SMALL SCALE BUSINESS AND THE ECONOMIC DEVELOPMENT OF NIGERIA

SMALL SCALE BUSINESS AND THE ECONOMIC DEVELOPMENT OF NIGERIA

​​​​​​​Background of the study

The majority of the most successful businesses and organizations in the world had their start as modest enterprises. Through the application of their talents and hard work, these businesses eventually expanded into conglomerates and global corporations.

Any economy, regardless of its type, contains a subset of businesses known as small scale businesses, which hold a special place in the economy and are essential to its growth (Bacdon, 2021). They are by far more numerous than large-scale businesses and are an essential component of any economy that is designed to be competitive. In addition to this, they provide large-scale commercial opportunities, which foster more innovation and entrepreneurial spirit (Basil, 2022). In this way, as a consequence of easy entry into the market, small scale businesses spring up all the time keeping the competition environment lively. This is a phenomenon that leads to productivity gains and real economic growth, in addition to the fact that they generate employment opportunities, they are closer to the grass roots, and so on, ginger rural development. They demand minimal investment of resources and do not call for the creation of a massive supporting infrastructure in order to function (Ekezie, 2020).

As a natural component of the economic system, small business enterprises are subject to a variety of challenges, the most significant of which is access to capital; but, in many respects, these challenges are very unlike to those encountered by major concerns. However, the concepts that underpin financial decisions remain the same regardless of the size of the firm. As a result, the fundamental purpose of financial management is to acquire, anticipate, and allocate cash equally to both large and small sized businesses (Gladwin, 2021). It is common knowledge in the world of business that small-scale companies have a difficult time obtaining funds from financial institutions. This is largely attributable to the fact that these companies struggle to meet the collateral requirement that is necessary to become eligible for financial assistance from the back. Despite this, money is a need for any type of business, no matter how big or how little. The availability of funds is essential to the operation of any firm, while everything else comes after (Bacdon, 2021).

The government acknowledges the fact that small company is the second largest employer of labor, after only the government itself, and that small business acts as an engine room for the economic growth of the country. In addition to this, the government is doing its part to foster the development of small businesses by establishing organizations such as Small and Medium Enterprises (SME) (Basil, 2022). The government has also offered financial incentives for companies operating on a smaller scale. As was said previously, the growth of even very modest businesses may have a significant impact on the overall economic landscape of a nation, a state, or even a municipality (Ekezie, 2020). For example, when there is an increase in unemployment, when available resources are underutilized, and when the raw-material supply to our large industries is inadequate, the establishment of small scale businesses is considered as an alternative means of earning a living and providing raw-materials to our large industries. This is because small scale businesses require less capital investment than large-scale businesses.

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