CHAPTER ONE

INTRODUCTION

1.1 Background Of The Study

Entrepreneurship constitute vital engine in the growth and development of the economic

growth and development of any country in which Nigeria is not left out. Entrepreneurship

development in small scale industries and Nigeria economy, thus focusing on creating

employment with emphasis on self reliance and Entrepreneurship which is called for visual

boldness and creativity. A country that is desirous of rapid industrialization and economy

prosperity cannot afford to relegate the development of its Entrepreneurship in small scale

industries to the background (Jamodu, 2018).

Small scale industries has generally been discussed against the background of poverty,

unemployment, under employment, diversification of the economy, rural-urban imbalance,

regional dispersal of industrial growth, development and long term contribution which

entrepreneurship can make in resolving or eliminating some of the problems.

According to a recent briefing to the European communities. Entrepreneurship is the spirit of

enterprises and the development of Small and Medium Enterprises (SMEs) in leaching term

of economic development for the 1990s. In fact, the term should continue to be dominant in

the case of developing countries even unto the twenty first century. After all the (SMEs)

recent over 90% of the enterprises in the most countries at the present time. Entrepreneurship

is seen as an activity which involves recognize a business opportunity mobilizing resources

and persisting to exploit that opportunity, it is said to be a necessary ingredient for self

employment, though many developing countries have tries to develop entrepreneurship talent

but with little result (Akachukwu, 2014).

As a result of the aforementioned benefit many countries do all they can to aid

entrepreneurial development. Effects at encouraging entrepreneurial development are more

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pronounced, systematically and properly coordinated in the advanced countries of the world

of the Newly Industrialized Countries (NICs) mostly of whom are Asia (Osuntagon and

Oramah, 2017).

In case of Nigeria, concrete attempt at encouraging the grow and the development of

entrepreneurship have led the establishment of government agencies as Industrial

Development Centers (IDCs) the Centers for Management and Development (CMD) in 1978

which promoted the formation of the Nigerian Association of Small Scale Industrialist

(NASSI) now has a membership of about 9.8% throughout the country, Small Scale

Industries Corporation (SSIC), Nigeria Bank for Commerce and Industry (NBCI), National

Directorate of Employment (NDE), People Bank, Community Bank, Expert Promotion

Board, Directorate of Food Road and Rural Infrastructure (DFRRI), International Labour

Organization (ILO) (Ofori, 2017).

The inability of SMEs to promote industrialization and economic development in Nigeria has

been constrained by a number of factors; such as lack of effective financial support systems,

unstable macro-economic environment, inconsistent government policies, low level of

technical skills, managerial and strategic capabilities, poor implementation and co-ordination

of efforts on SMEs and absence of sustainable mechanisms, poor infrastructural facilities,

multiplicity of regulatory agencies and heavy tax, poor quality products that cannot compete

favourably in international markets and lack of technological know-how (Ricardo, 2016).

Even though the federal government has over the time been actively involved in the provision

of finance to SMEs sub-sector through various financial intermediaries, the impact are yet to

be felt by this sub-sector because of the inability of the sub-sector to accelerate the

industrialization and economic development of the country (Joseph and Schumpeter, 2016).

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1.2 Problem Statement

Inspite of the aforementioned support and encouragement for this vital subsection economy, a

lot of problem, still emerge. Out of these problems, the one that is very prominent is the death

of up to date document on the most efficient business ventures.

Also important is the comparism of the performance of our entrepreneurs and Small Scale

Entrepreneur (SME) on the micro level with those in the (Notably, South Korea, Japan,

Singapore, Hong Kong and Taiwan). It is clear that Nigeria has a long way to go. The gap is

due to lack of human material and financial resources hereby exist because of lack of

coordination of the economy, due to poor implementation of government policies, coupled

with official corruption, unnecessary bureaucracy, nepotism, tribalism, low quality leadership

warped value system among many other problems.

While the development of the small industrialized sector is generally accepted to provide

solution to some social economic problem several question have been raised by management

practitioners, such as, why is small scale industry chosen as the most preferred seedbed for

entrepreneurship development? If small scale industries were to be promoted, what would be

the policies and strategies used for accelerating the rate of development of the small scale,

medium and large enterprise?

Would separate policies be developed for each sector should emphasis be on or integrated in

industrial policy for which each sector finds its own place within the system? What is

acceptable definition for enterprise? Who in-fact is an entrepreneur?

Also, considered as a problem is the death of up to date document on the most efficient ways

of managing business ventures, the gap between performance entrepreneurs and Small Scale

Entrepreneurs (SMEs) on the micro and macro level with these in far east are said not due to

lack of coordination of nation economy in the term of poor implementation of government

3
policies coupled with official corruption, unnecessary bureaucracy, nepotism, tribalism, low

quality leadership warp value system, among many other problems.

Regardless of difference in political philosophy, small scale business remains strategic

element in the structure of all societies because of its direct broad impact on other aspect of

economic and social life. In every society, the performance of commercial activities and

highly interrelated institution may stimulate economic growth by her influence on direct

calculation of lost benefit.

1.3 Research Objectives

i. To determine the effect of entrepreneurship development in the Nigeria economy

ii. To know if Entrepreneurship Development Programme improve management skill of

small scale industries

iii. To examine the problems affecting Entrepreneurship Development Programmes in

small scale industry

iv. To know the various sources of finance available to entrepreneurs in Nigeria

1.4 Research Question

i. What is the effect of entrepreneurship development in the Nigeria economy?

ii. Does Entrepreneurship Development Programme improve management skill of small

scale industries?

iii. What are the problems affecting Entrepreneurship Development Programmes in small

scale industry?

iv. What are sources of finance available to entrepreneurs in Nigeria?

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1.5 Research Hypothesis

Ho1: There is no significant relationship between entrepreneurship and economic

development

There is significant relationship between entrepreneurship and economic development

Ho2: There is no relationship between entrepreneurship development programme and small

scale industries

There is significant relationship between entrepreneurship development programme and

small scale industries.

Test of Hypothesis three

Ho3: There is no significant challenges affecting entrepreneurship profitability in Nigeria

Hi: There is significant challenge affecting entrepreneurship profitability in Nigeria

1.6 Significance of the Study

The study of “Impact of Entrepreneurship in the economic development will be beneficial to

individuals, communities, entrepreneurs and government at large. This study will be of

immense advantage to various groups of people concerned with entrepreneurship business.

The result of the study will also contribute to the growing literature available on

entrepreneurship. This project is intended to contribute to entrepreneurship in economic

development in Nigeria. The study will be useful for current and future entrepreneurs. The

knowledge obtained in the study will faster the evaluation of the impact of entrepreneur and

in particular the study will demonstrate how entrepreneur development could improve a

forward of prospective and satisfy entrepreneur. In fact, it will demonstrate how nation could

achieve self-reliance through entrepreneurship development.

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1.7 Scope of the Study
This study will adopt the information obtained from the case study, centre analysis of
available information for attempt will be made to collect primary data from Unifoam Nigeria
Limited, along Asa dam, Ilorin, Kwara State, Nigeria.
1.8 Limitation of the Study
The limitation of this study includes stress involve in getting relevant materials due to the
nature of the study as many respondents decided to hold on to the vital information relating to
their personal activities.
There are certain factors which may constraints the carryout out of a good research work they
are as follow:
Finance: The researcher on many occasions have to travel to the factory office to collect
necessary information and the researcher spent a lot of money on transportation.
Time Factor: Also, time factor has been another major constraint in the course of this project
for instance; we combine the final year work with writing of the project.
Attitude of Worker in the Industry: At times, the lukewarm attitude of the workers creates
some hindrance for the timely collection of adequate and reliable information.

1.9 Definition of Terms

Impact: Having a strong effect on someone or something.
Development: The act or process of growing or causing something to grow or
Economy: An economy is the large of inter-related production and consumption
Entrepreneur: A person who set up a business or businesses taking on financial
Entrepreneurship: Refers to the concept of developing and managing a business
An organization or economic system where goods and services are exchanged for
Business idea is a concept that can be used for financial gain that is usually centered
Enterprise: Enterprise is another word for a for-profit business or company, but it is most
often associated with entrepreneurial ventures.

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 CHAPTER TWO

LITERATURE REVIEW

2.0 Preamble

This chapter was divided into four section. The first section focus on the conceptual review,

the second section focus on the theoretical review of the study, the third section focus on the

empirical review while the last section look at the gap the study intend to fill.

Entrepreneur is often a rather vague abstraction which is subject to various interpretations

(Haris 2017) the American Heritage dictionary by Webster describes an entrepreneur as one

who organizes, operates and especially assesses the risk of business ventures. “An

entrepreneur is the only one who always searches for change response and opportunity”

(Peter Drucker, 2016).

Glueck (2018) defined an entrepreneur as an individual who creates a new firm and continue

to manage it until it is successful. There are two types of entrepreneur, the one who sets up a

business of his or her own and the one who is hired by the manager to manage a business

which he or she does not own (Fleet, 2016)

An entrepreneur is also known as an action oriented highly motivated individual who has

ability to see and envisage business opportunities, gather necessary resources to take

advantage of them, initiates appropriate action to ensure success and takes risk to achieve

goals.

2.1 The Concept of Entrepreneurship Development

The term entrepreneur was first used in the early 18th century by an Irish Man by name

Cantillon (2015) who was then living in France. The term therefore is a French word.

Entrepreneurship is a term used broadly in connection with the innovative modern industrial

business leader. He has been described as the person who perceives business opportunities

and takes advantage of the scarce resources to use them. It is He alone who bears the non-

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insurable risks in his enterprise and it is He who directs the human and material resources in

his business objectives.

To qualify as an entrepreneur, it is not sufficient to be a business man just managing an

enterprise. He has to be an originator of profitable business ideas. According to Schumpeter

the single function which constitute entrepreneurship is innovation. Whilst the business

director is mostly engaged in managerial activities which are non-entrepreneurial. The

emphasis must be placed on the ability to gain command of and combine resources in a new

way which will be profitable. The entrepreneur must be prepared to risk his personal energy

and financial resources to achieve unpredictable results.

2.1.1 History and Development of Entrepreneurship In Nigeria

Although some people contend that the earliest beginnings of entrepreneurial theory date

back to the writings of Richard Cantillon (2016), most scholars agreed that there are no

serious theoretical studies and formulations on entrepreneurship until the works of Max

Weber and Joseph Schumpeter. Other prominent writers in the field include David

Mcclelland, Le Vine, Everett Hagen, Edithpenrose, Thomas Cochran, Frank young, John

Kunkel, Akeredolu-ale, Olakanpo, Schatz and Edokpayi (2015).

The theories postulated by these authors most of which are aggressively empirical are very

diverse. They range from sociological, psychological, and economics imperatives. Some

authors attempt to relate the emergency of entrepreneurs to religious, social and cultural

characteristics.

The only conclusion from these theories can only be that, several factors, not just one explain

why an individual goes into business. In Lile’s words, “certain kinds of experiences and

situational conditions, rather than personality or ego are the major determinants of whether or

not an individual becomes an entrepreneur”.

There have been some studies of Nigerian entrepreneurship in industry. Some of the early

studies include Schats and Edokpayi (2016).

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Schatz and Edokpayi, in their 1962 study which was limited to former Western Nigeria. They

wanted to determine the reactions of Nigerian Businessmen to Government measures to

encourage Nigerian private enterprise. Although they warned that their study has serious

reliability problem, inspite of this short coming, their findings reflects the following

• Most Nigerian businessmen believe that inadequate capital is their main problem.

• Most of their respondents complained about lack of organizational and management

skills and

• Five indigenous banks responded that the businessmen mis-applied the loans for

another purpose

Another finding reported by Schatz and Edokpayi (2015) in their paper on Economic attitude

of Nigerian businessmen is the inability of Nigerians to form partnerships with fellow

Nigerians due to financial untrust worthiness and with expatriates due to insufficient capital,

insufficient knowledge, ability and experience.

A critical review of the findings shows that inspite of the reliability problem which the

researchers warned about their study, the findings still reflect the reality on the Nigerian

businessmen complain loudly about inadequate capital and are silent about the problem

regarding their lack of management skills/expertise which seems to be the greatest problem

facing Nigerian businessmen. The problem of inability to form partnership is also there.

Olakanpo (2017) limited to the supply of indigenous entrepreneurship in the distributive

trade. His study was restricted to indigenous trading shops in Lagos, employing less than 5

people. A cursory review of Olakanpo’s study highlights the need for management

competence on the part of indigenous enterprises. Olakanpo’s (2016) findings on

management and capital are also consistence with the findings of Schatz and his colleague.

Harris in his study (2016), tried to isolate the principal determinants of Nigerian

Entrepreneurial activity in industry. His study covered 269 firms (250 fully indigenous and

19 joint ventures with dominant Nigerian interest) in saw milling, furniture, printing, rubber,

9
processing, etc. his study thus covered industries with low level of technology and low

investment thresh told.

In general Harris found that the main bottle neck confronting the Nigerian entrepreneurship is

the shortage of technical and managerial personnel. This agrees with kilby’s position. Harris

found out that Nigerian entrepreneurs perform well in.

• The perception of opportunity and

• The gaining of command over the resources to establish a firm but perform badly in

the management of the ongoing enterprise. He opined that the “ability” to respond to

industrial opportunities rather than “willingness” appears to be the primary deterrent to the

expansion of effective entrepreneurship in Nigeria.

Akeredolu – Ale in his 1968-70 study involving 52 full indigenous limited liability

companies in Lagos State, He explored the relationship between

• Capital (Venture and working)

• Expatriate Competition

• Organizational form of indigenous companies

• Group properties of the indigenous entrepreneurial elite on the one hand and their

performance on the other.

A review of Akeredolu – Ale findings shows that the problem of capital and inadequate

management skill in indigenous enterprises has re-echoed.

The Nigerian business environment offers many entrepreneurial opportunities. With the

Nigerian enterprises promotions Decree of 1972 which was revised in 1977 and with various

Federal and state business assistance, the economic environment is encouraging for business

pursuit. Eight was established then. The aims of this is to help indigenous businesses in

acquiring necessary capital, the requisite technical knowledge and the essential managerial

know-how. The small industries Division of the Federal Ministry of industries was also

instituted to further the interest of small scale industrialist

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2.1.2 Characteristics and Role of an Entrepreneur

Psychological Characteristics

• They have high need for achievement and success

• They posses strong desire for responsibility and independence

• They have a high degree of self confidence

• They do not like routine work, they venture some and like to experiment

a. Sociological Characteristics

• Entrepreneurs are goal-oriented

• They have capacity to adapt to changing conditions

• They have ability to organize men, materials, money and machines to achieve goals

b. Economic Characteristics

• Profit-Oriented. The entrepreneur accepts profit as legitimate reward for enterprise

• Risk taking ability

• Ability to innovate and speculate

In summary, the entrepreneur is a risk TAKER. He has a high need for achievement. He

detests routine work. He has the ability to identify economic opportunity and to mobilize and

organize resources to tap the opportunity with a view to making profit.

c. The Role of the Entrepreneur

As a prime mover of change, the entrepreneur plays a very strategic role in the

economy. His functions may be summarized as follows.

• He identifies business opportunities, mobilizes and organizes the resources to tap the

opportunities. Once he discovers a business opportunity he sets about gathering men, money,

materials and machines to exploit the opportunity. This activity entails careful business

planning.

• He carefully implements his business plans to ensure achievement of his goals.

• He markets his products, services and ideas

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• Effective performance of the finance and production.

• Innovation through improvement of methods of production or technology

• Monitors and responds to the environment by keeping abreast of what is happening in

his environment, the entrepreneur is in a position to respond appropriately to changes, threats

and opportunities in the environment.

2.1.3 Risks and Rewards of Entrepreneurship In SMEs

Risks: The risks of entrepreneurship can be classified into three viz. Financial, career and

personal risks

Financial Risks: The risk here arises from losing the capital (Venture & working) invested in

the business

Career Risks: The risk here arises from the possible difficulty in returning to his former

profession after resigning to start a new enterprise

Personal Risks: The extent of personal risk is so difficult to capture. The risk here involves

one’s family, friends and other associates whose reactions may be harder to predict than

one’s own.

Starting a new company demands the commitment of one’s energy, leisure time, it entails a

lot of sacrifices on the part of the entrepreneur, his family, friends and associates. These

factors put a lot of strain on the family and other relations. The prospective entrepreneur

should therefore carefully compare his future life as an entrepreneur with his future life on his

current job.

REWARDS:- The reward of successful entrepreneurship include

1. The chance of accumulating a lot of wealth, fame, social distinction, and recognition

from the use of one’s talents and energies in building a successful company of his own.

2. Possibility of receiving a disproportionately high return on investment of energy, time

and worry, relative to other equally talented hardworking people. Nothing succeeds like

success.
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Advantages

• Closer touch with customers, employees and suppliers

• More cordial relationship with customers and employees

• Can offer customers personalized service

• More intimate knowledge of the community and therefore easier, environment in a

beneficial way

• Less complex organization to manage

• Low over head and operating costs

Disadvantages

• Limited market share

• Poor competitive position

• Limited growth potential, usually due to limited financial resources

• Not usually the best candidates for Bank financing

• Usually do not state the principal promoters

2.1.4 Role Of Small scale enterprise in Developing our Economy

SME is the backbone of successful economies like USA where over 23 million small

business employ more than 50% of the private workforce and generate more than half of the

nation’s GDP

E.U:- SMEs are seen largely as essential for European employment. Each year one million

new SMEs are set up in the E.U, SME’s account for 99.8% of all companies and 65% of

business turn over in the E.U

TAIWAN:- 70% of jobs are generated by production activities that employ less than 20

workers each. 40,000 firms account for 75% of its exports.

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It is undoubtedly accepted that small scale business forms the bedrock of any nation’s

industrial take off especially in a typical developing country like Nigeria, in the following

ways:

1. SMEs provides more employment per unit of capital invested because they are

generally more labor intensive

2. SMEs would aid larger industries by manufacturing raw material input and generally

act as catalyst to larger industries thereby generating the desired forward and backward

linkages required to build a healthy vibrant industrial base

3. SMEs encourage indigenous entrepreneurship which will help to develop man-power

techniques. SMEs will also help develop our non-oil sector especially agro allied industries

which may offset rural migration.

4. SMEs will help form the technological base where such industries would start from

small units operating and innovating indigenous technology to suit our particular needs and

utilizing local value of resources products, equipments and man power

5. SMEs generally source their raw materials locally while a good number of larger units

rely on imported raw materials. In this era of scarce foreign exchange, industries that source

their raw materials locally stand a better chance of becoming more prosperous

An overall look at the SMEs sector would reveal macro-economic facts pointing to

developments that would enhance more income parity, raise capacity utilization of industries,

lower inflation by producing more and creating competition.

Further development of SMEs would also increase GDP and will overall raise the standard of

living of all Nigerians.

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2.1.5 Challenges of Self Employment For Nigerian

In the face of the serious and growing threat of unemployment in Nigeria today, the need for

the Nigerian graduate of today to seek avenues for self employment and self fulfillment now

seems impelling

In the 1960s the problem of unemployment in Nigeria was basically that of primary and

secondary school leaver. One popular explanation then was that these school leavers were ill-

equipped and lack specific skills to offer the labor market. The explanation however, is now

largely irrelevant today as even well quipped graduates in almost all disciplines now find that

the Nigerian labor market no longer has enough jobs for them. Thus, rather than employers

vainly searching for skills that are not there, the situation has become one of skills vainly

searching for jobs that are not there.

It is crystal clear that generally unemployment is unacceptably high and that it is here to stay

except we do something about it. In fact it is here to increase:

1. As universities, polytechnics, monotechnics, colleges of education’s, satellites,

university campuses turn out thousands of graduates every year.

2. The Nigerian economy as it is presently run does not have the capacity to absorb

chains of thousands of unemployed youth.

In other words, the Nigerian graduates of today can no longer rely on the Nigerian labour

market to provide him/her job. He has to invent an alternative source of employment which is

Self-Employment:- In addition to providing avenues for gainful employment offers particular

advantages to the self employee

1. It offers the employee the opportunity of engaging in the trade or business talents.

2. Successful self employment creates in the employed a sense of fulfillment and

satisfaction

3. The self-employed does not need to undergo job-selection interviews. He does not

need to please big boss or personnel manager in order to obtain good end of year reports and

15
recommendations for promotion. In fact the main external influences he is subjected to occur

in his interaction with banks when he/she want to borrow money, clients when he/she wants

to buy raw materials and sell his products and other similar transactions

4. The self employed is thus a creator and master of his fortunes. He/she decides his own

work programmes, work hours, what to produce where to produce. In effect he is the sole

arbiter of his fitness to establish and run a business.

This therefore, puts a heavy responsibility on him and he to be a good entrepreneur. The

practical challenges which will confront any graduate wishing to establish a business of his

own are well known. They are the same problems which confronts any prospective business

man. They include:

1. Mobilization of capital

2. Identifying a potentially viable project

3. Ability to run the business profitably

4. Meet stiff competition from other firms in the industry among others.

The unemployed Nigerian graduate who wish to go to business should further more recognize

that a business man is a risk-taker. In his business he either makes profits or losses.

Besides, every firm in its formative years, that is during its gestation period, invariably makes

losses, it is only later if it succeeds that it eventually breaks-even. Thus the most serious

challenges that will perhaps face the Nigerian graduate who establishes his own business is

how to cope with the initial period of loss and how to break even in this critical period.

2.1.6 Entrepreneurship Development in Nigeria

In Nigeria, entrepreneurship sector until a few year ago, consists mainly of household units

carrying on diverse types of industrial activities in the traditional manner, most of these units

do not employ and paid workers. Establishment of this type can be found in a wide variety of

manufacturing like weaving, tailoring shoe making corn milling e.t.c. The typical enterprises

16
is one man`s unit of self employed artisan, but the typed small scale establishment now are

conventional small unit working antiquated method and paying substance salaries, rather they

represent the worker man, efficient small manufacturing enterprises which has been the

production of durable consumer goods, simple machine component equipment and some

basic industrial chemicals.

Entrepreneurship abound today in almost every street in Nigeria. They engage in either

production or commercial service and in each case, struggling to survive. Fortunately, they

have a good prospect in that they are high blood of society and as unavoidably necessary.

The major issues that have dominated research on Nigeria entrepreneurship, since the sixties

when interest in this area of study began are shortage of capital, availability of real business

opportunities to Nigerians, inclement economic environment and entrepreneurship

deficiency. Each of these factors has been identified by different researcher as the major

obstacle to the development of Nigeria entrepreneurship in the fifties and most of the sixties

economist believed that shortage of capital was the principal obstacle to development of

developing countries.

In the wake of economic nationalism at independence, providing loan to private

entrepreneurs was adopted as a means stimulating their developments. The federal loan

Board and three loan board were established to provide loan to Nigerian entrepreneur. The

Yaba industrial estate was also created to provide facilities and services to them. Recently,

the National Economic Recovery Fund (NERFUND) was established for the same purpose.

Schatz (2016) studied these institution and one of his major conclusion was that the claim of

constitution capital shortage being an obstacle to development of Nigeria entrepreneurship

was false what really existed according to Schatz was a shortage of commercial viable

projects.

17
Harries and Rowe (2015) also came to similar conclusion after a survey of Nigeria

entrepreneurs in diverse industries. The conclusion has generated a great deal of controversy

because of the popular belief in the storage of capital thesis.

Hafziger (2017) contended that Schtz1s analysis did not fail in the first year of operation of

the firm which (Schatz) interpreted to mean lack of viability was not high among small firm.

Diaku, (2014) Schatz`s analysis and conclusion were forty because the demand of successful

application to the Federal loan Board could not be constructed as consisting effecting

demand. For capital in Nigeria. On top of these arquments, surveys (Akeredolu and Lewis

2014).

Osoba, (2017), shows that entrepreneur consistently single out capital shortage as a critical

problem limiting their economic performance.

Ogunseye & Akeredolu (2017) have pointed to historical factors in the underdevelopment of

Nigerian entrepreneurship. Akeredolu (2016) particularly posts that inspite of the favourable

business condition of post 1946 era, the emergence and performance of Nigeria entrepreneur

were hampered by such historical factor as the operation of the marketing board which

precluded the rise of a substantial indigenous capital earning class. The other historical factor

were the activities of expatriate companies which either discouraged or exclude indigenous

entrepreneurship from entering the manufacturing industry and the concentration of Nigeria

nationalists on the goal of political independence to the neglect of economic independence.

These factor defined the situation for potential entrepreneurs and had overwhelming effect on

their emergence of performances.

Even a political Nationalism changed to economic nationalism in the late sixties and early

seventies, and surplus fund of the oil boom era were readily available to Nigerian

entrepreneur through various assistance programme.

18
Akeredolu Ale (2016) insisted that the vast majority of Nigerian businessmen were really

inadequate in term of orientation and motivation. The validity of this statement can only be

verified by empirical evidence.

2.1.7 Problem Affecting Entrepreneurship Development In Nigeria

Several studies have however been conducted in Nigeria to identity why entrepreneurs fail

and why entrepreneurial talents are lacking. Way back in 1972, the centre for industrial

Research and development of the then University of Ife (Now O.AU) Summarized the

problem of entrepreneur, some of these problems that have been identified by different

researcher as the major obstacle to the development of Nigeria entrepreneurship.

1. High Cost Of Capital: The security of the problem varies one economic activities to

another with deregulation cost of borrowing is so high in Nigeria Resources at the disposal

of new institution like the NDE, people`s Bank and Community Bank are limited and cannot

go round in Nigeria, which conditionality associated with institution like the NERFUND is so

though that most entrepreneur cannot meet.

2. Poor Method of Production: The level of output can be readily increased by

increasing the productive capacity through the use of more efficient machines. Alternatives,

the level of output can be increased by changing the current method of production using

different event types or grades of worker. Both of these factors are to be beyond the capacity

of entrepreneur. Therefore, low level of technology of production coupled with the inability

of entrepreneur to contract, the right caliber of human resources are factors leading to poor

method of production.

3. Problem Of Raw Materials: A major constraint faced by entrepreneur in Nigeria is

how to meet up with their raw material needs. Procurement in most of the time is irregular.

Entrepreneur lack the credit to buy and store bulk raw material when the prices are low. They

have limited bargaining power in negotiating purchasing contracts (Richardson, 1983) partly

19
because of the problem encountered by the entrepreneur in the procurement of raw materials

which result in high cost of production.

4. Poor Education Background: Poor education background of most entrepreneur is a

major problem in Nigeria. Majority of the enterperneur are illiterate or semi illiterate who

have nothing to do but start up a business. Because of this educational problem most of them

again employ personnel which are not well trained in order to pay less.

5. Lack of Stable Government Policy/ Misconception of Government Policies:

Nigeria entrepreneur often find it difficult to understand and interprets government policies

regulations, action to their best advantages.

Also, there is no stable government policy, for example on entrepreneurship place order for a

machine when a custom duty was 12% before the arrival of these machine, custom duties

have increased to 25%, the entrepreneur find it difficult to clear the goods. The unstable

government policy is caused by unstable political and economic situation of the country.

2.1.8 Impact of Entrepreneurship on Nigeria Economy

Public debates on the contribution of entrepreneurship to country’s economic development is

continuing, all level the debates appears to be fire by the growing awareness of the potential

social and economic importance of a viable entrepreneurship sector. The evaluation of the

contribution of entrepreneurship to Nigeria economy would be undertaken principally from

the standpoint of public goals as enunciated in the industrial policy of 1988. this is because

the usual performance criteria like capacity, utilization may not be much relevance if they do

not contribute toward the Nigeria economy (Maxwell, 2018).

An important aspect of economic growth in any country is the key individual who promotes

change and initiates development activities because they have the ability to identify needs

within their environment. The more entrepreneurs a nation has the better are the chances for

accelerated economic development. The contributions of entrepreneurs to the economic

development are as follows.

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1. Stimulating Indigenous Entrepreneurship And Technology: The social

importance is attributed to the influence in stimulating indigenous entrepreneurship and

technology that by acting as a scabbed or nursery, usually for the indigenous population, they

serves as vehicles for the propagation and diffusion of innovative ideas of far reaching

dimension of no less importance although open to debate is their role in providing avenues

for “moonlighting” thus contributing to labour stability in those sector (such as in the public

of developing countries) prone to high rate of labour turnover due to wages inequality.

2. Transformation Of Traditional Industry In Nigeria: A Second social contribution

of entrepreneurship is the transformation of traditional industry in Nigeria. The traditional

sector has served and continues to serve as the springboard for launching a vibrant modern

sector. To a greater extent in the former, the modern sector has evolved through a structural

transformation of modernization of this traditional type cottage or artisan industries.

3. Employment Generation: The entrepreneurship continues to be steady avenue for

Employment generation. There are indication that the entrepreneurship account for about

70% of industrial employment in Nigeria. For instance project approved under the

NERFUND scheme between 1989 and 1999 were estimated to have direct employment

generation capacity of 46, 227 jobs. Similarly, about 60, 412 jobs have been created by the

beneficiaries of SMEs 11 loan scheme. Arising from their more copious use of labour,

entrepreneurship are credited for being one of the effective ways of taking the problem of

unemployment. They are also regarded as a means of engendering equity in the distribution

employment opportunities as well as income between the urban and rural localities and

residents respectively.

4. Increased Use Of Local Raw Materials: The entrepreneurship have been very active

in the promotion of increased used of local raw materials. They have responded very

positively to utilizing identified local raw materials and have often pioneered the processing

of such raw materials, this is because most entrepreneurship are local resources based.

21
Although there is no complete information, there are abundant evidence that over the years

the number of entrepreneurship established to utilize raw material have increased

5. Increased Manufactured Exports: The contribution of entrepreneurship in Nigeria

economy has also been very active in non-oil export sector. Available data shows that the

value of agro allied and manufacture exports, which was about N54.3million in 1989 rose

progressively to N140.3million in 1993 to N100.78 and N6067.1million in 1995 and 1999

respectively. Among the processed agro allied products, exported were cocoa butter, cocoa

powder, cocoa cake, textile and garment and wood product including furniture. It is

significant to note that these are the area in which the entrepreneurship role in the export of

scraps and solid minerals such as precious stones in enormous.

6. Industrial Dispersal And National Integration: Most entrepreneurship in Nigeria

are local source based, their wide. Geographical dispersal have opened up the rural areas and

helped in arresting the problem of rural urban drift. They have often also served as a means of

linking hitterto remote area to other part of the country this contributing to national

integration.

2.1.9 Characteristics of Entrepreneurship And Entrepreneurs

Scholars do not agree on the characteristics possessed by entrepreneurs. Hence, several

scholars through various studies identified several characteristics or traits possessed by

entrepreneurs some of which are discussed as follows. For instance, Rockstar (2018)

recognized the characteristics of entrepreneurship as:

Creative Activity: Entrepreneurship entails innovations. It deals with product innovation,

production techniques innovation while bearing in mind the market.

Dynamic Process: Entrepreneurship is a dynamic process that has to bear in mind the

dynamic business environment.

22
Purposeful Activity: Entrepreneurship is an activity embarked upon for a specific purpose.

This could be for profit making purposes, for humanitarian purpose or to bring a difference to

the market.

A careful look at the characteristics listed above reveals that some of them overlap while

most of them are divergent thereby further fuelling the debate. Some of these characteristics

are briefly discussed below:

Risk Bearing Ability: The entrepreneur must have the capacity to bear risk. This is because

the new nature is created in an uncertain and risky environment.

Di-Masi (2015), however, noted that although risk bearing is an important element of

entrepreneurial behavior, many entrepreneurs have succeeded by avoiding risk where

possible and seeking others to bear the risk. Basically, what he is saying is that entrepreneurs

bear calculated risks and are more than glad to let others bear their risk when it is convenient

for them.

Technical Knowledge: Depending on the kind of venture created, the entrepreneur must

have technical expertise about production techniques and marketing.

Ability to Gather Financial and Motivational Resources: Financial and motivational resources

are needed for the creation of the new business. Sometimes the entrepreneur as an individual

may not have these resources but he/she/they should have the ability to gather if from those

who have it.

Self confidence and Multi-Skilled: The entrepreneur must have self confidence and believe

in him/herself. Self confidence is an important characteristic that enables individuals to

handle any situation without having inferiority or any other types of complex. The

entrepreneur also has to be a jack of all trade and master of all. He/she must possess different

skills unlike other individual. For instance, assuming an entrepreneur is a marketer, the

entrepreneur should not only possess marketing skills and interpersonal skills but also

23
language skills i.e ability to speak more than one language. This definitely will be an added

advantage.

Confidence in the Face of Difficulties and Discouraging Circumstances: The entrepreneur

must be steadfast and resolute and be ready to move on even in the face of adversity. He/she

should be a 'never say never kind of person; everything is possible for the entrepreneur.

2.1.9 Sources of Funds For Entrepreneurship

The choice of individual entrepreneur will be determined by the following as suggested by

(Olannye and Oyibi, 2017)

i. Knowing the number of sources of funds available

ii. Risk involves

iii. The duration of financing whether it is short term or long term.

iv. The cost of borrowing from each source

v. Government restrictions and institutional constraints

vi. The value and nature of assets as security or collateral

The various sources of funds for business ventures are classified under the following:

The Personal and family sources

a. The Internal sources

b. The External sources

This source of finance is peculiar to a new venture, although it may also be applicable to an

existing venture particularly loans from friends and relations as explained below:

Loan from family and friends: - Family members often want L to support other family

members venturing into business, hence part of the venture funds are contributed in form of

loans or gifis. Also, friends support through loans and sometimes gifts to encourage their

friend that is starting a business.

Internal Sources

24
An internal source of fund is peculiar to an existing venture. The internally generated funds

can emanate from the following sources:

Retained profits: it is an accepted practice to finance the fixed and working capital

requirement from profits generated from the previous business activities of the venture.

Provision: provision for tax and depreciation are another internal source of finance. Since

business tax are payable a year after profits have been declared, this amount could serve as a

source of fund for small business firm. Furthermore, annual provisions for depreciation

represent cash retained by the enterprise over and above the normal undistributed profit.

Reducing current asset: reducing current assets is a source of fund and large amount of

money could be made available for financing the activities of the venture.

External Sources

The external sources of funds are those that are obtained outside the venture. The external

sources can be sub-divided into three namely;

a. Short- term finance

b. Medium term finance

c. Long term finance

A Short term finance: Short term financing involves obligation debts that have maturity date

of less than one year. The typical example of short term finance includes goods purchased on

credits, outstanding short term loans from banks/ accrued payment such as deferred taxation,

salaries and wages etc. Some of the methods of short term financing are;

i. Open account or Trade credits/ Account payable: - It is a form of financing in which

the seller extends credits etc customers. The credit is reflected on the entrepreneur's balance

sheet as accounts payable, and in most cases it must be paid in 30 to 90 days.

ii. Account receivable financing: - It is a short term financing that involves either the

pledge of receivables as collateral for a loan or the sale of receivables (factoring).

25
 Accounts receivables loans are made by banks, factoring is done primarily by finance

companies and factoring concerns.

Bank overdraft facilities: having a current account with a bank provide the opportunity to

draw above the balance in the account. The customer who overdraws his/her account pays

both the overdrawn account plus the interest on the amount overdrawn.

Note payable: these are payment to banks (commercial) individuals or firms in which the

maker of such notes endorses them in favour of the payee. A typical example of notes

payable is a promissory note which is a short term marketable debt security in which the

borrower promises to pay a stated sum on a stated future date, also known as one-name paper

or commercial paper.

Commercial draft: - It is a short term credit instrument, it is similar to a promissory note,

except that the payee creates the draft in which the drawer indicates the time draft or sight

draft requiring payment on presentation.

Bill of exchange: - A bill of exchange is a marketable short time debt security in which one

party (the drawer) directs another party (the acceptor) or draw to pay a stated sum on a date.

Loans from acceptance houses:- It is a method of borrowing on short term basis from

banks, this method has the advantage of securing funds needed and at the required time. A

letter of credits is a good example.

Specialized Institutions: Some specialized institutions were established to provide credit

facilities to the small and medium scale enterprises, such institutions include microfinance

banks, cooperative banks, agricultural development bank etc.

Factoring: - It is a method of short term financing where debts are sold to a factor by an

arrangement. A factor then assumes all the credit risks associated with the account

receivables. Though costly, factoring has the advantage of converting an account receivable

into cash and thus saves the seller the stress of pursuing payment.

26
Discounting bills: - Similar to factoring in many ways, discounted bills are used by firms

with lump sum of funds tied in receivables or marketable securities who require immediate

cash. Instead of approaching their banks for loans, the firms approach finance houses to

discount their receivables and marketable securities upfront by receiving cash lower than face

value of the receivables.

2.2 Theoretical Framework

Resource Based Theory

The work was anchored on Resource Based theory propounded by Penrose (1959) in her

work, “The theory of the Growth of the firm”. The resource based view of firm is based o n

two assumptions: Resource diversity and Resource immobility. Resource diversity: This

pertains to whether a firm owns a resource or capability that is also owned by numerous other

competing firms, then that resource cannot provide a competitive advantage.

Resource immobility: This refers to a resource that is difficult to obtain by competitors,

because the cost of developing, acquiring or using that resource is too hard. The

aforementioned assumptions are used to determine whether an entrepreneur is able to create a

sustainable competitive advantage by providing a framework for determining whether a

process or technology provides a real advantage over the market place. The resource based

view hold that small scale enterprise is facilitated when there are capabilities and resources

which the entrepreneur either possesses or can acquire and deploy in sustainable manner.

Penrose (2016) argued that it is only with appropriate resources and capabilities that can be

deployed in a sustainable manner over a long term that entrepreneurs achieve sustainable

competitive advantage and success.

The theory holds that an entrepreneur achieves resounding success when there is good

understanding of the resource potentials, through good vision, intuition and creative act, an

entrepreneur chooses a particular business where resources that are valuable, rare, hard to

copy and resources that are non-substitutable, the entrepreneur will not only be able to

27
succeed but enjoy long term competitive advantage and economic success. Without

sustainable competitive advantage entrepreneurs successes are ephemeral as competitors

quickly obliterate the successful outcome of the initial effort (Udu, et al 2018).

The theory laid emphasis on the need for an entrepreneur to posses the required capabilities

and resources as prerequisite condition necessary for achieving a sustained competitive

advantage. The aforementioned addresses the need for small scale enterprises to be proactive

giving the changing business environment. In the light of the foregoing, small scale

businesses that wish to survive in a changing business environment must possess an

exceptional skill that would guarantee good understanding of the economic environment in

attempt to achieve a sustained competitive advantage.

The Keynesian postulations emphasize that demand management policies can and should be

used to improve macroeconomic performance and sustainability. That is, macroeconomic

policies should involves setting monetary and fiscal variables in each time period at the

values which are thought necessary to achieve the government’s objectives (Abata &

Bolarinwa, 2018). Although Keynesian theory is of the view that the private sector is

inherently unstable, it is subject to frequent and quantitatively important disturbances in the

components of aggregate demand. It is the task of counter cyclical or stabilization policies to

offset these private sector disturbances and so keep real output close to its market-clearing

equilibrium time path (Omitogun and Ayinla, 2017).

Therefore, based on the Keynesian economic growth model financing SMEs should be part of

macroeconomic policies of government in which both the fiscal and monetary policies should

recognize to achieve the desired levels of economic growth and development of Nigeria. In

view of this, Zeller and Sharma (2018) argue that microfinance can aid in the improvement or

establishment of family enterprise, potentially making the difference between alleviating

poverty and economically secure life.

28
On the other hand, Burger (2015) indicatesthat microfinance tends to stabilize rather than

increase income and tends to preserve rather than to create jobs. However, Buckley (2016)

came to the conclusion that there was little evidence to suggest that any significant and

sustained impact of microfinance services on clients in terms of SME development, increased

income flows or level of employment. The focus in this augment is that improvement to

access to microfinance and market for the poor people was not sufficient unless the change or

improvementis accompanied by changes in technology and or technique.

Diagne and Zeller (2015) on the other hand argue that insufficient access to credit by the poor

just below or just above the poverty line may have negative consequences for SMEs and

overall welfare. Access to credit further increases SME's risk-bearing abilities; improve risk-

copying strategies and enables consumption smoothing overtime. With these arguments,

microfinance is assumed to improve the welfare of the poor and economic development.

Therefore, microfinance institutions that are financially sustainable with high outreach have a

greater livelihood and also have a positive impact on SME development because they

guarantee sustainable access to credit (Rhyme and Otero, 2015). This paper is an attempt to

investigate the effect of financing by microfinance institutions and commercial banks on the

economic development of Nigeria.

2.3 Empirical Review

Abiola (2016) carried out a study on Small and Medium Scale Enterprises in Nigeria: The

problems and Prospects. The objective of the study was to examine the role of Small and

Medium Scale Enterprises in Nigeria in relation to those challenges which affect SMEs from

developing capacity to realizing its full potentials as well as the prospect for improvement

and development for employment generation, economic growth and national development.

The study employed a descriptive research such that structured questionnaire was

administered to the sample drawn from the population of the study. The data collected were

analyzed with Chi-square (X2). It was revealed that small and medium scale enterprises plays
29
a pivotal role in the socio-economic well being of the citizenry if properly and carefully

managed. From the findings, the study therefore concludes that invigorating Small Medium

Scale Enterprises (SMEs) with strengthened commitment to economic reform would offer a

turning point in facilitating the recovery of Nigeria economy and national development.

Ayozie, (2015) conducted a study on the implications of Small and Medium Scale Enterprises

(SMEs) on socio-economic development in Nigeria. The objective was to determine the

effect of Small and Medium Scale Enterprises (SMEs) on Nigerian economy. The study

employed a survey research design of which structured questionnaire was administered to the

sample drawn from the population of the study. The data collected were analyzed with chi-

square (X2) and it was found that Small and Medium Scale Enterprise (SMEs) assist in

promoting the growth of the country’s economy, hence all the levels of government at

different times has policies which promote the growth and sustenance of SMEs, and therefore

concludes that Small scale industry orientation is part of the Nigerian history. Evidence

abound in the communities of what successes our great grandparents, made of their respective

trading concerns, yam barns, cottage industries, and the likes.

Kriss (2018) conducted a study on the Impact of Small and Medium scale enterprises on the

Economy. The study was aimed at determining the impact of small and medium scale

enterprises on the economy. The study employed a survey research design of which

questionnaire was administered to the sample drawn from the population of the study. The

data collected were analyzed with Chi-square (X2). It was found that the contributions of

small scale enterprises to the economy cannot be over-emphasized because it provides job

employment for the people and enhance their standard of living. Therefore concludes that the

Government at all levels should provide succor to the small scale enterprises by way of

advancing loan, sensitization programmes to encourage entrepreneurs.

30
 CHAPTER THREE

METHODOLOGY

3.1 Preamble

This chapter describes the methods and procedures adopted in carrying out this study. To this

end, this Chapter was divided into the following sub-headings; Research Design, Population

of the Study, Sample and Sampling Techniques, Research Instruments, Validity and

Reliability of Instruments and Method of Data Analysis.

3.2 Research Design

This research adopted survey research method. The method focuses on the population or the

universe in which data collected from the said population are used for intensive study and

analysis. A sample from a subset of population or universe is carefully selected to present the

characteristics of the population. This provides the opportunity to generalize the findings of

the study for the whole population. The research designed to investigate the impact of

Entrepreneurship on Economic Development Growth in Nigeria using Unifoam Nigeria

limited, Ilorin as a case study. Variables relating to entrepreneurship and economy

development. A likert scale ordinal level measurement of Strongly Agreed, Agree Undecided,

Disagreed as well as Strongly Disagreed are used.

3.3 Population and Sample Size

The population of the study would constitute all staff in Unifoam Nigeria Limited. However,

since the intention of this study is to examine the impact of Entrepreneurship on Economic

Development Growth in Nigeria, emphasis was placed on Unifoam Nigeria Limited, Ilorin

because of easy accessibility to staff and customer of the company product from the

manufacturing. Since it was almost impossible to know the true population of customers, in

line with Attewell and Rule (2015), a theoretical sample was used. A hypothesized sample

31
size of 60 will be used for this research work as suggested by Attewell and rule (2015) in case

of an infinite population for the customer respondents.

3.4 Method of Data Collection and Instrument

For the purpose of this research work, primary source of data collection was utilized. This

refers to the data collected from the field by the researcher.

The questionnaire titled impact of Entrepreneurship on Economic Development Growth in

Nigeria. The questionnaire was divided into two parts. The first part was based on

respondent’s personal data. These include sex, age, education, marital status and academic

qualification, while the second part contains items on the advertising on consumer buying

behavior. The Likert five point’s scale was used in scoring the respondents on their personal

views as regards the subject matter. The respondents reacted to the statement by ticking

strongly agreed (SA), agreed (A), undecided (U), disagreed (D), or strongly disagreed (SD)

3.5 Reliability and Validity of the Data

Before the commencement of data analysis, the reliability and validity tests were carried out

to establish that the instrument and its constructs had internal consistency and had actually

measured what they were designed to measure. For ascertaining the reliability, the research

employed the Cronbach’s Alpha Test of reliability. The reliability test is carried out to

determine the consistency of all the responses given by respondents to 14 items in the

questionnaire instrument used to get respondents perception on the impact of advertising on

consumer buying behavior.

32
3.6 Method of Data Analysis

Data was analyzed to establish the measures of central tendency that include the mean, mode,

and median highlighting the key findings. Inferential statistics (SPSS) was used to establish

the relationship between the variables of the study.

33
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 Preamble

This chapter presents the results from the data analyzed of questionnaires administered to

respondents. Section ‘A’ focus on the background information of the respondents while

section ‘B’ dealt with relevant questions on the research study. Out of 60 questionnaires

administered to the respondents, 50 were completed which is 83.33% were returned and 10

representing 16.67 were not returned.

Table 4.1.1

Questionnaire’s Response Rate

Table 4.1 Questionnaire Response Rate

Questionnaire Frequency Percentage

Returned 50 83.33%
Not Returned 10 16.67 %
Total 60 100%
Source: Researcher’s Field Survey, 2023

4.2 Data Presentation and Interpretation

Table 4.1: Gender of the Respondents

Frequency Percent
Male 29 58
Female 21 42

Total 50 100.00
Source: Author’s Field Survey, 2023

34
Table 4.1 shows that 58% of the respondents were male staffs representing 29 respondents
and 42% were female representing 21 respondents. This shows that there are more male than
female respondents.
Table 4.2: Age of the Respondents
Frequency Percent
20 - 30 15 30
31 - 40 20 40
41 - 50 10 20
51 and above 5 10
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.2 above shows that 30% of the respondents fell within the age of 20-30 years, while
40% fell between 31-40 years, 20% of ages of 41-50 years while 10% for the ages of 5 years
and above. This also shows that majority of the respondents are within the youthful
population considering that they are all students.
Table 4.3: Marital Status of the Respondents
Frequency Percent
Single 14 28
Married 36 72

Total 50 100
Source: Author’s Field Survey, 2023
Table 4.3 on marital status shows that married people have 72% of the respondents while
single has 28%. This reflects the situations of typical university students where vast majority
of them are married.
Table 4.4: Experience
Frequency Percent
Below 1 year 5 10
2-4 15 30
5-7 15 30
7 years & above 15 30
Total 50 100
Source: Author’s Field Survey, 2023

35
Table 4.4 above shows that 10% of the respondents fell below 1year of experience, while

30% fell between 2-4 years, 30% of ages of 5-7 years while 30% for the ages of 7years and

above. This also shows that majority of the respondents have been in the organization for

long period of time.

Table 4.5: Qualification of the Respondents

Frequency Percent
ND/NCE 2 4
BSc/HND 11 22
Masters 25 50
Professional 12 24
Total 50 100
Source: Author’s Field Survey, 2023

Table 4.5 above shows that 4% of the respondents fell within ND/NCE, while 22% fell

within B.Sc/HND, 50% fell within masters while 24% fell within professional. This also

shows that majority of the respondents are within the masters population considering that

they are all graduates.

4.3 Presentation and Interpretation of Respondent on Impact of Sourcing

Table 4.6: Means of Sourcing For Funds

Frequency Percent
Personal Savings 15 30
Loan from bank 20 40
Borrowing from club 15 30

Total 50 100
Source: Author’s Field Survey, 2023

Table 4.6 above revealed that majority with 40% agreed that loans from banks was

their major means of sourcing for funds, while 30% agreed that personal savings and

borrowing from clubs were their means of sourcing for funds.

36
Table 4.7: Form of business ownership
Frequency Percent
Partnership 13 26
Sole proprietorship 10 20
Limited Liability 7 14
Joint stock venture 20 40
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.7 above revealed that majority of the respondents with 26%% said partnership 20%
said sole proprietors, 14% are limited liability, while 40% are joint stock. This implies that
most of the businesses are partnership business owner.
Table 4.8: Reason for operating the business
Frequency Percent
Personal Interest 26 52
Family Heritage 2 4
Employment Probs 7 14
Professional Interest 15 30
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.8 above showed that majority of the respondents with 52% strongly agreed that
personal interest is the main reason for operating the business, family heritage had 4%
agreed, employment problem with 14% u and professional interest with 30%.
Table 4.9: Entrepreneurship development impact on the economy
Freq Percent
Strongly Agree 30 60
Agree 5 10
Undecided 0 0
Disagree 6 12
Strongly Disagree 9 18
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.9 above revealed that 60% of the respondents strongly agreed that Entrepreneurship
development has impact on the economy, 10% agreed, 0% undecided, 12% disagreed while
37
18% strongly disagree. This implies that Entrepreneurship development has impacts on the
economy
Table 4.10: Effect of Interest Rate on performance of SMEs
Freq Percent
Strongly Agree 31 62
Agree 11 22
Undecided 0 0
Disagree 4 8
Strongly Disagree 4 8
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.10 above revealed that majority of the respondents with 62% strongly agreed that
Interest Rate has effect on performance of SMEs, 22% agreed, 0% undecided, 8% disagree
while 8% strongly disagree to the statement. This implies that Interest Rate has effect on
performance of SMEs
Table 4.11: Does foreign product hinder the development of SMEs?
Frequency Percent
Strongly Agree 25 50
Agree 14 28
Undecided 0 0
Disagree 10 20
Strongly Disagree 1 2
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.11 above revealed that majority of the respondents with 50% strongly agreed that
foreign goods may hinder the growth of SMEs development, 28% strongly agreed, 0%
undecided, 20% disagree while 2% strongly disagreed. This implies that foreign product may
hinder the growth of SMEs development.

38
Table 4.12: Government policies improve SMEs development
Frequency Percent
Strongly Agree 29 58
Agree 11 22
Undecided 0 0
Disagree 6 12
Strongly Disagree 4 8
Total 50 100
Source: Author’s Field Survey, 2023
Table 4.12 above revealed that 58% of the respondents strongly agreed, 22% agreed 0% were
undecided, 12% disagree while 8% strongly disagreed that Government policies improve SMEs
development. This implies that Government policies improve SMEs development

4.4 Tests for Hypothesis

Hypothesis one
Ho1: There is no significant relationship between entrepreneurship and economic
development
There is significant relationship between entrepreneurship and economic development
Table 4.4.4.1: ANOVAb
Model Sum of Df Mean Square F Sig.
Squares
Regression 13.488 1 13.488 11.072 .001b
1 Residual 203.430 66 1.218
Total 216.918 67
a. Dependent Variable: development
b. Predictors: (Constant), entrepreneurship
Source: Author’s Fieldwork Computation, 2023
Also, the result of regression as contained in Table 4.4.4.2: Model Summary, shows that the
R Square gave a value of 6.2 per cent. This means that the model (which includes value
creation) explained about 6.2 per cent of the variance in perceived business growth. The
Durbin-Watson Statistic gives 1.442 coefficient which indicates that there is absence of serial
correlation in the error terms of the model as such ruling out problems associated with
spurious regressions
39
 4.4.4.2: Model Summaryb
Model R R Square Adjusted R Std. Error of Durbin-
Square the Estimate Watson
1 .249a .062 .057 1.104 1.442
a. Predictors: (Constant), entrepreneurship
b. Dependent Variable: development
Source: Author’s Fieldwork Computation, 2023
Specifically, the result of regression as contained in Table 4.4.4.3: Regression
Coefficients, tests the hypothesis of this study. From the output below, there was a positive
relationship between entrepreneurship and economic development such that a unit increase in
entrepreneurship scores caused about .413 unit increase in perceived business growth scores
which was statistically significant at 1 per cent with the aid of the p value (0.001). Based on
the result, the null hypothesis is rejected; thus, value creation has significant effect on
business growth.
Table 4.4.4.3: Regression Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) 2.510 .517 4.852 .000
1
entrepreneurship .413 .124 .249 3.328 .001
a. Dependent Variable: development
Source: Author’s Fieldwork Computation, 2023
Test of Hypothesis two
Ho2: There is no relationship between entrepreneurship development programme and small
scale industries
There is significant relationship between entrepreneurship development programme and
small scale industries.

40
 Table 4.4.5.1: ANOVAa
Model Sum of Df Mean Square F Sig.
Squares
Regression 15.058 1 15.058 21.999 .000b
1 Residual 114.311 66 .684
Total 129.369 67
a. Dependent Variable: small scale
b. Predictors: (Constant), entrepreneurship
Source: Author’s Fieldwork Computation, 2023
Also, the result of the regression as contained in Table 4.4.5.2: Model summary, shows that
the R Square gave a value of 11.6 percent. This means that the model (which includes value
creation) explained about 11.6 percent of the variance in perceived productivity.
Table 4.4.5.2: Model Summaryb
Model R R Square Adjusted R Std. Error of Durbin-
Square the Estimate Watson
1 .341a .116 .111 .827 1.969
a. Predictors: (Constant), small scale
b. Dependent Variable: productivity
Source: Author’s Fieldwork Computation, 2023
Specifically, the result of regression as contained in Table 4.4.5.3. From the output below,
there was a positive relationship between entrepreneurship and small scale such that a unit
increase entrepreneurship caused about .472 unit rise in small scale scores which was
statistically significant at 1 percent going by the p value (.001). Based on the result, the null
hypothesis is rejected, thus, there is significant effect between value creation and productivity
Table 4.4.5.3: Regression Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) 1.805 .441 4.096 .000
1
entrepreneurship .472 .101 .341 4.690 .000
a. Dependent Variable: small scale

41
Test of Hypothesis three
Ho3: There is no significant challenges affecting entrepreneurship profitability in Nigeria
Hi: There is significant challenge affecting entrepreneurship profitability in Nigeria

42
 Table 4.4.6.1: ANOVAa
Model Sum of Df Mean Square F Sig.
Squares
Regression 48.669 1 48.669 48.307 .000b
1 Residual 168.249 66 1.007
Total 216.918 67
a. Dependent Variable: profitability
b. Predictors: (Constant), challenges
Source: Author’s Fieldwork Computation, 2023
Also, the result of regression as contained in Table 4.4.6.2: Model Summary, shows that the
R Square gave a value of 22.4 per cent. This means that the model explained about 22.4 per
cent of the variance in perceived profitability. The Durbin-Watson Statistic gives 1.878
coefficient which indicates that there is absence of serial correlation in the error terms of the
model as such ruling out problems associated with spurious regressions
Table 4.4.6.2: Model Summaryb
Model R R Square Adjusted R Std. Error of Durbin-
Square the Estimate Watson
1 .474a .224 .220 1.004 1.878
a. Predictors: (Constant), challenges
b. Dependent Variable: profitability
Source: Author’s Fieldwork Computation, 2023
More importantly, the result of regression as contained in Table 4.4.6.2: From the
output below, there was a positive relationship between entrepreneurship and profitability
such that a unit increase in profitability scores caused about .581 unit increase in perceived
profitability scores which was statistically significant at 1 per cent with the aid of the p value
(0.000). Based on the result, the null hypothesis is rejected; thus, risk taking has significant
effect on profitability.

Table 4.4.6.3: Regression Coefficientsa

Model Unstandardized Standardized t Sig.
Coefficients Coefficients

43
 B Std. Error Beta
(Constant) 1.772 .359 4.940 .000
1
entrepreneurship .581 .084 .474 6.950 .000
a. Dependent Variable: profitability
Source: Author’s Fieldwork Computation, 2023

Specifically, the result of regression as contained in Table 4.4.6.3. From the output above,
there was a positive relationship between entrepreneurship and small scale such that a unit
increase entrepreneurship caused about .581 unit rise in small scale scores which was
statistically significant at 1 percent going by the p value (.001). Based on the result, the null
hypothesis is rejected, thus, there is significant effect between development and productivity.

44
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary of the Findings

This is concerned with the comprehensive summary of the finding, regarding the impact of
entrepreneurship development on Nigeria Economy from the research conducted the
following information were discovered.
The first hypothesis conducted reveals that small scale plays a vital role in the development
of Nigeria economy. There is need to encourage people to go into small scale business so that
their impact can be seriously felt on the economy of Nigeria.
On the other hand, the second hypothesis that there is relationship between entrepreneurship
and small scale development. Despite the fact that result obtained shows low relationship
between the variables, yet, tax and tariff rate can affect the operation of small scale business
either negative or positive in (low or high effect), government should also consider small
scale business in terms of levying tax. It is possible for small scale firms to function well if
the government can also give them the opportunity to faction well in the development of the
economy.
Thirdly, the hypothesis equally revealed the there is no challenges facing entrepreneurship
development in Nigeria. Though the result shows the there are various challenges faced by
small scale business, but only if government can help by minimizing this challenges in terms
of fiancé, resources and the like, small scale business will flourish and also help in the
development of the economy
Hence it will enhance the establishment operation and effective performance of small scale
business in the country. Most small scale business find it difficult to source the capital needed
for smooth running of their business from either financial institution or government
establishment programme due to their inability to provide the required collateral securities.
As earlier mentioned poor management and lack of delegation constitutes difficulty in
managing the small business effectively and efficiently in Nigeria. It was also discovered that
most of Nigeria entrepreneur are not taught modern management practices and this usually
result in weak foundation inaccurate data and poor financial analysis.
Moreover, most entrepreneurs do not operate good accounting systems which result in failure
of most of the business to succeed. A business must be able to relate the expenses to its
income properly.

45
Most small scale business owner in Nigeria are sole proprietors and they are the sole
dominator of their business. Though, there are certain other business organizations but data
gathered shows that they are not common compare to sole proprietorship kind of business.
Most small scale business were established for personal interest and employment purposes
while some entrepreneur confirmed that their primary aim is to be self employed and
controlling their own business rather than to be controlled. Some also confirmed that after
much struggling to get job and were not successful, decided to establish their own small scale
business. Small scale firm are mostly financed with personal saving which rate about 67.71%
of Nigerian entrepreneurs source of fund. Loan from banks were also recognized, but to some
extent these accuracy for about 26.04% of total sources of funds, despite the fact that banks
are not willing to give loan to small scale business, due to fear of risk and uncertainty.
Government contributes greatly in making small business a reality through the establishments
of some programme like National Economic Reconstructions Fund (NERFUND) National
Directorate of Employment (NDE), Industrial Development Coordinating Committee (IDCC)
etc.
Most entrepreneurs had benefited from these schemes. But to these, there may still be further
development of small scale enterprises in the future in Nigeria.
Moreover, Nigeria government embarked on activities that promote small scale business,
such as certain of special funds for financial business, provision of infrastructure and making
policies that favour small business from the analysis of data and interview conducted, it was
discovered that small scale business contributed immensely to the development of Nigeria
economy through employment, creation equitable distribution in income, industrial
diversification and development feeders of large scale industrial technological advancement
etc.

46
5.2 Conclusions

The hypothesis tested and reveals that small scale business plays and takes vital role

in the development of Nigeria economy second hypothesis reveals that there is low

correlation between entrepreneurship development and small scale industries in the on

Nigeria economy.

The role of entrepreneurship development on Nigeria economic development have

been known for long despite the neglect of these sector before. This study, which was carried

out in order to examine the role of entrepreneurship development on Nigeria economy

clearly shows that SMEs plays a significant role in the economy despite the problem that

sometimes affect their growth in the economy. The study therefore concludes that for

effective performance of the economy and reduction in the right rate of unemployment,

there’s need to ensure or encourage the growth of SMEs in the country.

47
5.3 Recommendations

Having considered the above findings in relation to the impact of entrepreneurships

development on Nigeria economy, the following recommendations are provided for

consideration since it has been concluded that government programmes are assisting in the

development of entrepreneurship, efforts should be made by the government to further ensure

that some additional resources are channeled annually through budgeting allocation via

federal ministry of labour and productivity to the sector.

Government should reduce tariff tax on raw material sourced locally or imported by

small scale firm and government should also increase interest rate for small scale business so

that it would enhance their establishment, operation and smooth running.

The financial institution and other government establishments for development of

small scale firm and such as Nigeria industrial development Bank (NIBB) Nigerian

Agricultural and co-operative Bank (NACB) and federal Mortgage Bank in Nigeria (FMBN)

should rationalized their functions in such a way that they can cater and provide adequate

financial support to entrepreneurs.

In additional, educational institution, financial institution and government should be

also be to identified, develop, trained so as to provide more credit facilities, infrastructure

facilities and managerial support services to small scale business, in order to enhance the

development of national economy. Furthermore, the entrepreneurship development

programme (EDP) should teamed-up with the government educational institution, and

financial institution for efficient planning of their enterprises.

Government and financial institution should assist small scale firms in providing for

medium and long term loan, which they can use to purchase the needed machineries, and

equipments. Entrepreneurs in the same view should use the loans granted them efficiently and

effectively and refund them at the appropriate time.

Bank official should be encourage and willing to base financing on potentials, rather

than collateral securities.

48
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 Appendix I
Department of Business Administration,
School of Management Studies
Heritage Polytechnic,
Eket,
Akwa Ibom State.

THE EFFECT OF ENTREPRENEURSHIP ON ECONOMIC GROWTH AND

DEVELOPMENT IN NIGERIA
(A CASE STUDY OF UNIFOAM NIGERIA LIMITED)
Dear sir/ Madam,
I am a student of the above institution, am conducting a research for fulfillment of Higher
National Diploma in Business Administration; I am currently conducting a study on: “The
Effect of Entrepreneurship on Economic Growth and Development in Nigeria (A case study
of Uniform Nigeria Limited, Ilorin Kwara State)”. The purpose of this questionnaire is to ask
for your views. Information to be obtained herein shall be used for academic purposes only. I
kindly request you to objectively respond to the questions to enable the researcher to obtain
as much relevant data as possible. The data will assist the researcher to fulfill the intended
objective.
I will appreciate your cordial cooperation.

Thanks for your kindness.

Yours faithfully,

Tokky Damilola Enitan

53
 Questionnaire
Instruction: kindly read the question below before putting letter in the appropriate boxes and
write in space provided
Section A
1. What is your status in the organization: Senior Staff: [ ], Junior Staff [ ]
2. Sex: Male [ ], Female[ ]
3. Age: 20 – 25[ ], 25 – 30 [ ] 30 – 35[ ], 35 – 40 [ ] 40 and above [ ]
4. How long have you been working with the organization?
Below 1 year[ ], 1 – 2 Year[ ],2 – 4 Year[ ],4 Year and Above[ ]
5. What is your education Background?
FSLC [ ], SSCE [ ], OND/NCE[ ], HND/BSC[ ]
SECTION B
6. How do your organization source for fund to finance the business?
Personal Saving ( ) Loan from Bank ( ) Borrowing From Club ( )
7. What type of business constitutes major form of business in Nigeria?
Sole proprietorship ( )Partnership ( ) Limited Liability ( ) Joint Stock Ventures ( )
8. Entrepreneurship development impact on the economy
Strongly Agree ( )Agree( )Undecided( ) Strongly Disagree ( )
9. Effect of Interest Rate on performance of SMEs
Strongly Agree ( )Agree( )Undecided( ) Strongly Disagree ( )
10. Table 4.11: Does foreign product hinder the development of SMEs?
Strongly Agree ( ) Agree( )Undecided( ) Strongly Disagree ( )
11. Do government decreases in interest rate have any effect on the performance of small
business?
Strongly Agree ( ) Agree ( ) Undecided ( ) Strongly Disagree ( )
11. Does Government inadequate protection from foreign goods hinders the development
of small scale enterprises in Nigeria?
Strongly Agree ( ) Agree( )Undecided( ) Strongly Disagree ( )
12. Does government policies improve the development of small scale enterprise?
Strongly Agree ( ) Agree ( )Undecided( ) Strongly Disagree ( )
13. Does present economy depression cause unemployment?
Strongly Agree ( ) Agree ( )Undecided( ) Strongly Disagree ( )

54