CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF STUDY
The development of any country on how far its income generating sectors can increase its capacity and its contributions to the generate output can only be answered through the industrial sector which seems to be the most dynamic sector from the economist point of view because of its ability to increase capacity almost to an infinite position and also because of its outputs usually a total creation of value. Therefore most countries focus on the growth and development of their industries to enhance fast economic development (Udeh, 2004). Although, development of large scale industries, large manufacturing outfits and big conglomerates may be contributing immensely to the industrialization and growth of the economy, small and medium scale enterprises play he most paramount role in essence, the national development is a function of small scale industries performance. in the past few decades, small and medium scale enterprises (SMES) have played important roles in the development economics and proved to be one of the most visible sectors with economic growth potential (Shenton, 2001) The successes recorded by these countries were because of serious consideration of the future rewards from sustained investment in this sectors. Due to their sizes and scope of operations these enterprises requires relatively small capital investment to start, there by oering a relatively high labour to capital ration. They also demand low technology and management skill, which are readily available within the society. The extent to which the opportunities oered by SMEs are exploited and their contribution maximized enabling environment created through the provisions of pre-requist infrastructural facilities. These include good road networks, telecommunication, adequate and eicient power supply ports etc. and the introduction and pursuit of policies such as concessionary financing that encourage and strengthen the growth of SMEs. Small scale industries have such a crucial role to play in the development of an economy that they cannot be ignore
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