Problems are the constraints that hinder the rapid
growth and development of small-scale enterprises sub-sector. They range from
financial problem, management problem to marketing problem. However option
differs as to the level of intensity of each one, these factors constitute a
blockage in the need foe small-scale growth, opinion regarding to cause and
solution to these problems also differ.
In Nigeria, as in most countries of the
world both developed and under developed, small-scale business are faced with
number of problems which despite so much efforts to assist the sector have seem
abortive, often the motion has been that only problem which small-scale
business faced is that of inadequate finance and other problems are sub-summed
under it.
In as much as it is acknowledge that
the problem of inadequate finance is a major impediment to the development of
small-scale enterprises most especially in the developing countries, other
problems such as poor transportation and infrastructural development,
restricted market of the products and services of public sector official,
non-enforcement of official guidelines, poor preparation of project proposal by
small-scale entrepreneurs, should be recognized as in habiting the development
of the sub-sector.
The problem of inadequate
infrastructural facilities has a major handicap to the meaningful development
of small-scale business Nigeria. These problems which include lack of adequate
power supply and housing facilities, inefficient production of goods and
services. In particular, apart from state capitals and perhaps other major
cities, most towns and villages in Nigeria do not have access to electricity
supply, and even when electricity supply available, it is far from being
constant and these have made the products to be costly because another means of
energy will be employed to produce such products.
The in numerable problems and
drawbacks rising from the storage of infrastructural facilities cannot be over
emphasized particularly in the rural areas. In deed this has frustrated the
promotion small-scale enterprises as it is in Afikpo North Local Government
Area.
In
such manner as to provide a lasting solution to the current problem of
imbalance in the distribution of industries between the rural and urban areas,
and thus check the perennial rural urban drift which has heightened social tension
in Nigeria. The fact remains that there have been a glaring lack of co-ordinate
policy at both the national and state level relating to financing technical and
managerial assistance to small-scale business. It is yet be seen that this
sub-sector has received full and appropriate attention required for its
fundamental growth from the federal and state government despite the often
rhetorical expositions, as has been rightly noted, there is no central focus to
co-ordinate the few institutions that exists.
Additionally, there is intractable
problem of restricted market for their products or services they render often,
they are faced with undue competition from the already well established firms
in the enterprises where they belong or choose to operate. The Nigeria
experience in particular is pathetic (sad or pity). Instead of government
organizations and individuals to give this sector the necessary encouragement
and patronage, they give it to big firms and organizations, they tend to forget
that “Rome was not built in a day” for instance, the federal government and
corporate institutions always prefer the services of big foreign architectural
firms to that of an indigenous small young Nigerian firms.
The problem associated with
small-scale entrepreneurs themselves must be mentioned often; these
entrepreneurs lack the necessary technical and management know-how to operate
effectively and are very recalcitrant to taking full advantage of outside
assistance programme. Moreover, there is also the problem of improper
accounting and poor record keeping and other deficiencies of small-scale
entrepreneurs. Having enumerated the above factors as impeding the growth of
small-scale business, one should not be carried away by the euphoria of the
whole facts. In other words, we are aware of the fact inadequate finance
remains the most fundamental issue in any discussion on problems militating
against sub-sectors. Adequate finance is required both far the initial take-off
as well as the expansion of the business. But more often than not, these
enterprises lack knowledge of appropriate sources of finance and also ignorant
of the advantage inherent in adopting different methods of financing. Moreover,
these entrepreneurs lack the skill to presents their financial cases to potential
investors and lenders.
It has been rightly observed that
the financial problem stems from the fact that the bulk of funds available to
small-scale business originated from the owner of the business, the inability
to borrow funds from the organized Capital Market. In addition, institutions
are often unwilling to provide financial facilities for this enterprise mainly
because of their high rate of failures, loan defaults, poor accounting and
poor-record keeping. Hence, most of them are faced with recurring problem of
inadequate finance.
The finance discussed above are far
reaching implication of this small-scale establishment. Apart from the fact
that financial constrains limit the ability of small-scale enterprises from
engaging in efficient production, it also hinders their ability to engage may
not find it easy to offer competitive credit terms usually given to large
firms. Also partly; due to financial problems, a small-scale business cannot
afford to contract highly qualified workers as it exist in large corporations.
This has been held to be partly responsible for the bad accounting practices
and inefficient operations witnessed in many small firms such as in Afikpo
North Local Government Area.