In countries at same levels of development with nigeria, smescontribute a much higher proportion to gdp than currently observed in nigeria compared to other emerging markets, nigeria has historically shown lack of commitment to building a. The importance of smes to economic development in nigeria is increasingly becoming recognized by both local donors and international agencies. Small and medium scale enterprises smes and nigerias economic development article pdf available in mediterranean journal of social sciences 57. Is small and medium enterprises smes an entrepreneurship. The following research questions will be answered in order to identify and examine entrepreneurship development programme in nigeria and proffer solutions to them. Development financing is one of the requirements for sustainable economic growth in any economy. Prospects and challenges of smes in 21st century africa. Pdf this empirical study adopts an autoregressive distributed lag approach in order to examine how small and medium enterprises smes. The role of government and other financial institutions by. Promoting and facilitating development programmes, instruments and support services to accelerate the development and modernization of msme operations. Bank financing of smes in five subsaharan african countries. Smes and economic development small and medium enterprises smes play vital role in the economic development of nigeria and are known to be the main engine of economic growth and a key factor in promoting private sector development and partnership. Time series data from central bank of nigeria cbn report on the activities of microfinance institutions. Department of entrepreneurship and business technology, federal university of.
The role of small and medium enterprises in economic development. Evidence from small and medium scale enterprises smes financing. The paper calls for african governments to develop. What are the contraints to sme financing within ecowas. The importance and role of small and mediumsized businesses 335 the smes sector is the main source of forming the middle class with a decisive role in maintaining the socialpolitical stability in a country. Micro, small and medium enterprises development fund msmedf. Small and medium enterprises development agency of nigeria smeies small and medium enterprises industries equity investment scheme. Smes are critical to economic development, especially of transiting economies.
Effect of globalization on small and medium enterprises. Samples consist of ownermanagers of smes in three major commercial states of nigeria. Many countries in subsaharan africa have a large number of smes relative to the size of the economy, but these are almost exclusively micro companies and they are often not part of the formal economy. It discusses conceptual issues of definition, structure and. Small and medium scale enterprises smes and nigeria s economic development article pdf available in mediterranean journal of social sciences 57. Stimulating, monitoring and coordinating the development of the msmes subsector. Gbandi, phd department of business administration, benson idahosa university, benin city, nigeria g. In this paper, the strategic contributions of smes to job creation, poverty alleviation and standard of living of people was studied. Amissah, phd department of business administration, wellspring university, benin city, nigeria abstract small and medium enterprises act as catalysts in the economic. It offers ministers the opportunity to take stock of the progress that has been achieved in implementing. Relationship exists between socioeconomic, political and environmental factors and the development of entrepreneurship in nigeria.
Contribution of small and medium enterprises to economic. The growth impact of smes in nigeria scholarlink research. The study adopts an ex postfacto type of descriptive research design. Pdf small and medium enterprises and economic growth in nigeria. An overview of small and medium enterprises smes in. Contribution of smes to economic development in ghana pdf. Smes in economic growth and development of a nation cannot be over emphasized. Pdf issues in sme development in ghana and south africa. They are in the forefront of output expansion, employment generation, income redistribution, promotion of indigenous entrepreneurship and production of primary goods to strengthen industrial linkages. This is because the smes are seen as a potent vehicle for the achievement of economic growth and development as they provide the best opportunity for job creation and rural development.
They represent about 90% of businesses and more than 50. Introduction the nation needs the small and medium enterprises smes because they contribute meaningfully to economic development. Small and medium enterprises smes play a vital role in the growth and economic development of any nation, especially developing country like nigeria smes have been advised by ayozie and latinwo,2010, safiriyu and njogo, 2012 to encourage entrepreneurship. Abstract the sme sector has widely been accepted as the engine of economic growth and poverty eradication in the world. Smes account for the majority of businesses worldwide and are important contributors to job creation and global economic development.
Government of nigeria from the inception of sap to provide resources credit in particular for the development of smes, the subsector still suffers from shortage of funds either to begin or expand existing smes. Sumerianz journal of business management and marketing. Growing the global economy through smes edinburgh group. This paper studies the effect of globalization on small and medium enterprises smes performance in nigeria. The small and medium scale industry is seen as a key to nigerias growth and. Financing options for small and medium enterprises smes in nigeria e.
Smes 2 banji oyelaranoyeyinka fss 2020 introduction smesare a very important part of the nigerian economy. The enabling environment and trade and investment capacity building executive summary recent assessments of growth point to an understanding that the rate at which countries grow is substantially determined by 1 their ability to integrate with the global economy through trade and. Report on support to smes in developing countries through. This fact is possible because the distribution of economical power by the system of. Challenges to the growth and development of manufacturing and services smes in nigeria tejumade omowumi siyanbola obafemi awolowo university department of management and accounting, faculty of administration nigeria abstract this paper evaluate the challenges facing nigerian manufacturing and services smes in their operating environment. Small and medium scale enterprises, sme operators, portharcourt city, nigeria. In recent time, however, economic growth and development and their drivers have been examined by researchers from.
Entrepreneurship skills development, government support. Contribution of microfinance banks to the development of. Small and medium enterprises smes play a major role in most economies, particularly in developing countries. Smedan small and medium enterprises development agency.
Small and medium scale enterprises smes and nigerias. Issues, challenges and prospects of small and medium scale. Smes operators and provision of tax incentives for smes operators. The role of smes in employment creation and economic. He came to the conclusion that smes in nigeria can be categorized under three major headings viz.
This study examines the impact of microfinance institutions in financing small scale enterprises for economic growth in nigeria. Smes represent about ninety percent of the industrial sector in terms of. To achieve this broad objective therefore, the following two specific objectives were formulated, to. The paper builds on data collected through five indepth studies in kenya, nigeria, rwanda, south africa, and tanzania between 2010 and 2012. Micro small and medium enterprises’ activities income. However, the role played by smes, notwithstanding their development, is everywhere constrained by inadequate funding and poor management. This study, small and medium scale enterprises smes in nigeria. It identifies the roles of smes in nigerias development and growth. Smes in nigeria have not performed creditably well and hence have not played the expected vital and vibrant role in the economic growth and development of nigeria. Government policy and performance of small and medium. In nigeria for instance, an sme is defined based on the staff strength and the asset base of the organization. The importance and role of small and mediumsized businesses.
The supply of finance to various sectors of the economy will promote the growth of the economy in a holistic manner and this, will make development, welfare improvement to proceed at a faster rate. Development in nigeria through sme 1 research proposal on projecting small and medium scale enterprises sme. Some argued that smes expansion boosts employment more than large firm. Introduction small and medium scale enterprises smes are generally regarded as the engine of economic growth and equitable development in developing economies. The effect of international business on smes growth in nigeria. This way, smes become engines that sustain growth for long term development. Impact of microfinance institutions on small scale.
Smes are vital to achieving decent and productive employment as they globally account for two. In nigeria, according to aderemi 2003, smes have the following characteristics. Operating systems accounting, management, manual, etc xi. The contribution of small and medium scale enterprises smes has been recognized as main sustenance of the economy because of their capacity in enhancing the economy output and enhance human welfare. Initiating and articulating policy ideas for small and medium enterprises growth and development.
But none looked at financing smes as a challenge for entrepreneurial development in gombe state. Entrepreneurship and economic development in nigeria. Smes on nigerias economic growth performance for the sample period 1993 to 2011. Small and medium enterprises smes finance world bank. Smes in terms of employee size, turnover andor total balance sheet european union 2003. Though some of the smes are credit worthy to attract loans, the high risk associated with smes subsector normally serve as an.
The role of sme firm performance in nigeria eniola, anthony abiodun department of business management, university of malaysia unimas, abstract purpose the purpose of this paper is to discuss the role and contribution of smes performance in the national development of a developing country like nigeria. The role of smes in employment creation and economic growth in selected countries authors name. Microcottage industry is an industry with a labour size of not more than 10 workers, or total cost of not more than n1. Smes play an instrumental, but often underrecognized, role in private sector growth. This situation has been of great concern to the government, citizenry, operators, practitioners and the. Small and medium enterprises smes in nigeria have not performed creditably well and hence have not played the expected vital and vibrant role in the economic growth and development of nigeria. In nigeria, smes account for fifty percent to employment on average and also fifty percent of its industrial output. Entrepreneurship skills development, government support and growth of smes in nigeria 1 entrepreneurship skills development, government support and growth of smes in nigeria. However, the role played by smes, notwithstanding their development, is everywhere constrained by. Smes and its role in economic and socioeconomic development of pakistan article pdf available october 2017 with 9,591 reads how we measure reads population in. The small and medium scale enterprises subsector is one of the key drivers of economic growth and development engages about 80% of the total work force in nigeria.
Keywords research, entrepreneurial development, smes, synonymous 1. The big picture 6 smes in the global economy 7 impact of the financial crisis 12 policy responses to the financial crisis and sme needs 16. Nigerian economy in pursuing this agenda placed smes development and promotion a. Gbandi and amissah 2014 maintained that finance contributes about 25% to the success of smes in nigeria and that more than 70% of funds available to smes are from the informal finance sector. Financial system strategy 2020 central bank of nigeria.