Analyses of Small and Medium Scale Enterprises as a tool for Economic Development in Enugu Metropolis: A study of eight SMEs in Enugu State of Nigeria

Abstract

This study seeks to analyse Small and Medium Scale Enterprises as a tool for Economic Development in Enugu State Metropolis in Nigeria. The objective of the study is to analyse SMEs’ contributions to economic development in the study area in respect of three economic development indicators, namely, employment creation, creation of wealth and enhanced standard of living. The sample population strength is 136 respondents drawn randomly from eight SMEs outfits using accidental sampling method. The data collection instrument used was structured questionnaire. The data analysis technique employed was frequency distribution tables and percentages. Chi-Square Statistic was used to test the hypotheses. The findings reveal that; SMEs has significant positive contributions in providing employment opportunities and thus reduce unemployment rate; increasing the standard of living of people (quality of life) and promoting creation of wealth. The study concludes that the three variables of interest were confirmed evidence of SMEs’ contributions in the study area. The study recommends that every effort should be made by government and private venture capitalists to ensure that: 1) SMEs have access to funds at a very low rate of interest to enable them function more efficiently and remain in business; 2) government should not only encourage regular training and retraining of SMEs operators but also subsidize the cost of such training to forestall the rate of mortality of these businesses caused by inadequate managerial capacity and poor quality services; 3) government should restrict or ban importation of foreign goods that have local equivalents to save the SMEs from undue and unnecessary competition.