AN EVALUATION
OF GOVERNMENT INCENTIVES SCHEMES TOWARDS SMALL SCALE.
(A CASE STUDY
OF SOME SELECTED SMALL SCALES FIRMS IN ENUGU
METROPOLY)
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
CHAPTER ONE
INTRODUCTION
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 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.
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.
RESEARCHER QUESTIONS
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 the market.
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.