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AN EVALUATION OF GOVERNMENT MOTIVATION SCHEMES TOWARDS THE DEVELOPMENT OF SMALL SCALE ENTERPRISES

ABSTRACT

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. I send my very sincere thanks across the space.  May we remain blessed?

Chime Benedette O.

TABLE OF CONTENTS

Title page

Approval Page

Dedication

Acknowledgement

Abstract

Table of content

CHAPTER ONE

1.0     Introduction

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

CHAPTER TWO

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

CHAPTER THREE

3.0     Methodology

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

CHAPTER FOUR

Data presentation and analysis

CHAPTER FIVE

5.0     Summary and conclusion

5.1     Recommendations

5.2     Limitation of study

5.3     Suggestion /Area for further studies

Conclusion

Reference

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 technological 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 fostering 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 recognition.

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 thus:

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.

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