The topic of this research work is geared towards the impact of small business in Enugu Urban Area of Enugu state. The aim of this study is to examine and identify in detail the problems, prospects, effects and the importance of the development of small business in the area under study. This work has five chapters, with each chapter focusing in a specific objective. Chapter one talks on a brief history of small scale business, chapter two highlights other researcher’s work on small scale business in Enugu Urban Area, past reforms aimed at small scale businesses and problems encountered by small scale business. The exploratory research method was used in the course of the research. Chapter four interprets data analysis gathered using percentages and chi-square techniques. Small scale firms are not given the desired as well as required attention by government and its agencies hence favorable conditions (like helpful government policies and adequate supply of capital) are needed for the growth of the small business as they are an integral part of economic growth and development of any nation.

TABLE OF CONTENT

Title page……………………………………………………………… i

Approval page………………………………………………………… ii

Dedication…………………………………………………………….. iii

Abstract……………………………………………………………….. iv

Acknowledgement…………………………………………………….. v

Table of Content………………………………………………………. vi

CHAPTER 1: INTRODUCTION

1.1 Background of study……………………………………………. 1

1.2 Statement of the problem……………………………………….. 3

1.3 Objectives of the study…………………………………………… 4

1.4 Research questions………………………………………………. 5

1.5 Research Hypothesis…………………………………………….. 5

1.6 Significance of the study………………………………………… 6

1.7 Scope of the study……………………………………………….. 7

1.8 Limitation of the study………………………………………….. . 7

Reference

CHAPTER 2: LITERATURE REVIEW

2.1 Overview of small scale business………………………………… 10

2.2 Conceptual framework…………………………………………… 11

2.3 Theoretical framework……………………………………………. 13

2.4 Review of past reforms aimed at rural development……………… 16

2.5 Problems encountered by small scale business in Enugu and Nigeria as a whole………………………………………………………………. 23

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction………………………………………………………. 28

3.2 Research design………………………………………………….. 28

3.3 Sources of data…………………………………………………… 29

3.4 Data analysis……………………………………………………… 30

3.5 Population of study……………………………………………….. 31

3.6 Sample design and determination of sample size………………… 31

3.7 Assumptions of CHI Square……………………………………… 34

Reference

CHAPTER 4: DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 Introduction……………………………………………………….. 37

4.2 Analysis and presentation of data from four (4) branches of Hians Technology Limited……………………………………………………………. 37

4.3 Testing of research hypothesis and interpretation………………… 46

CHAPTER 5: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Introduction……………………………………………………….. 53

5.2 Summary of findings……………………………………………… 53

5.3 Conclusion………………………………………………………… 55

5.4 Recommendation………………………………………………….. 56

5.5 Recommendation for further studies……………………………… 57

Bibliography……………………………………………………… 58

Appendix….……………………………………………………… 60

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The sub-sectors of the industrial sector are the Small and Medium Scale Enterprises which play crucial roles in industrial development (Ahmed S. 2006). Sequel to the adoption of Economic reform programme in Nigeria in 1981, there have been several decisions to switch from large scale industrial projects and capital intensive which was based on the import development philosophy to Small and Medium Scale Enterprises which have better prospects for developing domestic economy, thereby generating the required goods and services that will propel the economy of Nigeria towards development. Most of the world renowned companies and organizations started as a small scale business with skills and efforts they grew up to the conglomerated and multinational companies of today. Small scale business occupies a unique position in the economy of any nature and they are the bedrock of any economic development. They constitute of the cornerstone of any competitive economy and by far outnumber the large scale business. Also, they provide large scale business, more fertile ground for creativity and entrepreneurship. Hence, as a result of easy entry into the market, small scale business spring up all the time keeping the competition environment lively, a phenomenon that leads to productivity gains and real economic growth, apart from the fact that they generate employment opportunities, they are closer to the grass root and so on, ginger rural development. They are less capital intensive and do not require gigantic infrastructure for their operation. Being part of the economic system, small business entities are faced with numerous problems, particularly funding and many ways these are very different from the financial problems on large concern. However, the principles underlying financial decision are similar irrespective of the size of the business, hence, the basic goal so financial management through acquisition, anticipation and allocation of funds equally apply to small scale business. It is widely known in business circles that small scale business find it difficult to secure funds from financial institutions due to the fact that they have difficulty in meeting the collateral requirement that would qualify them for the financial assistance from the back. This is not withstanding every business whether small or large needs funds. Funds constitute the life blood of any business while other things follow. Small scale business serves as an engine room for economic development and government recognize the fact that small business is the second largest employers of labor apart from government. Government is also encouraging the establishment of small scale business by forming such bodies like Small and Medium Enterprises (SME). For instance, in any depressed unemployment is the increase, where the available resources are under-utilized and where raw-material supply to our big industries is inadequate, establishment of small scale business is considered as an alternative means of earning a living and providing raw-materials to our big industries.

1.2 Statement of the Problem

There is no doubt that small and medium scale enterprises are the principal catalyst of entrepreneurship and it constitute the real fabric of nation’s economy. And to say that the present and future economic advancement of this out great country- Nigeria lies in the dynamics and growth of the Small and Medium Scale (SME) is not an overstatement.

SMEs constitute a vital force to economic growth and development (Onuoha 1994:1). Economic development is a nation-wide problem which the small scale industries are capable of solving effectively these includes:

1. Development of raw materials

2. Sourcing of raw materials

3. Providing training venues for workers and students on industrial attachment.

4. Problems of capital for large establishment

5. Unemployment

In the light of the above mentioned problems, the fact that small scale business are vital for economic development of any country, state or local government and numerous problems which small scale business are capable of solving motivated me to research or write on this topic.

1.3 Objective of the Study

The study intends to investigate various problems associated with the development of small scale business enterprise in Enugu Urban Area such as:

To discover and determine the factors militating against the growth and development of small scale businesses in Enugu urban area.
To determine if Government render financial assistance to small scale business in Enugu Urban
To ascertain and examine the management practice and sources of fund whether government policies/assistance, manpower and provision of capital have any influence on the entrepreneur in the growth of small scale industries.
To make recommendation based on the findings which will be of great help to potential entrepreneurs

1.4 Research Question

To solve the research problems, the following questions will be asked:

What are the factors militating against the growth and development of small scale businesses in Enugu Urban Area?
Does government render financial assistance to small scale businesses?
What is the nature and extent of Enugu State Government control assistance/policies over Small Scale Businesses?

1.5 Research Hypothesis

Research hypothesis is a tentative answer to a set of research questions. It can be summed as intelligent guesses as answers without evidences to the problems of research under investigation. Considering the nature of this research, the following hypotheses are proposed in their Null (H0) and alternative (H1) forms would be pursued to arrive at our conclusions and recommendations.

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0: Small scale businesses do not have any factor militating against its growth and development in Enugu Urban area.

H1: Small scale businesses do factor militating against its growth and development in Enugu Urban area.

H0: The growth of small scale businesses do not depend on government policies/assistance in Enugu.

H1: The growth of small scale businesses depend on government policies/assistance in Enugu.

H0: Government does not have any position towards assisting, promoting and stabilizing small scale business in other to unlock value chain approaches to Enugu urban economic boom.

H1: Government does have any position towards assisting, promoting and stabilizing small scale business in other to unlock value chain approaches to Enugu urban economic boom.

1.6 Significance of The Study

This study is very beneficial to groups of people such as:
1. The small scale entrepreneur as it will help them to know how to solve the economic problems.

2. Student of business studies of higher institutions of learning as this will serve as reference work and guide for further research work.

3. The state government as this will enable them to know the roles in which the small business played in the development of the state.

4. The state government will through this study know the problems facing the small scale business and the suggested solutions

1.7 Scope Of The Study

This research intends to consider the development of small scale business in Enugu State (Hians Technology Limited). The study would also highlight a wider view of problems encountered by small scale business in Enugu State and make recommendation on findings.

1.8 Limitation Of The Study

The study covers effects of small scale business on the economic development of Enugu State. The researcher encounters some constraints which limited the scope of the study;

a) Availability Of Research Material: The research material available to the researcher is insufficient, thereby limiting the study

b) Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

DEFINITION OF TERMS

Small scale business: A small scale enterprise is a privately owned and operated business, characterized by a small number of employees and low turnover. A small enterprise usually only shares a tiny segment of the market it operates in.
Entrepreneur: This is someone who exercises initiative by organizing a venture to take benefit of an opportunity and, as the decision maker, decides what, how, and how much of a good or service will be produced.

Capital: This is the amount of money required to carry out a particular venture and pay all the financial obligation of the business. Development: This is the process or the ability to make something to be advance or organize for the benefit of all sundry.

Economic development: This is the process by which a nation improves the economic, political and social well-being of its people.