THE IMPACT OF CREDIT MANAGEMENT IN OPERATION OF SMALL SCALE ENTERPRISES NIGERIA

Abstract

The study delved into impact of credit management on the operation of selected small scale enterprises in Nigeria. The study examines whether integration of the world economic enhances product development and performance and whether the advent of internet has effect on product innovation in the beverage industry. The survey research design was employed in this study and the questionnaire was the main research instrument. A total of 200 respondents make up the sample size of the study and chi-square was used as the statistical tool to analyze or in analyzing the collected data. The findings of this study revealed that extension of credit to customers is an average for imploring sales of small scale industries. Efficiency in the management of small scale business lies on the way credit is been managed. Furthermore, small scale business credit standard and credit analysis before extending credit to customers.

 CHAPTER ONE

INTRODUCTION

• Background of the study

Private Sector Development as suitable alternative for promoting sustainable and balanced growth in African has attracted considerable attention. Many government and development organizations have focused on the promotion of medium-scale enterprise (SMEs) as a way of encouraging broaden participation in the private sector. The promotion of SMES and especially of those in the informal sector is viewed as a variable approach to sustainable development because it suits the resources in Africa. The contemporary business environment faced with a number of challenges particularly the globalization process is on course is attempt to standardize operation. One the strategies used in coping with globalization is credit management. Credit management refers to those decision variables that influence the amount of trade credit that is, investment in recurable which a business firm may undertake to any given time. It plays a vital role in promoting small scale industries in Nigeria. The promotion of small scale industrial business is well recognized and much better strategies of industries development in developed and developing countries and its ability to enhance entrepreneurial and management skills. In (1973) Nigeria Small Scale Industries Association defines small scale business as those having investment like capital, land, building and equipment up to 60,000 and employing no more-than fifty people. Some scale industries a business could be referring to the sector of economy that is mostly concern with the distribution and marketing both industrial and domestic products. According to Ajonbadi (2002) saying Small Scale Industry is an industry which the total capital employed is over 1.5 but not more than 50 million including working capital of it 100 workers. The research work is to analyze critically the impact analysis of credit management strategies to sector of trade, the problem in managing credit problems and with the aim of finding a lasting solution to the problems and expand the activities of small scale business in the economy in order to arose the attraction both government and individual

1.2 STATEMENT OF THE PROBLEM

Small medium businesses have limitations and problems that account for their failures. All business organization is irrespective of their objectives have philosophy of growth, survival and adaptiveness. (LAWAL, 1993).

The important role which small scale enterprise play in the economics of nations, from the first to the last sage in the developmental countries makes them very relevant in many aspects of economic policies especially those of industrial development. However, the extent to which these enterprises contribute to industrial development depends on the level of growth and development of these enterprises. In Nigeria, just as in most other countries, small scale enterprise are more in number than large scale enterprises. This is not surprising given the nation’s how level of development in both human resources and capital formation. Small Scale Firms like medium firms, however create bulk of the employment provided in the promotion of entrepreneurship and utilization of indigenous technology as well as ensuring even and more appropriate location of industries.