1.1 Introduction
Non-Governmental Organizations (NGOs) refers to organizations that are independent from government control and operate for charitable, developmental, or humanitarian purposes. Non-Governmental Organizations (NGOs) play a crucial role in fostering entrepreneurship, particularly in developing regions. Their involvement is pivotal in creating an enabling environment for entrepreneurs by providing essential support services such as training, funding, and mentoring. NGOs often bridge the gap between governmental efforts and the private sector, offering tailored solutions to local challenges that impede entrepreneurial growth.
Entrepreneurship is widely recognized as a key driver of economic development and innovation. According to the Global Entrepreneurship Monitor (GEM), entrepreneurial activities contribute significantly to job creation and economic dynamism, thereby alleviating poverty and enhancing overall economic resilience (Bosma et al., 2021). However, entrepreneurs in many developing countries face myriad challenges, including limited access to finance, inadequate training, and a lack of market information.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
The historical impact of Non-Governmental Organizations (NGOs) on entrepreneurship development can be traced back to the mid-20th century when the concept of organized, non-profit assistance began to take shape. The aftermath of World War II and the subsequent wave of decolonization led to the establishment of numerous NGOs focused on rebuilding war-torn regions and supporting newly independent countries. These early efforts laid the groundwork for the multifaceted role NGOs play in economic development today.
In the 1970s, the microfinance movement emerged as a significant milestone in the history of NGO involvement in entrepreneurship. One of the pioneering figures in this movement was Dr. Muhammad Yunus, who founded the Grameen Bank in Bangladesh in 1976. The bank provided small loans to impoverished individuals without requiring collateral, thus enabling them to start or expand small businesses. This model proved successful and was replicated globally, demonstrating the potential of microfinance as a tool for entrepreneurship development (Yunus, 2007).
The role of Non-Governmental Organizations (NGOs) in the development of entrepreneurship has garnered significant attention in recent years, especially in the context of developing economies. NGOs, which operate independently of government influence, aim to address various socio-economic issues, including poverty, education, healthcare, and economic development. Their initiatives often focus on empowering disadvantaged groups by providing resources and support that facilitate sustainable economic activities.
Entrepreneurship is a crucial component of economic development, contributing to job creation, innovation, and economic dynamism. In many developing countries, however, entrepreneurs face significant challenges such as limited access to capital, inadequate infrastructure, lack of training, and bureaucratic hurdles. These obstacles can stifle entrepreneurial potential and hinder economic progress. According to the World Bank, access to finance is one of the most critical constraints for small and medium-sized enterprises (SMEs) in developing countries, with about 70% of all SMEs lacking access to credit (World Bank, 2020).
NGOs play a vital role in mitigating these challenges by offering a variety of support services tailored to the needs of entrepreneurs. These services include microfinance, which provides small loans to individuals who do not have access to traditional banking services. The concept of microfinance, popularized by the Grameen Bank in Bangladesh, has proven effective in fostering entrepreneurship among the poor by providing them with the capital needed to start and expand businesses (Yunus, 2007).
In addition to financial support, NGOs provide training and capacity-building programs that enhance the skills and knowledge of aspiring entrepreneurs. These programs often cover areas such as business planning, financial management, marketing, and technical skills relevant to specific industries. For instance, TechnoServe, an international NGO, offers business training programs that have helped thousands of entrepreneurs in Latin America, Africa, and Asia to improve their business practices and increase their income (TechnoServe, 2021). Moreover, NGOs facilitate market access and networking opportunities for entrepreneurs. They often act as intermediaries between small businesses and larger markets, helping entrepreneurs to reach new customers and establish partnerships. By organizing trade fairs, exhibitions, and networking events, NGOs create platforms for entrepreneurs to showcase their products and services, thereby expanding their market reach.
The impact of NGOs on entrepreneurship development can be seen in various success stories around the world. For example, the Aga Khan Foundation has been instrumental in promoting entrepreneurship in Central and South Asia by supporting small businesses through microfinance, training, and market linkages (Aga Khan Foundation, 2019). These efforts have led to the creation of numerous jobs and improved livelihoods for many individuals and communities.
Therefore, in Bauchi Metropolis where the research was carried out, the activities that was conducted is to know the effect of non-governmental organisation on development of entrepreneurship.
1.3 Statement of Problems
Investigation revealed that many entrepreneurs in developing countries struggle to access adequate financing to start or expand their businesses. Traditional financial institutions often perceive small businesses as high-risk ventures, leading to limited availability of credit (World Bank, 2020).
Additionally, women entrepreneurs often face additional challenges, including limited access to finance, cultural barriers, and discriminatory practices. Gender inequalities in entrepreneurship persist despite efforts to promote gender inclusivity in economic activities (World Bank, 2020).
Furthermore, infrastructure and Resource Constraints: Poor infrastructure, including unreliable electricity and transportation networks, poses significant challenges to entrepreneurs in developing regions. Lack of access to basic amenities and resources further impedes business operations and growth (World Bank, 2020). Hence, it is against this backdrop that this study aims to examine the effect of non-governmental organisation on development of entrepreneurship.
1.4 Aim and Objectives of Study
The aim of the study is to investigate the effect of non-governmental organisation on development of entrepreneurship in Bauchi Metropolis. In achieving this aim, the following specific objectives were laid out as follows:
- To analyze training and capacity-building programs implemented by NGOs and their impact on the entrepreneurial ecosystem;
- To evaluate the effectiveness of microfinance and other financial services offered by NGOs in enabling entrepreneurship;
- To explore the influence of NGOs in advocating for favorable regulatory environments for entrepreneurship; and
- To determine the critical success factors and barriers encountered by NGOs in their entrepreneurship promotion efforts in different regions.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Does NGOs support entrepreneurs in accessing markets, establishing connections with stakeholders, and expanding their customer base?
- What types of training and capacity-building programs do NGOs provide, and how do they impact entrepreneurial skills and success?
- How effective is microfinance and other financial services offered by NGOs in enabling entrepreneurship?
- What are the critical success factors and barriers encountered by NGOs in their efforts to promote entrepreneurship in different regions?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: NGOs that provide microfinance and small business loans have a significant negative impact on the initiation and growth of entrepreneurial ventures in developing economies.
- H1: NGOs that provide microfinance and small business loans have a significant positive impact on the initiation and growth of entrepreneurial ventures in developing economies.
Hypothesis Two
- H0: NGOs that advocate for supportive regulatory environments for small businesses do not contribute to a more conducive entrepreneurial ecosystem, leading to increased startup rates and business survival.
- H1: NGOs that advocate for supportive regulatory environments for small businesses contribute to a more conducive entrepreneurial ecosystem, leading to increased startup rates and business survival.
Hypothesis Three
- H0: NGOs that facilitate market access, networking opportunities, and linkages with stakeholders do not enhance the growth and expansion prospects of entrepreneurial ventures in developing economies.
- H1: NGOs that facilitate market access, networking opportunities, and linkages with stakeholders enhance the growth and expansion prospects of entrepreneurial ventures in developing economies.
Hypothesis Four
- H0: Non-Governmental Organizations (NGOs) do not significantly contribute to the development of entrepreneurship in developing economies through their provision of financial support.
- H1: Non-Governmental Organizations (NGOs) significantly contribute to the development of entrepreneurship in developing economies through their provision of financial support.
1.7 Significance of Study
The significance of studying the effect of Non-Governmental Organizations (NGOs) on the development of entrepreneurship can be understood from various stakeholder perspectives:
- Entrepreneurs: NGOs can provide crucial financial support, training, and networking opportunities that enable entrepreneurs to start and grow their businesses, thereby improving their livelihoods and contributing to local economic development.
- NGOs: Understanding the impact of their interventions helps NGOs refine their programs and strategies, ensuring they effectively support entrepreneurship and achieve sustainable development goals.
- Governments: Insights into NGO contributions can inform policymakers about effective strategies to promote entrepreneurship, potentially leading to policy reforms that create a more conducive environment for business growth and economic stability.
- Investors and Donors: Knowledge of NGO initiatives in entrepreneurship development can guide investment decisions, encouraging support for programs that demonstrate positive socio-economic impact and sustainability.
- Academic and Research Communities: Research on NGO impact provides valuable insights and data for academics studying development economics, social entrepreneurship, and public policy, contributing to the broader knowledge base on effective interventions for economic empowerment.
1.8 Scope of Study
The scope of the research is focused on the effect of non-governmental organisation on development of entrepreneurship in Bauchi Metropolis.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definitions of Terms
Non-Governmental Organizations (NGOs):
Organizations that are independent from government control and operate for charitable, developmental, or humanitarian purposes. They typically focus on addressing social, economic, and environmental issues.
Entrepreneurship:
It is the process of designing, launching, and running a new business venture, often initially a small business, which typically begins as a small business, offering a product, process or service for sale or hire.
Role:
Persons task or duty in an undertaking NON-GOVERNMENTAL − any group set up, that is outside direct government control or involvement.
Organization:
They are social and technical devices or instrument that helps in the accomplishment of goals that are too large and complex to be handled by one person.
Community:
A territorially bounded social system within which people live in harmony, love, intimacy and share common social, economic and cultural characteristics.
Development:
It is a continuous process of positive change in the quality and span of life of a person or group of persons.
Government:
An authoritative unit of the state which has the sole function of achieving the ends of the state- provision of welfare services, maintenance of law and order and establishing and maintaining of relations with similar units in other state.
