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.
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