Business in Nigeria has been classified as small, medium or large. In both the developing and developed countries, the government is turning to small and medium scale industries as a means of solving problems. It is also a seed bed of innovations, inventions and employment generation/creation. Hence all the levels of government at different times have policies which promote the existence of small scale businesses in Nigeria. Small scale orientation is part of Nigerian history. Historical fact shows that small and medium scale industries control the economy today. Findings by economists over the years shows that small firms and entrepreneurs plays a much important role in economic growth and development of our country in which our rural areas have participated from. Effect of cooperatives in development of small scale industries in Udi local government area of Enugu state cannot be overemphasized. Udi local government is one of the local governments that made up Enugu state which came into existence as a result of metamorphosis of the eastern region. Cooperative movement in Enugu state dates as far back as early 1960`s under the eastern regional council.

The study area is highly populated with different calibers of people with different social background, different languages, predominantly Igbo language. Cooperatives have immensely contributed to the development of small scale industries due to its positive contributions, many types of cooperative societies which includes all types of auxiliary cooperative societies were established which includes transport cooperatives, cooperative insurance productive cooperatives, agricultural cooperative and multipurpose cooperative societies.

1. STATEMENT OF PROBLEMS

Cooperative societies exist in many states, communities and nations as a whole. Cooperatives have really contributed to the development of small scale business in Nigeria though there are some problems which they encounter which have really impeded their speed and contributions. Some of these problems include lack of skilled and trained labour force, inadequate infrastructures, the impact of vicious circle of poverty etc. therefore government is turning to small and medium scale industries as a means of economic development and a sure means of solving the problem.

In this research work, the researcher aims at identifying the factors that affects smooth running of small scale industries in udi local government area. It has been observed that despite government effort to see the unemployment problems solved in the country, their various programs to help citizens to be self reliance have failed. Cooperative now is the available and most appropriate option to solving this problem.

1. OBJECTIVE OF THE STUDY
Analyze the socio- economic profile of the Cooperatives
Examine the contributions of the Cooperatives to Small Scale Industrial Development.
Estimate the effects of Cooperative activities on Small Scale Industrial Development.
Assess sources of funds to the Cooperatives.
Analyze and prioritize constraints militating against Small Scale Industrial Development by Cooperatives.
Make Recommendations based on findings.

1.4 RESEARCH QUESTION

In what ways have cooperated contributed to the development of small scale industry?
What are the effects of cooperative activities on small scale industrial development?
What are the sources of fund opened to cooperatives.
What are the constraints militating against small scale industrial development of cooperatives.
Recommendations

1.5 SIGNIFICANCE OF THE STUDY

The importance of the study lies on finding and addressing the issues that would help small scale industries and business enterprises on how to manage their business for effective impact and productivity. It also aims at disclosing some strategic areas in which the established small scale industries in the rural areas have contributed positively to the lives of the populace there. If government policy makers and the general public will make good policies to favour these small scale industries, it will create a great advantage for the communities and produce better business oriented people. The study will also enlighten the business oriented owners and the cooperatives on the proper way to manage their businesses and government knowing the areas where their assistance is needed for better and more business adventure and productivity.