THE RELEVANCE OF SMALL AND MEDIUM SCALE ENTERPRISES TO NIGERIA’S ECONOMIC DEVELOPMENT: AN INVESTIGATION

THE RELEVANCE OF SMALL AND MEDIUM SCALE ENTERPRISES TO NIGERIA’S ECONOMIC DEVELOPMENT: AN INVESTIGATION

ABSTRACT

The economy of any nation is driven by the level of industrialization, while the level of industrialization is determined by a number of other factors. In a developing economy like Nigeria, Small and Medium scale enterprises play a vital role in economic development. Unfortunately , these categories of industries are bedeviled with many problems ranging from lack of infrastructural facilities, low technological know how, lack of technical skills to financing problems. This research is centered on financing small and medium scale enterprises for economic development. It explored the present pattern of financing, the alternative sources of financing  SMEs as well as government effort past and present geared towards improving the financial status of such categories of industries. It also examined the problems faced by SMEs in raising the needed capital. The overall objective of the study is to seek for improved or new methods of financing SMEs for improved performance which will in turn lead to economic growth and development of the nation. To carry out the study; data were collected from both primary and secondary sources. The main data collection instruments were a structured questionnaire and personal interview. The data collected were presented in tables as frequency distribution and analyzed with percentages and frequencies.  The sign test and person product moment correlation coefficient were used to test the hypothesis. The end result of the research shows that small and medium scale enterprises were underfinanced and various measures were suggested to improve the funding status including direct government intervention in financing.