CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Small and Medium Enterprises (SMEs) play a pivotal role in the economic growth and development of emerging, developing and developed economies of the world. The development of the small and medium scale Enterprises sector is one approach that could help the government to attain the objective of promoting entrepreneurship as a vehicle for driving rapid industrialization, solving the problem of unemployment and overall economic growth. The contribution of the SMEs sector to the Nigerian economy shows that it is a strategic engine for economic growth and development. Small businesses play a key role in creating jobs, contributing to tax, export and import revenues, facilitating the distribution of goods, as well as contributing to human resource development. SMEs are the cradle of innovations (INNs) and entrepreneurship (Agyapong, 2010; Schlögl, 2009). In addition, SMEs are very important in the fight against poverty. They also employ poor and low income workers and are sometimes the only source of employment in the rural area; their contribution cannot be overlooked (Ackah, 2011). The major obstacles threatening the performance of small and medium scale Enterprises in Nigeria are obsolete technology, multiple taxations, access to the market, poor support (business development services), and inconsistency in government policies, poor infrastructure and access to finance [SMEDAN, 2013]. African Development Bank Group (2013) opined that the business environment in Nigeria is bedeviled by market failures and this has led to the underprovision of financing for the small and medium scale Enterprises sector which is crucial to employment and economic diversification and this underlines the necessity for provision of financial assistance to SMEs through reputable local banks. An Entrepreneurial oriented (EO) firm for the purpose of this study is defined as a firm that involves in technological innovation (innovativeness), undertakes risky ventures (risk taking), and pursue opportunities proactively (pro-activeness). On the other hand Entrepreneurial management (EM) assumes that entrepreneurial firms are driven and motivated by the opportunity, seize it regardless of the resources they have and if necessary, prefer to rent these resources (Guulruh and Sinem, 2009). The birth, growth, and sustainability of small and medium scale Enterprises are critical to the attainment of economic growth and development of countries. Despite this, the truth is that the activities of SMEs are bedeviled by problems such as access to finance, poor infrastructure, inconsistency in government policies, poor support (business development services), and access to the market, multiple taxation and obsolete technology, leading to high failure rate.
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