ABSTRACT
The study
examines the entrepreneurial finance and its effects on the performance of
small and medium enterprises in Oyo state. The study aimed at identifying the
effect entrepreneurial finance would have
on the performance of small and medium scale enterprise. A total
structure of 50 questionnaire were distributed to entrepreneur of the selected
area. The hypotheses were tested using statistical chi square method. The
results of the empirical findings shows that small and medium scale enterprise
has no significant contribution to the development os small and medium scale
enterprise. The findings also shows that sources of finance contribute to the development
of small and medium scale enterprise. The study therefore recommend that financial
institution should be encourage to make fund available for new business
innovation. They should also b encourage to allocate more credit to small and
medium scale business in Nigeria.
Keywords: entrepreneurial finance, small and
medium scale enterprise.
TABLE
OF CONTENTS
Title
page i
Certification ii
Dedication iii
Acknowledgements iv
Table
of contents v
Abstracts ix
CHAPTER
ONE: INTRODUCTION 1
1.1 Background
to the Study 1
1.2 Statement of Research Problem 2
1.3 Objective of the Study 3
1.4 Research Hypothesis 3
1.5 Scope and Limitations of the Study 3
1.6 Significance of the Study 3
1.7 Definition of Operational Terms 4
CHAPTER
TWO: LITERATURE REVIEW 5
2.1 Conceptual Literature 5
2.1.1 Performance of Small and
Medium Scale Enterprise (SMEs) 6
2.1.2 Business Performance Dimensions 8
2.1.3 Measure of Small and Medium Scale Business
Performance 8
2.1.4 Entrepreneurial skills and Small and Medium
Scale (SMEs)
BusinessDevelopment 9
2.1.5 Finance 10
2.1.6 Sources of Finance Available to SMEs 10
2.2 Theoretical Framework 12
2.2.1 Malthusian Theory of Population 12
2.2.2 The
Theory of “fustest with the mostest” 13
2.2.3 Social
Capital Theory 14
2.3 Empirical Review 18
CHAPTER
THREE: RESEARCH METHODOLOGY 20
3.1 Research Design 20
3.2 Population of the Study 20
3.3 Sample and Sampling Techniques 20
3.4 Research Instruments 20
3.5 Validity and Reliability of the
Instruments 20
3.6 Method of Data Collection
3.7 Method of Data Analysis
CHAPTER
FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction
4.2 Interpretation of results
4.3 Test hypotheses 1
4.4 Test hypotheses 2
4.5 Findings
CHAPTER FIVE: SUMMARY
RECOMMENDATIONS AND
CONCLUSION
5.1 Summary
5.2 Recommendations
5.3 Conclusion
REFERENCES
APPENDIX
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
Small
and medium scale enterprises are considered the backbone of the economy of many
countries.
Many
SMES are playing a leading role in national industries (lee 2007).it is
estimated that small and medium scale enterprise make than 90percent of all
business establishment worldwide (LIN
2008). According to the economic survey 2006 the sector contributed over
50percent of new jobs created 2005. For organization for economic development
(OECD) members. The percentage of SMES out of the total of rims greater than
97percent .
In
the U.S SMEs provide approximately 75percent of the net jobs added to the
economy and employ around 50 percent of
private work force , representing 99.7percent
of all employers (OECD,2002). Small and medium enterprise make a
significant contribution in the global economy, with respect to enterprise
development and new job creation. There also is an increasingly important role
for SMES to contribute to economic growth and technological development
specifically in those developing
countries were liberation and globalization of the economy is taking place (christopher & ERIK 2003)
small and medium enterprise play a pivotal role in sustaining employment and
creating income and prosperity (Lange et ‘al 2000).
According
to (sanberge,vinberge and pan 2002) performance of SMEs is their ability to contribute job wealth
creation through enterprise start up survival and growth. SMEs performance can
be termed to be firm success which may have difference different outcomes and
actions (Chittihaworm, islam, keawchana and yusuf, 2011).
Considerable number of researchers has
worked on the subject matter in the years past but little or no effort are
geared towards accessing determinant factors of small and medium enterprise
performance. Especially between 2003_2004. A previous study shows that many
factors are responsible for SMEs
performance which include but not limited to educational background, political
stability, government policy, infrastructure, funding, entrepreneur competence
of expert and market.
Therefore, the research study aims of
examining If determinant factor such as: Educational, political policy,
infrastructure, funding ,entrepreneur competencies raw materials technology,
channel of distribution and consumers patronage actually enhance the SMEs
performance and the most effective amongst the factors in oyo state.
1.2 Statement
of Research Problem
The SMEs in Nigeria still face a lot of problems
ranging to survival, the rate of mortality is alarming. The government has made
a lot of efforts to ensure that the SMEs are given a helping hand to frog-leap;
growing to complement the modern day industrial structures like other
developing nations of the world. Over the years, there have been serious
divergent opinions as to what should be an appropriate policy to develop for
Nigerian SMEs. In recent times, the government merged the Nigerian Industrial
Development Bank (NIDB), Nigerian Bank for Commerce and Industry (NBCI) and
Nigerian Economics Reconstruction Fund (NERFUND) to form the bank of Industry
(BOI); all in the Small and Medium Enterprises Equity Investment Scheme
(SMEEIS) was set in 2001 by the Bankers Committee which was a response to
government overture that banks should device ways of funding SMEs in Nigeria.
Now government has converted all the Community Banks in the country to
Micro-Finance Banks, strengthening the capital base, so as to be able to lend a
helping hand to the development of SMEs. In spite of these developmental
policies, the result from this sector of the economy has not been encouraging.
Some scholars are of the view that the effort of Nigerian government is
unidirectional. Apart from financial support, little is being done by the
government about other environmental support such as infrastructure and
technology. No doubt, in Nigeria and indeed as in many other developing
countries, poverty level is still very high. Some scholars have maintained that
the high rate can be linked to the investment environments which have been
friendly to the survival and development of SMEs. This is evident from the role
of mortality of these small scale enterprises.
1.3 OBJECTIVES OF THE STUDY
i.
To ascertain the roles of government in
entrepreneurial development in oyo state.
ii.
To evaluate the roles of government in
entrepreneurial development in oyo state
iii.
To examine the impact of small and
medium enterprise on community development in oyo state.
1.4
RESEARCH HYPOTHESIS
Ho: Small and medium
enterprise does not have impact on community development
Hi: Small and medium
enterprise have impact on community development
Ho :Sources of finance
does not contribute to entrepreneurial development
Hi:
Sources of finance contribute to entrepreneurial development
1.5
SCOPE AND LIMITATION OF THE STUDY
The research is not without
limitation, one of such limitations include obtaining of material for research
work. For instance, literatures on SMEs abound but all in scattered form. Apart
from this, confidentiality syndromes affecting most of the enterprises is also
another problem. This has to do with unwillingness of SMEs to disclose the
worth of their business for the fear of being subjected total. Above all, lack
of proper recording keeping practices on the part of the SMEs causes limiting
factor in collecting data necessary for adequate research.
1.6
SIGNIFICANCE OF THE STUDY
The importance of this study is to
provide solution to the problems discussed earlier an also to review the
necessity of this study in the Nigerian economy as a whole. The study will be
significant in contributing to the existing knowledge of the researcher and the
study will also be relevant to the oyo State entrepreneurial as well as the
Small and Medium Enterprises on how to invest and stay for long period in the
industry.
This
study will provide useful information to the government and to the public on
how significant small and medium scale enterprise is to the economy of the
nation and help government to evaluate the shortcoming to the development of
the SMEs and provide possible solution to it.
1.7
DEFINITION OF OPERATIONAL TERMS
Enterprise:
This can be defined as a company, organization or business.
Entrepreneurial:
This means someone who starts a business or a company, arranges business deals
and takes risks in order to make a profit.
Entrepreneurship:
It is the activities of venturing into new enterprises. It is the creation of
new enterprises to meet new challenges and opportunity presented by a given
situation.
Finance:
This is the act of managing the resources available for the business e.g.
Funds.
Small and Medium Scale Enterprises
(SMEs): It defined Small Scale Enterprises as an
establishment with total cost of not more than #500,000 (excluding cost of
land, but including working capital). While Medium Scale Enterprises is an
establishment with total cost(Including working but excluding cost of land
above 40 million) but not exceeding #150 million, with a labour size of between
36 and 100 workers.
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