards small-scale business in Nigeria
and Enugu metropolis as a well development especially in this
period of low level of economic activity and slow rate of growth of the
economy as well as its devastating effects on the demand for labour.
Undoubtedly the slow rate of economic growth in the state explains why
few job opportunities are available. In most parts of the world, the
importance of small scale business enterprise is not over emphasized in
the process of socio-economic development of the country. It has become
sufficiently clear that large scale enterprises have not and cannot
alone play the dynamic role that they are supposed to play in the rapid
growth and development of the economy, and prominent among these rates
is employment creation and technogical development. Therefore the need
for small-scale enterprises which will supplement the effects of the
large scale business. Small-scale are those business that required very
little capital to set up and to produce goods that will carter for the
needs of the growing population. It is in the light of importance of
small-scale business in Enugu metropolis that government incentive
scheme towards small-scale business will be appreciated.
Incentive in a literal sense implies that which has
motivating influence and serving to incite actions. These incentive
schemes instituted by government provide other non-financial and
financial assistance in the form of loans at affordable interest rate
and grants. It is in the light of the above that nation economic
reconstruction fund (NERFUND) and Nigeria bank for commerce and industry
(NBCI) and other development banks were created.
However, small-scale enterprises have been defined by
various authors in various ways but OSA20 (1984) defined small-scale
business as a productive enterprise which is owned, managed and
controlled by one or two persons or family which influences the decision
making and a well has undifferentiated organization structure but has a
small share of the market with less than fifty (5)) employees. While
central Bank of Nigeria annual report and statement of account (1975)
defined small-scale business as those enterprises with annual turnover
not exceeding N5,00,000.00
Statement of problem
In spite of the recognition of the role of small-scale enterprises in
fortering economic development through the promotion of indigenous
technology, employment generating activities and bordering the
production base of the economy, the impact has not been given adequate
They have been restricted access to institutionalized credit
because banks see them as high risk ventures (Orji 1996) with the
introduction of structural Adjustment programme (SAP) in 1986 and the
inevitable devaluation of Naira, Many small-scale enterprises found it
very difficult to cope with the attendant high production costs as a
result of high cost of imported input and high interest rates.
Therefore, to bridge this observed gap in gap in banks lending to
small-scale enterprises, the Federal government set up the national
Economic Reconstruction Fund (NERFUND in 1989 with aim of providing soft
loans on medium and long term basis to small-scale enterprises wholly
owned by Nigerians.
The question now is, can it be said that the scheme has
made desired impact on the development of small-scale enterprises in
Enugu state? Since there are agencies set up to prove incentives and
grants to small-scale enterprises, therefore the researcher intend to
find out why small-scale business does not thrive in Enugu state. Also
to investigate whether the growth of the economic activity in the state
where these agencies actually providing it only in paper work and not
practically. These are some of the critical issues, which this research
work intends to evaluate; hence the topic evaluation of government
incentives schemes towards small-scale enterprises is given.
PURPOSE OF STUDY
The purpose of this research work is to evaluate government incentive
scheme towards small-scale enterprises with firms in Enugu metropolis
as a case study.
This work will also point out the problem encountered by
the small-scale enterprises in an attempt to receive incentives or loans
from banks and as well investigate whether the incentives when received
are properly put to use or not. This also evaluates the role of
small-scale enterprises towards the development of the state economy.
Therefore the objectives of this work as pointed will be summarized
To examine the problems encountered by small –scale enterprises in Enugu state in attempt to receive loans and incentives.
To determine whether incentives, grants or loans received are diverted or put to proper use.
To identify the government incentive scheme towards small-scale enterprises.
To evaluate the role of the small-scale enterprises towards the development of Enugu state economy.
To make recommendations on proper management of government incentives and small-scale industries.
SIGNIFICANCE OF STUDY
This research work, which aims at evaluating government
incentive schemes towards small-scale enterprises in Enugu state when
concluded, will be of great benefit to the folowing interest groups:
THE GOVERNEMNT: this work will be of great
importance to the government of Enugu state. This is because government
has the interest of their economy at heart and equally they are the
people that set up this incentive scheme and as well finance them
through subventions. Therefore they will be interested granted to the
small-scale enterprises and as well will like to know whether all these
incentive schemes were actually granted to the enterprises. Also they
will want to know whether the small-scale enterprises actually
contributed to the growth and development of the economy.
SMALL SCALE ENTERPRISES: this is another group that
will be interested in this research work. This is because they are the
firm we are evaluating the incentives given to them. Therefore, they
will like to know how best to put to use the incentive received from
government and as well know the best way to approach government in order
to get more incentives from them and what the government expects from
them when they receive such incentives.
RESEARCH STUDENTS: it will be of great importance to
research scholars who may want to investigate or research further on
this topic. It will serve as a source of reference to this researcher
and will help the students to know where to locate data, source of data
and how to present the research work. This implies that it will make
further research very simple
GENERAL PUBLIC: this work will equally be of great
interest to the general public because they will like to know how
small-scale enterprises contribute to the growth and development of the
economy, which affects them. They are potential investors who can be
influenced into going into small-scale enterprises due to the incentives
which government gives to help them growth.
The research is translated into questions of which when
Answered will provide the detail solution to the problem of study.
For this purpose of this research work, the following questions will be
asked and answered.
What are the problems encountered by small-scale enterprises in an attempt to receive loans and incentives in Enugu state?
What are modalities of receiving grants and incentives by small-scale enterprises and are the grants put in to other uses?
Is the government incentives scheme set up to help small-scale enterprises?
What are the roles of small-scale enterprises towards the development of the state economy?
SCOPE/AREAS OF STUDY
This work is meant to cover the totality of the small-scale
enterprises in Nigeria, but due to the fact that small-scale
enterprises are scattered all over the country thereby making it
difficult within the time frame, the researcher therefore decided to
limit the work to some selected small-scale enterprises within Enugu
metropolis. The emphasis will be the modalities of receiving incentive
grants and subventions from government incentives scheme and how the
incentive were put to use towards the development of the state economy.
DEFINITION OF TERMS
INCENTIVE: this is defined as anything capable of motivating an individual or organization into greater performance.
SMALL SCALE ENTERPRISES: This is business that is
produced in small-scale, owned, managed and controlled by one or two
persons with staff strength less than 50 and control a small share of
NERFUND: national Economy Reconstruction fund is one of the credit schemes that provide soft loans to small scale enterprises
CREDIT: These are loans given to individuals, organizations, on agreed terms which boast their working capital.