EXPLORATION AND EXPLOITATION OF SOURCES OF FUND AVAILABLE TO SMALL AND MEDIUM SCALE ENTERPRISE

ABSTRACT

The main purpose of this study is to identify, explorate and explorative the sources of funds available to the small and medium scale enterprises in Enugu State. To do this, data were collected from both primary and secondary sources. The main instrument of data collection was the questionnaire. The data were presented in tables as frequency, distribution in the data analysis, the techniques of percentage frequencies were used, the hypothesis were tested with Chi-square technique as 52 level of significance. The research work of exploration and exploitation of sources of fund available to SMEs in Enugu states is carefully prepared to strength into the sources of funding SMEs fro employment opportunities growth and development of the state and Nigeria at large. SMEs is the engine of economics growth and for promoting equitable development. As a result of this, radical decisions and recommendation encountered in financing SMEs, like quality of human resources, favorable macrocosmic environment, adequate infrastructural facilities, access to capital and access to market information  and technology for growth and development.

CHAPTER ONE

INTRODUCTION

1.10BACKGROUND OF THE STUDY

Small and medium scale enterprises (SMEs) occupy a place of pride in virtually every country of state. Because of the significant roles SMEs play in the growth and development of various economics, SMEs have aptly been referred to as “the engine of growth” and “catalysts for social-economic transformation of any country” SMEs represent a veritable vehicle for the achievement of national economic objectives of employment generation and poverty reduction at low investment cost as well as the development of entrepreneurial capabilities including indigenous technology. Other intrinsic benefit of vibrant SMEs include access to the infrastructure facilities occasioned by the existence of such SMEs in their surroundings, the stimulation of such SMEs in their surroundings, the stimulation of economics activities such as suppliers of various items and distributive trades for items produce and or needed by the SMEs, stemming from rural urban migration, enhancement of standard of living of the employees of SMEs and their dependants as well as those who are directly or indirectly associated with them. Supporting these facts, Ajose (2010) states that, SMEs are the pivot of economics growth and first point of contact for the business world.

Small and medium scale enterprises (SMEs) are a very heterogeneous group of business usually operating in the services, trade agri-business, and manufacturing sectors. They include a wide variety of firms such as village handicraft makers, small machines shops and computer software firms that possess a wide range of sophistication and skills. Some are dynamic, innovative, and growth-oriented while others are satisfied to remain small and perhaps family owned. SMEs usually operate in the formal sectors of the economy and employed mainly wage-earning workers. SMEs are often classified by the number of employees and/or by the value of their assets. The size classification varies within regions and across countries relative to the size of the economy and its endowments. It is important to not that there is a minimum as well as a maximum size for SMEs (inegbenebor, 2006).

SMEs have played and continue to play significant roles in the growth, development and industrialization of many economics the world over. In the case of Nigeria, SMEs have performed by low expectation due to a combination of problems which ranges from attitude and habits of SMEs them selves through environmental related factors, instability of governments and frequency government policy changes. The supportive business environment for SMEs is still weak in Nigeria. The SME support programmes are poorly coordinated and lack the necessary coverage to reach all sectors of the small business community. Almost al micro finance institutions (MFIs) are supposed to cater for those enterprises with credit lending. However, project lending and risk capital for SMEs is virtually unviable. The private equity and venture capital funds embellished in Nigeria are few and later primarily to the needs of expansion of established business and privatized companies.

However, as Hallberg (2000) observes, government assistance strategies in both development and developing countries often try to achieve a combination of equity objectives (alleviating poverty and addressing social, ethic and gender inequalities ) and efficiency objectives (rising the productivity and profitability of firms). Like wise, Ojo (2003) argues that all these SME assistance programs have failed to promote the development of SMEs.