EFFECTS OF SMALL SCALE BUSINESS ON THE ECONOMIC DEVELOPMENT OF NIGERIA (A CASE STUDY OF LAGOS)

EFFECTS OF SMALL SCALE BUSINESS ON THE ECONOMIC DEVELOPMENT OF NIGERIA (A CASE STUDY OF LAGOS)

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

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).

EFFECTS OF SMALL SCALE BUSINESS ON THE ECONOMIC DEVELOPMENT OF NIGERIA (A CASE STUDY OF LAGOS)