Researching into the effective management of the problems and opportunities of SMEs in a developing economy: The case of Nigeria

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Research

The effective management of the problems and opportunities of small and medium sized enterprises (SMEs ) in a developing economy : The case of Nigeria

Statement of aims and Objectives

This study will be undertaken to find out if the SME sub sector in Nigeria has performed its critical role of driving the country 's industrial transformation and development as it has done in other developed countries . It will seek to identify why and if this is not the case . It will

seek to find out the problems of management in SMEs and propose solutions for them

Statement of research problem

SME have played and continues to play significant roles in growth development and industrialization of many economies world over . In the case of Nigeria , SMEs have performed below expectations due to a combination of problems which range from attitude and habits of SMEs themselves through environmental related factors , instability of government and frequent government policy changes and somersaults (Nnanna , G 2005

Top ten problem areas of SMEs in Nigeria in decreasing of intensity include : management , access to finance , infrastructure government policy inconsistencies and bureaucracy , environmental factors , multiple taxes and levies , access to modern technology , unfair competition , marketing problems and non availability of raw materials locally . Thus managerial problems present the greatest problem facing SME 's in Nigeria while non availability of raw materials locally is the least problem (Shelly , S 2004

Overview of relevant literature

The opportunities and potentials and opportunities for SMEs in Nigeria are essential to economic growth , industrialisation and development poverty reduction , wealth and employment creation . are enormous . The federal , local and state governments need to change their habits and attitudes towards development as much as the SMEs themselves need to change their habits and attitudes towards entrepreneurship development For execution of maximum effects , there is need to involve the SMEs in policy formulation (Humphrey , J 2001

Lots of literature exists on small and medium enterprises SMEs written by various authors and in different languages and for various purposes This fact underscores the essence , importance and relevant of this sub-sector in the development of any given economy

Finance has been identified in many business surveys as one of the most important factors determining the survival and growth of small and medium enterprises (SMEs ) in both developed and developing countries Access to finance allows SMEs to undertake productive investments to expand their businesses and to acquire the latest technologies , thus ensuring their competitiveness and that of the nation as a whole (Blum L 1995

Poorly functioning financial systems can seriously undermine the microeconomic fundamentals of a country , resulting in lower growth in income and employment . Despite their dominant numbers and importance in job creation , SMEs traditionally have faced difficulty in obtaining formal credit or equity . This is because the maturities of commercial bank loans extended to SMEs are often limited to a period far too short to pay off any sizeable investment (Akwaja , C 2004

Moreover , governments in many developing countries...