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CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF STUDY

In recent year, particularly since the adoption of the economic reform programme in Nigeria in 1986, there has been a decisive switch of emphasis from the grandiose, capital intensive, large-scale industrial project based on the philosophy of Impact Substitution to small scale industries with immense potential for developing domestic linkage for rapid, sustainable industrial development. there can be no gain-saying that Nigeria has long recognize the importance and valuable contribution that small scale enterprises can make to poverty alleviation, wealth creation employment generation and private sector development. this small-scale enterprises are given the right and opportunity to exist because it is an open social system where people come in group with the purpose of combining knowledge, techniques, skills and resources to accomplish a goal oriented task by integrating their structural activities.

The development of small –scale industries is not only an effective way of contributing to the economy and increase standard of living, but also one of the principle means of achieving social and political objectives by stemming the problem of rural-urban migration, increasing the income of low income earners, all of which are of crucial importance to our societies. consequently, both the federal and state government and recently, local government have stepped off to promote the development of small scale enterprises through increase incentives schemes, including enhanced budgeting allocation for technical assistance programme. new leading scheme and credit institution such as the National Economic Reconstruction Fund (NERTUND World Bank Assisted Small Scale War Scheme (SMEX), Nigeria Export and Import Bank (NEXIM), The peoples Bank of Nigeria (PBN) and the Development Bank have also emerged at both the National and local level to boost the flow of development finance to small scale enterprise.

In trying to promote small scale industry there is need to understand that the entrepreneurs are face with the problem of managing the enterprise and the extend of realization of it contribution to the economy depends on how they are cogently identified and tackled. The problem of managing the small scale enterprises are caused by both external and internal factors. the external factors are government policies, lack of infrastructural facilities, raw materials, banks unwillingness to give out loan etc internal factor are lack of managerial skill, lack of planning, market , finance etc.

1.2 STATEMENT OF PROBLEMS

The various successive government in Nigeria have been making conceited effort through their budgeting provision and other enabling policies to encourage the establishment of small-scale enterprises in the country, these enterprises are expected to argument landable government opportunities ensuring efficient productivity as well as raising the standard of living. Inspite of all these government efforts in their direction, the performance of small-scale enterprises operating in due to some teething problem facing them. these problems are:

1. Problem of capital for the procurement of more efficient machine for effective operation and for the smooth running of the business.

2. Problem of lack of Infrastructural facilities in the country.

3. Problem of lack of managerial skill 

4. Problem of lack of planning 

5. The important of small scale enterprises 

6. Unfavourable government policies.

1.3 PURPOSE OF THE STUDY

1. To find out how lack of strategic planning contributes to the problem of managing small scale enterprise.

2. To find out how lack of managerial skill contributes to the problem of small scale enterprises.

3. To find out how easy it is for entrepreneur to raise capital and obtain loan from bank.

4. To find out the extend to which infrastructural facilities affect the management of small scale enterprises.

5. To find out the role of small scale enterprises to the economy development.

1.4 SCOPE OR DELIMITATION OF THE STUDY

The survey was to cover a nation wide survey so as to get a comprehensive data of the problem of managing small scale enterprises but due to the wide range of the topic and time, constraint, the study will therefore, be limited to Eberson Company Nigeria Limited.

1.,5 RESEARCH QUESTION

1. Does lack of planning contribute to due problem of managing small scale enterprise.

2. Does lack of managerial skill contributes to the problem of small scale enterprises.

3. Is it always difficult to obtain loan from banks.

4. Does lack of infrastructural facilities contribute to the problem of small scale enterprises.

5. Has small scale enterprises played any role in the economy development.

1.6 HYPOTHESIS

1. Ho: Lack of planning does not contribute to the problem 
of small scale enterprises.

Hi: Lack of planning contributes to the problem of small scale enterprises.

2. Ho: Lack of managerial skill does not contribute to the 
problem of managing small scale enterprises.

Hi: Lack of managerial Skill contribute to the problem of managing small scale enterprises.

3. Ho: It is not difficult to obtain loan from bank.

It is difficult to obtain to loan from bank.

It is always difficult to obtain loan from the bank.

4. Ho: Lack of infrastructural facilities does not contribute 
to the problem of small scale enterprise

Hi: Lack of infrastructural facilities contributes to the problem of small scale enterprises.

1.7 SIGNIFICANT OF THE STUDY

The following are the significant of the study.

i. To assist Eberson Company Nigeria Limited to adopt new strategy to improve production a sales.

ii. To provide basic information basic information on the impact of small scale industry.

iii. It will enable the readers to have indept knowledge on the problem of managing small scale enterprise.

iv. To provide possible solution on the problem of managing small-scale enterprises.

v. It will also be useful to student who are carrying research in such area.

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