Problems and Challenges of Small Scale Businesses as Tools for Economic Growth and Development in Nsukka Urban

Abstract

Worldwide small businesses are known to possess great potentials for boosting economic growth and development. They help medium scale enterprises as well as big industries in the production and supply chain. However, research has shown that over one-third of small businesses in Nigeria do not to see the third year after their establishment owing to different problems and challenges (Ademola, Olaleye, Olusuyi, & Edun, 2013). It is against this backdrop that this study investigates the problems and challenges of small businesses as tools of economic growth and development. Its focus was Nsukka urban, which is the second economic hub of Enugu State after the state capital, Enugu. There is no known empirical evidence on the challenges faced by small scale businesses in Nsukka urban, which is a town where over 95% of businesses are on the small scale level. The specific objectives of the study were to: (1) ascertain the problems and challenges facing small businesses in Nsukka Urban, and (2) ascertain the ways in which owners of small businesses confront the challenges facing them. Four hundred and five (405) respondents were selected from a population of 3,300 registered members of four business associations in Nsukka urban. The selection was done through a multi-stage sampling technique, after which the questionnaire was used to elicit data from the respondents. Findings indicated that business owners acknowledged the prevalence of stiff challenges (weighted mean = 3.30). Individual business owners (weighted mean = 3.13) feared for their businesses in terms of the imminence of collapsing. Forty-five percent (45.2%) of the businesses have not reached the five-year mark. With a weighted mean of 3.52 respondents accepted that money to expand their businesses was a problem, and there were no credit facilities through which to raise money (weighted mean = 3.31). Sourcing goods was also reported to be a problem (weighted mean =3.32). The study recommended, among others, that the various trade associations should institute regular seminars on investment, business assessment and fund drive. This is to build the capacity of small scale business owners who saw government as the panacea for business problems.

Keywords:  Small Scale Businesses, Economic Growth

DOI: 10.7176/EJBM/16-2-05

Publication date:March 31^st 2024