1.1 Introduction
Small-scale industries play a vital role in the material welfare of many nations today’s especially the developing nations. They make specific contributions depending on the form and objectives. Some produces raw materials, distribute products or provide services while others them the raw materials into finished goods or products. The need of most developing countries is to attain self-reliance and resilient economic status capable of generating an internally sustaining growth. Small-scale industries are the roots and pillars upon which h this can be achieved. The activities of any small-scale industry in any give economy cannot be over emphasized especially mow the country is in political disarray and needs be called to orderliness. The role of Small and Medium-Scale Enterprise (SMEs) in the national economy cannot be underestimated.
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, Limitations of the Study and Definition of technical terms.
1.2 Background of Study
In the earning of industries, Nigeria and other countries were merely producers of raw materials for use in European industries. While the raw materials which have been turn into the finished goods were more concerned with the maintenance of law and order, and putting in structures for easy evaluation of raw materials than industrializing the colonies. Since Nigeria lacked the necessary tools for capital investment, technical and managerial skilled necessary to promote and operate viable enterprises, foreign investors in a bi d to tap the abundant resources in the country took the initiative of establishing small-scale industries.
Industry has become the most dynamic sector in most developing countries like Nigeria. It would be an over statement to say that small scale industries or business constitute the bulk of business establishment in most of these developing countries. It is very difficult to make a specific statement regarding the small scale business but walking along the streets of major towns in any state of this country would show that small scale business constitute at least 60% of the Nigeria industrial activities. This follows that the small scale business constitutes a substantial portion of the gross domestic product (G&P) as well as generate the foreign exchange earnings of Nigeria.
Nigeria in the past times has placed much emphasis on capital intensive industries and tends to neglect the small scale businesses which are more essential to the country taking into consideration the countries human and natural resources as well as capital availability.
Large-scale business has been so much over estimated compared to the small scale business, because of the size. This indicates that so much attention is being given to the large-scale business by the government than the attention given to the small scale businesses which are indispensable to the functioning of our economy. It is scale business les on their potentials for creating employment opportunities. The encouragement of small scale business will help to eliminate the imbalance in the rate of economic growth difference between the rural and urban areas and this enhance integrated rural development.
The problem with most entrepreneurs especially in Nigeria and in general is their inability to recognize the need to give priority attention to the issue of planning and control which are the essential ingredients in the management of very business. Venture be it large or small scale business.
In small scale manufacturing industries there are also the problem of sourcing raw material, which are essential for the manufactures of the products. It is for this reason that we intend to look at the subject matter under consideration with a view to identifying problems and thereby suggest meaningful solutions to those problems.
Therefore, in Nigeria where the research was carried out, the activities that was conducted is to examine the source of Raw Materials Assistance to Small Scale Industry.
1.3 Statement of Problems
Investigation revealed that any business whether small or large operating in any socio- economic setting is bound to have problems. Small scale business however, have problem peculiar to its size.
Studies have identified some of these problems as follows, incompetent management, competition, country, state of economy, lack of encouragement from the government finance high level of exchange rate, ban on importation of raw material etc. Any of these problems could lead directly to the failure of small scale businesses which has been put as comprising the bulk of new business every year.
The study also looked into the achievements of small-scale industries in the Nigerian economy the problems of impending the survival and sustainance of small-scale industries in Nigeria is looked into, and consequently the solutions to such problems.
1.4 Aim and Objectives of Study
The aim of the study is to examine the source of raw materials assistance to small scale industry. In achieving this aim, the following specific objectives were laid out as follows:
- To identify how raw material are been sourced in small scale industry.
- To identify the general problems of small scale business and how the problem be solved.
- To identify the effect of government legislation on important and the effects of exchange rate has on the small scale business.
- To identify the problems of planning and control as it effects the management of small scale business and then to proffer solutions that can help to bring about the availability of raw materials.
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 finance constitute to the greatest problems of small scale enterprises?
- Does small scale enterprise have due attention over the year in terms of finance government policies and ban on importation of raw materials from overseas countries?
- How does your organization source for raw materials?
- What factors hinder the growth of small scale enterprises?
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: The small scale enterprises has not been given due attention over the years in terms of finance
- H1: The small scale enterprises has been given due attention over the years in terms of finance
Hypothesis Two
- H0: Finance does not constitute the grates problems of small scale enterprises
- H1: Finance does not constitute the grates problems of small scale enterprises
1.7 Significance of Study
The significant of this study is to take a critical view of the issues of sourcing raw materials, which is primary need of the small scale business. It is believed that this study will go a long way to out lining and lighting the problems encountered by managers and prospective entrepreneurs in order to minimize rate of business failure in Nigeria.
Furthermore, it is hoped that any manager who digs into the finding of this study will no doubt be an effective manager.
1.8 Scope of Study
The scope of the research is focused on the Operation Project on Raw Materials Assistance to Small Scale Industry in Nigeria.
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.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- 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
Raw Materials: These refer to the natural substance from which product is made or manufactured.
Small Scale Industries: these are the industries: These are the industries whose capital investment in machinery and equipment is not exceeding N250.000 (Two hundred and fifty thousand naira) and employing between on to fifty workers.
Product: A product is the combination of both raw materials and services. It is a packaged of customers satisfaction and benefits.
Industrialist: This refers to the person who provides the necessary financial, human and material resources for the establishment and up keep of an industry.
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