PROMOTING SMALL- SCALE INDUSTRIES THROUGH CO-OPERATIVE SOCIETIES WITH SPECIFIC REFERENCE TO WOMEN PARTICIPANT IN NKANU EAST LOCAL GOVERNMENT AREA OF ENUGU STATE

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

Nigeria‘s economy is dominated by small and medium scale enterprises in agriculture, manufacturing, commerce and industry, services, etc. The historical background of small and medium scale enterprises in Nigeria can be traced back to 1946 when the essential paper No. 24 of 1945 on â€•A Ten year plan of development and welfare of Nigeria was presented (Ever since, SMEs have gained prominence and mention as a seed bed of innovations, inventions and employment generation or creation (Aremu and Adeyemi, 2010:45). SMEs in Nigeria are seen as the backbone of all economies and are a key source of economic growth, dynamism and flexibility. A study done by the Federal Office of Statistics shows that 97% of all businesses in Nigeria employs less than 100 employees, implying that 97% of all businesses in Nigeria are, to use the umbrella term, "small businesses". The SME sector provides, on average, 50% of Nigeria‘s employment, and 50% of its industrial output.

Indeed, there appears to be an agreement that the development of SMEs in Nigeria is a step towards building a vibrant and diversified economy (Mahmoud, 2005:87).This explains why successive Nigerian governments have been spending an immense amount of money obtained from internal and external funding institutions for entrepreneurial and small business development programmes. Previous initiatives designed to assist SMEs in Nigeria included; Mandatory minimum credit allocation by banks to small scale enterprises; the World Bank SME I and SME II loan programmes, the Agricultural Credit Guarantee Scheme Fund (ACGSF) and the Small and Medium Industries Equity Investment Scheme (SMIEIS). The most ambitious move ever made by the government was the establishment of the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) to facilitating access to credit, technology and market for the SMEs (Ogboru 2007:76).

Women form the majority in the rural areas, and are involved at all stages of agricultural enterprises, responsible for about 80% of all food items produced (Rahman, 2004:93) and 70 percent of food production and 50 percent of the domestic food storage in the country (Ritche, 2006:88).

In addition, they form an active and reserve labour force but they rarely own the means of productions (Rahman 2004:71-73) suggesting that the position of women in agricultural development cannot be over emphasized. Cooperatives have been regarded as one of the main institutional machineries for empowering the economically weak members of the society.

Cooperatives are able to promote economic and social development because they are commercial organizations that follow a broader set of values than those associated purely with the profit motive. Cooperatives play an important role in job creation by directly providing self-employment to members and service provision for non-members. Enterprise development and particularly the promotion of small and medium enterprises, has been adopted as a prerequisite and a strategy for job creation and economic growth in a large number of countries (Essien, 2000:33).

Despite the availability of cooperative societies and efforts of government at all levels, it appears that a significant proportion of rural women are either unaware of the existence of such co-operative societies or are lacking in the basic socioeconomic characteristics that form the prerequisite for participation in such activities (Idrisa et al., 2007:45-46). In some cultures, women are restricted from conducting business independently or without their husband„s consent. This poses a serious challenge to participation in cooperative activities. Even though in some cases women’s legal rights may be stipulated in a cooperative they may not necessarily be enforced or they may be superseded by customary law. It is in line with this view that Ashanti (2002:24) observed that lack of social, economic and legal rights explains women's low participation in cooperative decision-making and leadership positions.

Besides cultural issues, women, especially in developing countries, are confronted by formidable constraints that block their active participation in cooperatives most especially, the traditional role of women in society and the prevalent misconception that women's reproductive and domestic responsibilities constitute their main role. However, Eboh (2009:67), recognized that despite womenâ€Ÿs major responsibilities in the household health and nutrition, womenâ€Ÿs role in agriculture cover all facts of agribusiness including food production, livestock production, fishery as well as farm management. But many believe that these efforts of government have generally yielded poor results (Ogboru 2007:54). Given the large domestic market and plethora of raw materials in Nigeria, there is little progress in terms of manufacturing value-added products, either for import substitution, exports, or employment creation. The small holder agricultural has also not fared better and the country spends millions of dollar to import food and other vital products and services. Nigerian SMEs have not fared particularly well because of hostile operating environment among other challenges.

Aremu and Adeyemi (2010:20) stated that most SMEs in Nigeria die within their first five years of existence due to insufficient capital, lack of focus, inadequate market research, over-concentration on one or two markets for finished products, lack of succession plan, inexperience, lack of proper book keeping, irregular power supply, infrastructural inadequacies (water, roads etc), lack of proper records or lack of any records at all, inability to separate business and family or personal finances, lack of business strategy, inability to distinguish between revenue and profit, inability to procure the right plant and machinery, inability to engage or employ the right calibre staff, cut-throat competition.

1.2 Statement of Problems

The non-delivery of satisfactory results by the past SME development efforts has made it imperative to identify other institutional arrangements that could provide a more satisfactory result. One of such institutions is the cooperative. Nigerian cooperatives like cooperatives in other climes have always played a key role in the promotion and development of SMEs. Indeed, promotion and support of business enterprise of members and jointly owned business are at the core of cooperative functional activities. However, this promotional engagement is often neglected since policy makers often see cooperative as simply a channel for poverty alleviation and rural development and relates to them as such. Thus, they are yet to come to terms with the fact that cooperatives are first and foremost businesses and business promotion agents whose potential capabilities could be utilized to further promote SMEs.

1.3 Objectives of the Study

This research work titled “Promoting Small- Scale Industries through Co-operative Societies with specific reference to women participant in Nkanu East Local government Area of Enugu state. The specific objectives of this research work includes the following;

1. To examine the role of cooperative societies in the development of small scale industries in Nkanu East local government area.

2. To evaluate the effect of women participation in cooperative in the development of small scale industries in Nkanu East Local Government Area.

3. To ascertain the extent of women participation in cooperative and its impact on the development of the society.

4. To determine the challenges faced by cooperative societies in the development of small scale industries in Nkanu East Local Government Area.

5. Proffer possible solutions to the problems identified.

1.4 Research Questions

Based on the above objectives the researcher developed the following research questions;

1. What are the roles of cooperative societies in the development of small scale industries in Nkanu East local government area?

2. To what extent does women participation in cooperative affect the development of small scale industries in Nkanu East Local Government Area?

3. To what extent does women participation in cooperative impact on the development of the society?

4. What are the challenges faced by cooperative societies in the development of small scale industries in Nkanu East Local Government Area?

5. What the possible solutions to the challenges faced by cooperative societies in the development of small scale industries in Nkanu East Local Government Area?

1.5 Significance Of The Study

This research work will be of immense help to:

¨ The researcher: It will help the researcher to know more on how small- Scale Industries can be promoted through co-operative societies with specific reference to women participant in Nkanu East Local government Area of Enugu state.

¨ Cooperative societies: It will also be of great importance to cooperative societies in Nkanu East Local government Area of Enugu state as it will enrich their knowledge on the benefits and usefulness of women participant in the development of small scale industries.

¨ Small Scale industries: This research work will equally be of immense help to the small scale industries in Nkanu East Local government Area of Enugu state as it will serve as an eye opener on the relevant of cooperatives societies and women participant in the development of the industry.

This study will be of great importance to the country Nigeria as it will help the policy makers to politicize laws that will guide cooperative society in the country as it will help in the development of small scale industries as well as the development of country.

1.6 Scope of the Study

This study focuses on Promoting small- Scale Industries through co-operative societies with specific reference to women participant in Nkanu East Local government Area of Enugu state.

1.7 Limitations of the Study

The researcher in carrying out this study encountered numerous problems, which includes:

¨ FUND – This included lack of enough fund to move around and visit the study area which is Nkanu East Local Government Area, the researcher has to visit the area more than two times, the researcher equally needed enough money to source material which constitutes an impediment. High cost of transportation in the city due to long distance also imposed its own limitation on the researcher.

¨ LACK OF RESEARCH MATERIALS: lack of research materials was also one of the problems faced by the researcher in the cause of this research work.

¨ RESPONDS OF THE RESPONDENTS: Another constraint to the researcher is that some of the respondents found it difficult to express their view with regards to the subject matter.

From the above points the researcher tried her best to carry out a detailed study on Promoting small- Scale Industries through co-operative societies with specific reference to women participant but the above constraints have limited the researcher to only Nkanu East Local government Area of Enugu state.

1.7 DEFINITION OF TERMS

To make this research clearer and understandable, some terms are defined by the researcher to make the research comprehensive.

Small Scale industry: These are those whose annual turnover does not exceed N200,000,000 or capital expenditure does not exceed N200,000,000. (CBN).

Cooperative: This is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise(ICA, 1995:34).

RURAL AREA: This connotes the interior or remote parts of the local government which the central government wants to develop by creating local government. (Aremu, (2010:42).

RURAL DEVELOPMENT: Deriving from our understanding of what development is then, that part of development that seeks to enhance the quality of life in the rural areas by providing basic infrastructural facilities. (Develtere, 2008:28).

LOCAL GOVERNMENT: The third tier of government with in the state charged with the responsibility of development and administration of the people at the grass root level. (Ejeakanonu, 2007:89)