AN EVALUATION OF STRATEGIES OF DEVELOPING SMEs IN NIGERIA(A CASE STUDY OF BANK OF INDUSTRY)

CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

The critical importance of small and medium scale businesses in both developed and developing Nations has led and would continue to lead to a reconsideration of the role of Small and Medium Scale Enterprises in the economy of nations. The development of many countries is often measured by such indices as the level of industrialization, modernization, urbanization, gainful and meaningful employment for all those who are able and willing to work, income per capital, equitable distribution of income, and the welfare and quality of life enjoyed by the citizenry. There is no doubt that small businesses exist in most economic environment in the world today. The historical background of small and medium scale businesses in Nigeria can be traced back to 1946 when the essential paper No. 24 of 1945 on “A Ten year plan of development and welfare of Nigeria 1946 was presented. Small and Medium Scale Enterprise is an all time necessity. It was there at the beginning; it was gained prominence today and will increase its importance tomorrow. This is simply dictated by the developmental needs of the Nigeria society. In recognition of the depth and breadth of the consequences of small-scale enterprises in alleviating poverty and national development, there has been a deep-self interest in recent years for development of Nigerians small-scale enterprises particularly since the adoption of the economic reform in 1986. The small and medium scale business sector is seen as a key to Nigeria’s growth and alleviation of poverty and unemployment in the country. Therefore, the development of these small and medium businesses in developing economies like Nigeria is of critical importance since it brings about a great distribution of income and wealth, economic self-dependence, entrepreneurial development employment and a host of other positive, economic uplifting factors (Aremu 2004). Moreover, in a country like Nigeria with an adverse Balance of Payment situation, the growing contribution of the Small Scale Industries sector in Nigeria’s export portfolio goes a long way in generating foreign exchange and smoothening out the adverse Balance of payment situation. Aremu (2004) posited that Small Scale enterprises play an important role in the economics of any country in accordance with their relative levels of development. He further emphasized that Poverty is a worldwide phenomenon and its incidence in Nigeria had been high and on the increase since 1980. This position is in line with (Adeyemi and Badmus 2001 and Schmitz 1982), they