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ROLE OF NATIONAL DIRECTORATE OF EMPLOYMENT (NDE) IN FINANCING MICRO-BUSINESS

ABSTRACT

The aim of this study was to find out the role of the national directorate of employment in financing micro-business enterprise in Enugu metropolis. Micro business enterprise seems to be growing stealing in Nigeria and Enugu state in particular. The growth of micro business enterprise has been identified as one of the tools that can be used by the national directorate of employment on tackling unemployment problems in Nigeria. Four research questions were asked and answered to ascertain the role of the national directorate of employment in financing micro-business enterprise in Enugu metropolis. Data’s were collected through questionnaires 30 respondents were randomly sampled from 3 randomly selected bread banking business enterprise in Enugu metropolis. The data were analyzed using simple percentages. The major finding were:- (1) The national directorate of employment contributes substantially to financing of micro business enterprise. (2) Micro business enterprise generate employment opportunities to people through their business enterprise, (3) The national directorate of employment contributes to poverty alleviation. (4) The process of granting loan to micro business enterprise through the national directorate of employment is too rigorous. Based on the findings of the study, the researcher recommends that:- (1) The financing of micro business by the national directorate of employment should be interest free or very minimal interest should be changed. (2) The national directorate of employment should encourage the micro business enterprise to form finance cooperative societies where funds can easily be sourced from at a low interest rate. (3) The national directorate of employment should help micro business enterprise in staff training and development.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The world wide economic depression of the early 80’s caused a rapid detonations in Nigeria economy. Industrial output shrank to an all time and low and commercial activities were consequently reduced, leading to less employment opportunity for million of Nigerians. By the end off 1985 the unemployment situation in Nigeria, had reached desperate alarming proportions. In the urban areas where the educated tends to concentrate the unemployment rate was especially high running to over 10%. The youth and graduates were the hardest hit of all in employed Nigerians, ranging upwards of 3 million, three, quarters were under 25 years of age. With growing joblessness, there was growing despondency among youths and their parents.

The various government, federal state and local started trying to find solution to these problems for example, the federal government introduced the structural adjustment programme (SAP) aimed at backward integration maintenance culture and self-reliance in food production and certain basic manufactured goods. In line with this programme is the introduction of volunteer service scheme (VSS). National directorate of employment etc. All these enable unemployment graduates to establish any viable business of their own and some successes have been recorded in these programme with particular reference to agriculture and high manufacturing. This study is being undertaken with the above issues in mind especially as it relates to the role of national directorate of employment in financing micro business enterprise. The national directorate of employment (NDE) was established in 1987 as a manpower development agency to pursue two employment related objective, namely creating employment opportunities for self-employment, and enhancing employability by means of appropriate training.

According to Fashoyim (1988) the scheme is expected to make people employable and self employed as means of tackling the problem of manpower under utilization (youth and graduate employment as well as rural under-employment). Supporting the above view Aderinto (1989) revealed that the National Directorate of employment provides training opportunities guidance, and finance to the unemployed for the creation of jobs through its vocational skills development programmes (USDP) and other special employment programmes. He vocational skills development (programme was designed to provide opportunity for the acquisition of marketable skills by jobless school leavers and other youths. Over the past two decades, the employment situation has deteriorated in most parts of the world. Today many developed and third world countries suffer for high and persistent unemployment and the are growing concern over problem of low pay and reduced employment prospects of skilled workers. Economics undergoing a transition form central, planning to a market economy have been over whelmed by the rapid emergence of mass unemployment.

According to international labour organization (ILO1995) most of the developing countries of the world apart from the dynamic Asia economics fewer productive modern sector jobs have been created sine 1980’s, while the number of jobs seekers continues to mount or increase. This has led to growing unemployment and deteriorating employment conditions for a significant proportion of the labour force in many of these countries. Ojo (1997) revealed that the National directorate of employment micro business enterprise programme (MBEQ) is aimed at inculcating the spirit of entrepreneurship, creativity and self-reliance into the mind of Nigerian graduates of universities and polytechnics) and retired people. The programme is executed through the graduate job creation scheme, mature people and entrepreneurship development scheme. The scheme are executed through loans provided by banks or from fund provided by the federal government.

Over the past two decades new approaches known collectively as micro finance have emerged that apply sound economic principle in the provision of finance services to low income customers. It is importance to underline the fact that an decades new approaches known collectively as micro finance have emerged that apply sound economic principle in the provision of finance services to low income customers. It is importance to underline the fact that an access to credit is more beneficial to this category to borrowers than interest rate subsidy. The poor want credit that is available on acceptable terms when they need it. The commercial and merchant banks have been contributing to micro credit delivery in Nigeria by providing loans and advance to micro enterprise. These have helped to generate employment and output growth rate as well as improve per capital income in the urban rural areas. The micro finance played an important role in the reduction of poverty in many countries that have experienced fast economic growth such as south east Asia.

The creativity and contribution of large number of people who may not be formally employed are captured through the community based micro finance activities were well organized, are highly dynamic with strong profit margin and significant growth potential. Given the potential of micro finance to alleviate poverty and stimulate economic in a poor developing country, it is necessary to develop a viable and responsive financial service strategy for the poor in Nigeria. The national directorate of employment (NDE) over the years has actively promoted the use of employment intensive programme (EIP) as a means of assisting the creation of employment opportunities and the alleviation of poverty. It is against this background that the extent of the role of national directorate of employment in financing micro business enterprise in Enugu state was being addressed by this study.

1.2 STATEMENT OF PROBLEMS

Productive management is decreasing, one out of every 10 people of working age cannot find a job paying a decent wages. Since the economic down turn, the signs of poverty have grown stronger, wages have failed to keep pace with inflation, with the result that few Nigerians are well off today as they were about five years ago. The extended family is what sustain most Nigerians who are jobless in the country since there is no social security in this country. The few income earners have become increasingly squeezed, the safety not provided by extended family has become less and less secure. Many unemployed school leavers, graduates and retired but not tired people who could have started off with micro business enterprise cannot easily source fund to start a business on their own due to lack of collateral. Also lack of proper skill by the school leavers and graduates for self reliance compounded their inability to start a business with out undergoing further basic skill acquisition training programmes.

1.3 PURPOSE OF STUDY

The purpose of this study was use to determine the extent of the role of national directorate of employment in financing micro business enterprise in Enugu state. Specifically, the study is intended to determine.

(1) The extent of the role played by National directorate of employment in helping micro business enterprise in generating employment for the people in Enugu state.

(2) The extent in which fund are made available to micro business enterprise in Enugu state.

(3) The extent to which beneficiaries of micro credit facilities are utilized for employment generation.

(4) The extent micro business entrepreneur are self reliant through the fund made available to them in Enugu state.

(5) The extent of unemployment has decreased through financing of the micro business enterprise in Enugu state.

1.4 SCOPE OF THE STUDY

The study is delimited to the role generation of employment opportunities and poverty alleviation of two micro business enterprise in Enugu metropolis because of financial, material and time constraints.

1.5 RESEARCH QUESTION

The following research question guided the study

(1) To what extent has the national directorate of employment contributed to the financing micro business in Enugu state.

(2) To what extent does micro business enterprise generate employment opportunities in Enugu state.

(3) To what extent does bank loan facilities through NDE help the micro business enterprise in Enugu state?

(4) To what extent does national directorate of employment play in poverty alleviation in Enugu state?

(5) How has national directorate of employment interest rate policy influenced the supply of credit facilities to micro business in Enugu state.

1.6 SIGNIFICANCE OF THE STUDY

This study is significant in the following specific wages It will assist the National directorate of employment to improve and adopt strategies to reduce unemployment and poverty in Enugu state. It will create awareness to the people in Enugu state of the role of national directorate of employment and wealth creation. The awareness will improve and provide the much needed data base information on the economic and skill acquisition training programmes of the national directorate of employment. The information will help micro business entrepreneur’s benefit from the credit facilities provided by the National directorate of employment for the growth of their business in Enugu state. 

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