STRATEGIES FOR PROMOTING ENTREPRENEURSHIP DEVELOPMENT IN

NIGERIA

(A STUDY OF ENUGU NORTH)

ABSTRACT

The aim of this study is to examine the strategies for promoting entrepreneurship

in Nigeria. Data were collected from both primary and secondary sources. The

main instrument used is the questionnaire.

The data are presented in table as frequency distribution and in the analysis,

the technique of percentage and frequency are used. The major findings are:

1. Entrepreneurship promotion in Nigeria is done through financial non-

financial and fiscal supports.

2. The government, C.B.N banks and international institutions and

agencies promote entrepreneurship in Nigeria.

The conclusion drawn is that in spite of the laudable efforts of these is still needed

the main recommendation by all the parties involved in entrepreneurship

promotion in Nigeria.

TABLE OF CONTENTS

Title page

Approval page

Dedication

1
Acknowledgement

Abstract

Table of contents

CHAPTER ONE

Introduction

1.1 Background of the study

1.2 Statement of the problem

1.3 Purpose of the study

1.4 Significance of the study

1.5 Research questions

1.6 Scope and limitations of the study

1.7 Definition of terms, and acronyms

Reference

CHAPTER TWO

Literature Review

Definition and concept of the entrepreneurship

Nature and dimensions of entrepreneurship development in Nigeria

Strategies for promoting entrepreneurship development

Institutional financing arrangements for promoting entrepreneurship

development in Nigeria

International financial assistance

Challenges to entrepreneurship development in Nigeria

Reference

2
CHAPTER THREE

Research Methodology

3.1 Method of sources of data

3.1.1 Primary sources

3.1.2 Secondary sources

3.2 Research population

3.3 Sampling method used

3.4 Questionnaire design

3.5 Description of respondents

3.6 Method of data analysis

CHAPTER FOUR

Data presentation and analysis

4.1 (Analysis of data from CBN staff)

Table 4.8: Strategies used by CBN in promoting entrepreneurship

4.9 CBN’s entrepreneurship promotion financial strategies

4.10 Responses to CBN supporting other banks for entrepreneurship

promotion

4.2 (Analysis of data from NDE officials)

Table 4.14 NDE’S strategies for entrepreneurship promotion

4.15 NDE’s financial support schemes

4.16 NDE’s Non-financial schemes for entrepreneurship promotion

4.17 Responses to existent of government support

4.18 Problems of the NDE in promoting SME’s

3
4.3 (Analysis of data from NAMSME’S staff)

Table 4.19 Responses to the association encouraging entrepreneurship

development

4.20 Strategies adopted by NAMSME in entrepreneurship promotion

4.21 Responses to government giving fiscal incentives

4.22 Fiscal incentives given by government

4.23 Supporting institutions

(FOR CBN STAFF)

FOR NDE STAFF)

FOR NAMSME STAFF)

CHAPTER FIVE

Summary, Conclusion and Recommendations

5.2 Conclusion

5.3 Recommendation

5.4 Limitations of the study

5.5 Suggestions for further studies

References / Bibliography

Appendix

Questionnaire

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

In many African countries government has played a significant role in determining

the course of national development since 1960 the Nigerian National Development

4
plans have laid great emphasis on public sector control of the economy Ezeife,

(1998:26) This trend has generally, distinguished the government as a major

investor in business which other wise should have been left to private investors.

The general was that the fastest route to development is government playing a

leadership role in entrepreneurship development.

In Nigeria, until recently government has participated extensively in

business activities making every one look unto it as the provider of employment

and welfare Ujam, (2001:19) Many Nigerians did not think of self – determination

as an alternative to government employment. However, the economic downturn of

the economy changed. This situation as unemployment heightened in the mid-

1980’s graduates and school leaves have now realized that the government is no

longer ready to offer them employment hence the current guest for

entrepreneurship development Ugbaja (2003:12) short of themselves into various

entrepreneurial ventures.

The government has shown much concern about the unemployment

situation and has set up many institutions to assist in creating favourable climate

for entrepreneurship development in the country Aluko (2002:32) the Nation is

now on the right part to entrepreneurship development in the 21 st Century with

the ongoing privatization programme. The new emphasis on self-determination is

in the line with current policy of promoting private sector dominance Nwatu

(2003:18) to this and the government, International agencies and even non-

government organizations and the world bank are now showing concern for and

commitment to entrepreneurship development in Nigeria.

5
 It is against this background that this study is set to examine the strategies

for promoting entrepreneurship development in Nigeria with a particular emphasis

of Enugu North.

1.2 STATEMENT OF THE PROBLEM

The current emphasis on entrepreneurship development in Nigeria is facing some

constraints these include:

1. In adequate institutional support for rapid promotion of

entrepreneurship development.

2. Lack of capital and credit for entrepreneurial activities.

3. Lack of market incentive for entrepreneurs

4. Inadequate entrepreneurship encouragement programmes.

5. Lack of entrepreneurship education programmes

6. In adequate entrepreneurial opportunities for women and young

persons.

7. Lack of willingness (to take risk) entrepreneurial and managerial

acumen among Nigerians.

These factors constrain rapid entrepreneurship development in Enugu North.

1.3 PURPOSE OF THE STUDY

The main purpose of this study is to examine the strategies adopted for

entrepreneurship development in Enugu Norththus, the specific objectives of the

study are:

1. To examine the entrepreneurship promotion measures introduced by

the government

6
 2. To examine the efforts of Nigerians to become self employed.

3. To examine what role international financial institutions and

organizations play in promoting entrepreneurship development

4. To determines if these are entrepreneurship encouragement

programme opportunities and incentives.

5. To determine if a favourable and stable business climate has been

created for entrepreneurship development.

1.4 SIGNIFICANCE OF THE STUDY

This study is significant in many respects. Firstly it will be useful to the

government. This is because its findings will help the government to determine

whether it has adopted the right strategies or done enough to promote

entrepreneurship in Nigeria. The recommendations will be very useful for

entrepreneurship promotion policy formulation.

Secondly, the study will show what assistance the international organization

include the world bank and its affiliates have been giving to Nigeria for

entrepreneurship development. This study will therefore provide Nigerians

information on how to avail themselves the opportunities created by these

assistance.

Finally, the study will be useful for academic purpose. It will provide useful

information for those who will carryout related studies in the future. Furthermore

the research findings can provide the basic for further studies.

1.5 RESEARCH QUESTIONS

The following questions are formulated for this study:

7
 1. What are the strategies adopted by the government in promoting

entrepreneurship development in Enugu North?

2. What efforts are Nigerians making to become self-determining?

3. What role do international financial institutions and other organizations

play in promoting entrepreneurship development in Enugu North?

4. Are there entrepreneurship encouragement programmes opportunities

and incentives for young entrepreneurship?

5. Has a favourable and stable business climate been created?

1.6 SCOPE AND LIMITATIONS OF THE STUDY

The study focuses on the strategies adopted in promoting entrepreneurship

development in Nigeria with particular reference to Enugu North. It therefore

covers government’s individuals’ and international organization’s efforts to

promote entrepreneurship development in Nigeria.

The researcher encountered some limitations however, in carrying out the

study. Firstly, collecting data for the study is not easy given the nature of the

study. Many individuals approached for information could not cooperate. Secondly,

the researcher could have traveled outside the state in search of information and

data. But she could not do so for lack of finance.

Finally, the study could not be completed a record time because of the

pressure of other academic work on the researcher.

1.6 DEFINITION OF TERMS AND ACRONYMS ENTREPRENEUR

This refers to an individual who creates a new business and continues managing

it until it succeeds.

8
Entrepreneurship:

This is the phenomenon of creating a new business fermenting and managing it,

taking risk and making losses or profits.

Business Environment / climate:

This refers to all the physical facilities environmental factors, regulations

opportunities and risk associated with the business.

Institutional arrangement / support:

This refers to institutions and their supports for entrepreneurship development.

Venture capital:

This refers to loans for business

Starting capital:

This refers to fund required to set up a business.

Business Opportunity:

This refers to a profitable business activity that can be undertaken

Innovation:

This means introducing a new business or product

CHAPTER TWO

2.0 LITERATURE REVIEW

In this chapter the researcher reviews some relevant literature on the subject

matter

2.1 DEFINITION AND CONCEPTOF ENTREPRENEURSHIP

9
Although there is no generally accepted definition of entrepreneurship, various

authors have given various definitions Ugbaja (2003:4) defines entrepreneurship

as process of setting up, financing and managing a business outfit by, an

individual whose objective is to make profit by exploiting business opportunities

and taking risks.

In this own definition, Nwatus (2003:7) sees entrepreneurship as the

economic process of creating incremental wealth. The wealth is created by

individuals who take risks by committing money to ventures whose success is

uncertain Ujam (2001: 1) defines, it as the process of creating something different

with value by giving the necessary time and effort and assuming the financial,

psychic and social risk and reviewing the resulting reward or loss.

Entrepreneurship is creating and building something of value from practically

nothing. It is the process of creating or seizing an opportunity and pursuing it

regardless of the resources currently committed. According to Ujam (2001:3) it

involves the creation and distribution of value and benefits to individuals, groups

or organizations and society. It is rarely a get-rich-quick activity but one of

building long-tem value and durable cash-flow streams.

Ugbaja (2003:7) expresses that entrepreneurship which involves personal

energy by initiating and building an enterprise. It requires a vision and passion

commitment and motivation to transmit this vision to other stakeholders such as

partners, customers, suppers employees and financers. It requires a willingness to

take risk and doing everything possible to influence the odd.

The quest for rapid entrepreneurship development in Nigeria increased

among young graduates and school leavers who could not find employment in the

public sector, or even in the organized private sector. Short of alternative and with

10
the zeal to be self-determining most Nigerians are non launching themselves into

various micro, small and medium-scale enterprises. According to Ogudu

(2002:17) entrepreneurship development has assumed a great dimension in

Nigeria since the 1990’s.

2.2 NATURE AND DIMENSIONS OF ENTREPRENEURSHIP DEVELOPMENT

IN NIGERIA

Entrepreneurial activities includes production (primary and secondary) and

provision of services; according to Ike (2003:12) such activities are of micro small

and medium scale and are essentially established by individuals who are

determined to be independent or less independent on the government for their

living.

In primary production, it includes pulling farming and animal husbandry,

farming and quarrying – in the secondary production (manufactures) it includes

cottage soap and cosmetic production, block making, food processing and other

activities that transform intermediate products into finished products. In the

tertiary production it includes publishing restaurant and fast food operations,

commercial transportation, laundry, and dry-cleaning, trading advertising public

relations consultancy among others.

According to Ogbodo (2003:46) entrepreneurship development concentrates on

small-scale manufacturing and services. These include cabinet and furniture

making upholstery, tailoring textile production of soaps, detergents, anticipates,

deodorants, perfumes pomades and chemical proanlts; others include such

services as hotels, bar and restaurant services barbing and hair- dressing,

11
technical and mechanical services, installations distribution tailoring among

others.

Entrepreneurial partnership includes education, medicine, pharmacy,

research law, architecture engineering, social work and consultancy services,

trend has been establishment of sole proprietorship or partnership in ownership of

nursery and private schools, health clinics and maternity homes, patent medicine

stores and production of drugs, research centres law officers, architectural,

engineering, advertising and management consultancy services.

For the less educated Nigerians all about entrepreneurship development in

engaging in petty trading in various commodities and setting up small-scale

enterprise. At least, the fast growing sub-sector is the communication where a

substantial number of young men and women are establishing G.S.M call enters

Oduma (2004) this is because of the relative cheapness of establishing and

operating such business. Other area is the fast food where many young female

school-leavers and graduates and making themselves self-employed.

2.3 STRATEGIES FOR PROMOTING ENTREPRENEURSHI DEVELOPMENT

Many authors have examined the problems of rapid development in

entrepreneurship and have suggested strategies for its promotion. In his work

Schumpeter (2000:52) states that a important way to promote entrepreneurship

development in developing countries is to increase the market incentives for

entrepreneurs according to Schumpeter (2000:52) one of the primary

determinants of the supply of entrepreneurs is the willingness of an individual to

be com an entrepreneur.

12
 Willingness is largely determined by the anticipated economic benefits that

will accrue to an entrepreneur if his enterprise is profitable. Market regulations

limit the incentives that could encourage potential entrepreneurs to start their own

enterprises. For example price ceilings that are set below market equilibrium lower

the amount of revenue that an entrepreneur could earn in a certain industry. If

the anticipated economic benefits are lower than the opportunity cost, then the

potential entrepreneur will not start his own business. Thus, Schumpeter

(2000:53) submits that policies should be implemented to increase and improve

the incentives for entrepreneurs. A good policy measure is tax incentive.

In a related development Hannis (2001:59) states that improving the

availability of credit and capital is a good strategy for promoting entrepreneurship

development. According to Hannis (220:59) in order for an individual to start his

own business, it is necessary for him to, have the credit or capital to finance the

start-up costs- one of the primary problems facing would be entrepreneurs in

developing counties is a lack of such capital without initial capital, many

entrepreneurs would not have the funds to start enterprises of their own.

According to him, government can provide the solution by encouraging the

development of venture capital companies and implementing micro-credit

programs supporting this view Ugbaja (2003:10) notes that the federal

government of Nigeria has over the years putting place institutional arrangement

for the provision of micro credit to potential entrepreneurs in Nigeria.

Developing entrepreneurship encouragement programme is another strategy

for promoting entrepreneurship development. This is the view of Carpenter

(2002 :12) who states that by enacting legislations that is entrepreneurship-

friendly government can make it more culturally acceptable and less risky to be an

13
entrepreneur. Additionally, entrepreneurship encouragement programmes like the

NDE’s skills acquisition programme, family Economy Advancement Programmes

and family support programme can assist potential entrepreneurs in finding

capital, setting up a business plan and complying with the various business and

tax regulations.

Similarly, initiating entrepreneurship educational programmes is another

good strategy for promoting entrepreneurship development. According to

Carpenter (220:12) new education initiations to teach entrepreneurship skills have

proved effective in many countries. By inculcating more people with the skills to

be come entrepreneurs, a country can effectively increase its supply of competent

entrepreneurs for example the skill acquisition. Programmes centers in Nigeria

established under the family support programme were successful in this regard.

These centers teach the indigenous people entrepreneurial skills and assist

aspiring entrepreneurs with the development of their business plan.

Another strategy is to reform market regulations to facilitate entry into the market

according to Schumpeter (2000:28) entrepreneurship can be promoted in

developing countries by improving the ease of entry into the formal sector.

Developing countries are Licensed and permits who can participate in the formal

sector. Although these policies may earn government revenue or protect state-

owned enterprises, they make the markets inefficient (by limiting competition)

and prevent potential entrepreneurs from starting their enterprises by reforming

market-entry laws, entrepreneurship development will be encouraged in Nigeria,

As an example, Nigeria’s abolition of its marketing Boards provided new openings

for a large number of small entrepreneurs to enter the market with creative

minds.

14
 Yet another effective strategy is increasing entrepreneurial opportunities

available to women and youths or young persons. Saaed (1998:12) states that

women and youths lack economic empowerment in developing countries such as

Nigeria and Ghana, besides cultural values or legal restrictions prevent these

groups from participating in the formal section thus, uninviting the size of their

pool of potential entrepreneurs. Accordingly, by eliminating discriminatory

employment and licensing policies, Nigeria could create an influx of possible

entrepreneurs.

All these strategies are general policy suggestions that governments can

purse. The specific policies that a country implements, however, must be made

appropriate for the specific circumstances that the country faces Agwu, (2002).

For example, in a country where the dominant enterprises, there is initially little

need for venture capitalists. Instead it would be more appropriate for this country

to implement micro-credits programme to assist potential entrepreneurs, thus the

policies that a developing country implements to promote entrepreneurship

development must be designed individually for the country is specific case and

stage of development.

2.4 INSTITUTIONAL FINANCING ARRANGEMENTS FOR PROMOTING

ENTREPRENEURSHIP DEVELOPMENT IN NIGERIA

The Nigeria government has in last one half decades, established some institutions

and taken some measures to promote entrepreneurship development in Nigeria.

According to Adebusuyi (2003:17) these include

Establishment of development institutions include the Nigerian industrial

development bank (NIDB) and the Nigerian bank for commerce and industry

15
(NBC) both of which provided small credits to small-scale industrialists etc. the

CBN uses the credit guideline to stipulate the minimum credit these institutions

should made available to small borrowers.

Others include the National Directorate of employment (NDE) established in

1986 to promote and support self-employment the programme operates two

credit guarantee scheme which produce assistance to operators of small and

medium enterprises and it is complemented by an entrepreneurship development

programme. According to Adebusuyi (2003:18) the two credit schemes are the

graduate job creation loan scheme and the nature people’s scheme.

The National Economic Reconstruction Fund (NCRFUND) was established in

1989 as a funding mechanism to facilitate the provision of loans at lower interest

charges for small scale enterprise proprietors. According to Adebusuyi (2003:19)

the SME I and SME II loan schemes were administered by the NBCC. The US$ 142

in word Bank Loan package for entrepreneurship development in Nigeria were

disbursed through these schemes.

The fund for small-scale industries (FUSSI) are both Federal and State

government support programmes for entrepreneurship by the ministry of industry

and for channeling government assistance to small enterprise proprietors Ugbaja

(2003).

2.5 INTERNATIONAL FNANCIAL ASSISTANCE

In addition to assessing credit facilities from the word Bank and its affiliates such

as the IFC, the government has continued to approach other international

organization for the predication of needed foreign capital for entrepreneurship

development in Nigeria. Invariably, the Federal Government guarantees and

16
sometimes agrees to monitor or co-finance small entrepreneurs receiving such

external financial support. According to Ugbaja (2003:69) an example was the

US$ 252 in export stimulation loan granted by the African Development Bank in

1999 to finance SME in Nigeria.

2.5 CHALLENGES TO ENTREPRENEURSHIP DEVELOPMENT IN NIGEIRA

In what follows, Oduma (2004:7) summarizes the challenges to entrepreneurship

development in Nigeria:

1. Lack of knowledge of what business to set up and how to run such a

business.

2. Fear of taking risk and failure in the face of stiff competition

3. Constrained access to credit resulting in lack of start up capital and

inadequate financing.

4. Lack of infrastructural facilities such as electricity, water,

communication facilities access roads etc.

5. Inadequate procurement of raw materials and machinery and

equipment.

6. Poor educational background leading to lack of managerial skill

7. Non- conduceive regulatory and operational environment

8. Frustration and anxiety resulting from high rate of business failure

According to Oduma (2004:9) these factors among other impose constraints or

limitation on rapid entrepreneurship development not only in Enugu Northor

Nigeria but also in all developing countries.

17
 REFERENCE

Adebusuyi, B (2003:17) Small business promotion and management Lagos: intee

publishers Ltd

Agwu. K (2002:59) Small business management Owerri concord press

Carpenter, D (2002:121) The modern entrepreneur London: (Assed Ltd

Hannis, O (2001:59) Small business Development New York: Mc G raw-Hill book

Inc

Ike, I (2003:12) Entrepreneurship Development in Nigeria Enugu: Jamoe

Printers

Nwatu, R (2003:7) Entrepreneurship Awka; Africana publishers Ltd

Oduma,P (2004:5) The Hard Road to small business success Onitsha: Tabansi

publishing Co.

Ogbodo C (2003:46) Issue in small business management (ed) Enugu Oguagha

printing press

Ogudu, F (2002:17) Promoting entrepreneurship in Nigeria the role of the

government A policy paper presented by Federal Ministry of

Industry to National Planning Commission.

Schumpeter, P (2000:52) Entrepreneurship and Economic Development London:

Pitman

Saaed, V (1998:12) Entrepreneurshp Development California: South-East

publishing Co.

Ugbaja, C.O (2003:4) Issue in Entrepreneurship Development (ed) Lagos:

Dominican publishers

18
Ujam, N (2001:1) “Entrepreneurship Development: A New Approach to National

Development” A seminar paper delivered at Abuja

CHAPTER THREE

METHODOLOGY

In this chapter the researcher explains the various methods and techniques

adopted in this study

3.1 METHOD AND SOURCES OF DATA

The method adopted in this study is the descriptions survey research. A survey is

carried out on a selected sample drawn from the study population the sources of

data are both primary and secondary.

3.1.1PRIMARY SOURCES

These include all those who are orally interviewed and those who completed

questionnaires.

3.1.2SECONDARY SOURCES

These include textbooks journals magazines periodicals, seminar and workshop

papers.

3.2 RESEARCH POPULATION

The population consists of all seminar officials of the national directorate of

Employment (NDE) of micro, small and medium enterprises (NAMSME) in Enugu

state. They are altogether 135 in Enugu State.

3.4 SAMPLING METHOD USED

The simple random sampling technique is used in selecting a predetermined

sample size of 705 from the study population.

3.5 QUESTIONNAIRE DESIGN

19
The questionnaire contains both structured and unstructured questions. The

structured questions either require the respondent to say ‘yes’ or ‘No’ or to choose

an answer from a range of options offered.

The unstructured questions are the open-ended type that allows the respondents

to express his opinion or to make comment.

3.6 DESCRIPTION OF RESPONDENTS

The respondents are officials of the Central Bank of Nigeria National Directorate of

Employment (NDE) and NAMSME. The NDE has the entrepreneurship promotion

programme (EPP) aimed at promoting entrepreneurship activities. The CBN uses

other banks to implement entrepreneurship promotion.

The National Association of micro small and medium enterprises also

operates to encourage entrepreneurship development. They both have various

entrepreneurship promotion schemes.

3.7 METHOD OF DATA ANALYSIS

In analyzing the data the researcher first presented them in tables as frequency

distribution in the analysis, the techniques of percentage and frequencies are

applied

CHAPTER FOUR

4.0 PRESENTATION OF DATA AND ANALYSIS

In this chapter, the researcher presents and analysis the data collected from the

respondents.

Table 4.1 Distribution and return of questionnaires

S/NO QUESTIONNAIRES NO %
20
1 Distributed 105 100

2 Returned 103 98.1

3 Not returned 2 1.9

4 Discarded 1 0.9

5 Analysed 102 97.1

98.1 percent were returned 1.9 percent were not 0.9 percent were discarded. This

97.1 percent are analysed

Table 4.2 Sex distribution of respondent

S/NO AGE GROUP (YRS) NO %

1 Under 40 22 21.6

2 40 – 50 23 32.4

3 51 – 60 37 36.3

4 Above 60 10 9.7

Total 102 100

21.6 percent are below 40 years of age 32.4 percent fall within 40-50 years age

group 36.3 percent fall within 51-60 age group while 9.7 percent are above 60

years of age.

Table 4.4 Marital distribution of respondents

S/NO MARITAL STATUS NO %

1 Single 33 32.4

21
2 Married 59 57.9

3 Others 10 9.7

Total 102 100

32.4 percent are single. 57.9 percent are married while widows, widowers and

divorcees constitute 9.7 percent.

Table 4.5 Educational distribution of respondents

S/NO EDUCATIONAL LEVEL NO %

1 Primary - -

2 Secondary 31 30.4

3 Tertiary 71 69.6

Total 102 100

30.4 Percent attained secondary school level while 69.6 percent attained tertiary

educational level.

Table 4.6 Organisational distribution of respondents

S/NO ORGANIZATION NO %

1 CBN 40 39.2

2 NDE 37 36.3

3 NAMSME 25 24.5

Total 102 100

39.2 Percent were drawn from the Central Bank of Nigeria (CBN); 36.3 percent

from National Directorate of Employment (NDE) while 24.5 percent were drawn

from the National Associaion of Micro-small and medium scale enterprises

22
(MAMSME)

Table 4.7 Responses to existence of entrepreneurship promotion

programmes/schemes in the organizations

S/NO RESPONSES NO %

1 Yes 102 100

2 No - -

Total 102 100

All the respondents agree that there are entrepreneurship promotion

programmes/schemes in their organization.

4.1 (Analysis of data from CBN staff)

The CBN officials taken into this study are 40 in number .

Table 4.8 Strategies used by CBN in promoting entrepreneurship

S/NO STRATEGIES NO %

1 Financial 40 100

2 Non-financial - -

Total 40 100

All the respondents in this group indicate that the CBN uses financial strategies for

entrepreneurship promotion in Nigeria. These strategies are designed to enable

potential and active entrepreneurs to alleviate their financial constraints in setting

up or / and managing their small-scale enterprises.

Table 4.9 CBN’s Entrepreneurship Promotion financial strategies

23
S/NO FINANCIAL STRATEGIES NO %

1 Agricultural credit

guarantee scheme 4 10

2 Credit guideline to banks 3 7.5

3 Small-scale industrial

credit guarantee scheme 3 7.5

4 Small-scale enterprises

promotion scheme 4 10

5 All of the above 26 65

Total 40 100

10% list the agricultural credit guarantee scheme; 75 percent list credit guidelines

to bank; 9.5 percent list small-scale industries credit guarantee scheme 10

percent list small-scale enterprises promotion scheme while 65 percent list all

these four schemes as the financial strategies used by the CBN to promote

entrepreneurship.

The agricultural credit guarantee scheme was established in 1989 to

guarantee repayment by the CBN for loans given by commercial banks to farmers

many farmer share benefited from this scheme. The CBN also gives guidelines to

banks on pattern of lending and credit ceiling for each year. In recent times the

preferred sectors have been small and medium-scale enterprises. Currently

commercial banks devote 10% of their profit to SME lending.

Similar to ACGs is the small-scale industrial credit guarantee scheme through with

the CBN guarantees repayment of credits given by merchant and commercial

banks to small-scale industrialists. Finally, the small-scale enterprises promotion

24
scheme is used by the CBN to provide small credits to small-scale enterprise

operators the scheme is managed by N.DK (now defanit) and NACB.

Table 4.10 Responses to CBN supporting other banks for entrepreneurship

Promotion

S/NO RESPONSES NO %

1 Yes 40 100

2 No - -

Total 40 100

All the respondents agree that the CBN supports other banks in giving financial

assistance for entrepreneurship promotion these are in the form of guarantees

and joint operation of some schemes.

Table 4.11 CBN support schemes for entrepreneurship Promotion

S/NO SCHEME NO %

1 SMEI AND II 3 7.5

2 FUSSI 5 12.5

3 NERFUND 5 12.5

4 SSICS 4 10

5 ALL OF THE ABOVE 23 57.5

TOTAL 40 100

7.5% mention SMEI and II 12.5% mention the fund for small-scale industries

(FUSSI) 12.5% mention National Economic Reconstruction Fund (NERFUND) 10%

25
mention the small-scale industries credit scheme while 57.5 percent mentioned all

these schemes.

The government established these various schemes and are administered by the

CBN through Commercial and Development Banks. NBCI operated SMEI and II

NERFUND exists under the CBN , Federal Ministry of Industries manage SSICS and

FUSSI and the paying bank is NBID.

Table 4.12 Responses to CBN soliciting for foreign Aid for Entrepreneurship

Promotion

S/NO RESPONSE NO %

1 Yes 40 100

2 No - -

Total 40 100

All the respondents agree that the CBN solicits for foreign aid for entrepreneurship

promotion. Both international agencies and financial institutions have been giving

financial institutions have been scale enterprises promotion in Nigeria.

Table 4.13 Aid giving foreign institutions

S/NO INSTITUTIONS NO %

1 World Bank 7 17.5

2 IMF 2 5

3 USAID 4 10

4 ADB 2 5

26
5 ALL OF THE ABOVE 25 62.5

6 OTHERS - -

TOTAL 40 100

17.5 , 5 and 10 percent indicate the World Bank, International Monetary Fund

(IMF) and United States Agency for Industrial Development (USAID) 5 percent

indicate African Development Bank (ADB) while 62.5 percent indicate all these

institutions.

All these institutions give financial aid through various projects in Nigeria for

entrepreneurship promotion. A example was the US$ 252m export stimulation

loan granted by the African Development Bank in 2001 to finance SMEs in Nigeria.

4.2 (ANALYSIS OF DATA FROM NDE OFFICIALS)

The NDE’s officials are 37 in number

Table 4.14: NDE’s Strategies for Entrepreneurship Promotion

S/NO STRATEGIES NO %

1 Financial

2 Non-financial

3 All of the above 37 100

Total 37 100

All the respondents indicate that the national directorate of employment adopts

both financial and no-financial strategies in promoting entrepreneurship in

Nigeria.

Table 4.15 NDE’s Financial Support Schemes

27
S/NO SCHEME NO %

1 Graduate job creation loan

scheme

2 Matured people’s loan

scheme

3 All of the above 37 100

Total 37 100

All the respondents state that the NDE’s financial support schemes for

entrepreneurship promotion are the graduate job creation loan scheme and

matured people’s loan scheme facilities or credits from these two schemes are

repayable over 9.5-yars period at a concessionary interest rate with varying

periods of moratorium. Over 2,300 SME’S have benefited through these schemes

in 2002 and 2003 alone.

Table 4.16 NDE’s Non-financial Schemes for Entrepreneurship Promotion

S/NO STRATEGIES NO %

1 Training and skill 7 27

Acquisition

2 Technical assistance 5 13.5

3 All of the above 25 62.5

Total 37 100

28
27 and 13.5 percent indicate training and skill acquisition as well as technical

assistance programmes respectively. 62.5 percent indicate the two as the non-

financial schemes for entrepreneurship promotion.

The training and skill acquisition programmes include the National open

Apprenticeship programme, special peoples scheme. Technical assistance include

equipment giving support which enables beneficiaries to over come the problems

of small-scale financing.

Table 4.17 Responses to extent of governments support

S/NO RESPONSE NO %

1 Yes 12 37.5

2 No 25 62.5

Total 37 100

37.5 Percent disagree that the government has done much for entrepreneurship

promotion while 62.5 percent disagree.

Table 4.18 Problems of NDE in promoting SME’s

S/NO FACTOR NO %

1 Inadequate government

financing 7 18.9

2 High loan default

3 High rate of fraud 6 16.2

4 Other (specific) - -

5 All of the above 24 64.9

29
 Total 37 100

18.9 percent indicate inadequate government financing 16.2 percent indicate high

loan default while 16.2 percent indicate high rate of fraud. 64.9 percent that all

these are the problems of NDE’s in promoting entrepreneurship promotion.

4.3 (ANALYSIS OF DATA FROM NAMSME’S STAFF)

The NAMSME’S staff are only 25 in number

Table 4.19 Responses to the Association encouraging entrepreneurship

development

S/NO RESPONSE NO %

1 Yes 25 100

2 No - -

Total 25 100

All the respondents agree that the association encourages entrepreneurship

development not only in Enugu Northbut throughout Nigeria.

The National Association of micro-small-scale and medium-scale enterprises

(NAMSME) is an association set up by these expansion, growth and development.

Table 4.20 Strategies adopted by NAMSME in Entrepreneurship Promotion

S/NO STRATEGIES NO %

1 Training programmes

30
2 Technical Assistance

3 All of the above 25 100

Total 25 100

All the respondents indicate that the association gives members entrepreneurship

encouragement through training and technical assistance. The association selects

and sends members to participate in governmental and non-governmental

organization entrepreneurship promotion programmes such as the NDE’s National

Apprenticeship programme, Centre for management Development’s programmes

family support programme etc.

Table 4.21 Responses to government giving fiscal incentives

S/NO RESPONSE NO %

1 Yes 25 100

2 No - -

Total 25 100

Again, all the respondents agrees that the government gives members fiscal

incentives for entrepreneurship promotion.

Table 4.22 Fiscal incentives given by government

S/NO INCENTIVES NO %

1 Tax relief 4 16

2 Cash inducement 3 12

3 Credit guarantee 3 12

4 Insurance 2 8

31
5 All of the above 13 52

Total 25 100

16, 12, 12, and 8 percent list tax relief, cash inducement, credit guarantee and

insurance respectively as government fiscal incentives to promote

entrepreneurship promotion. 52 percent listed all the them in order to promote

small and medium scale production of exportable commodities, the government

packages fiscal incentives for small and medium scale producers. These include

such tax relief as:

 In plant training which exempts them for five years

 Investment in infrastructure relief

 Local raw materials relief

 Manufacture in bond

 Import duty draw back

Other non-tax incentives are export credit guarantee, export development fund,

export adjustment scheme fund among others.

Table 4.23 Supporting Institutions

S/NO INSTITUTIONS NO %

1 CBN

2 Commercial Banks

3 Merchant Banks

4 International Agencies

32
5 International Financial

institutions

6 All of the above 25 100

Total 25 100

All the respondents indicate that the association receives support for

entrepreneurship promotion from all these institutions currently, as directed by

the central bank, all commercial and merchant banks allocate 10% of their project

to lending for small and medium-scale enterprises promotion.

Among international agencies and financial institutions that provides financial aids

for entrepreneurship promotion in Nigeria are the World Bank, IMF, USAID,

UNIDO, ADB, IDC, IFC, among others.

CHAPTER FIVE

5.-0 SUMMARY, CONCLUSION AND RECOMMENDATIONS

The following are the major findings of the study:

1. The Central Bank of Nigeria, National Directorate of employment and the

National Association of micro-small and medium enterprises are among

establishment that promote entrepreneurship in Enugu State.

2. Their entrepreneurship promotion strategies are both financial and non-

financial. The CBN’s financial credit guarantee, credit guidelines to banks,

small scale industrial credit guarantee scheme and small-scale enterprises

promotion scheme. The NDE’s financial strategies includes graduate job

creation loan scheme, and matured peoples loan scheme.

33
The NDE’s non-financial strategies include training and skill acquisition

programmes, technical assistance NAMSME also adopts the same strategies.

1. The CBN also supports commercial banks in promoting entrepreneurship

development through scuh schemes as SMEI and II loan, fund for small-

scale and industries, National Economic Reconstruction Fund and small-

scale industries schemes.

2. The government also uses fiscal incentives for entrepreneurship

promotion. These include various tax relief’s, cash inducement, credit

guarantee and insurance scheme.

3. The problem of NDE in promoting entrepreneurship include inadequate

funding, high loan default and fraud.

5.2 CONCLUSION

Based on the research finding the following conclusion can be drawn.

1. Financial and non-financial incentives are adopted as strategies by the

central-bank, banks government and international organizations or

entrepreneurship promotion in Nigeria

2. Training men and women in skills acquisition programmes and

technical assistance are adopted because of the need to inculcate

entrepreneurial skill and knowledge in them.

3. In spite of the laudable efforts so far made, the national apparently

still needs more than what exist now as entrepreneurship promotion

strategies.

5.3 RECOMMENDATIONS

34
The following measures should betaken to intensify and make entrepreneurship

promotion more effective in Nigeria:

 The current programmes for entrepreneurship promotion should be

upheld but should be revitalized. The Central Bank of Nigeria should

provide more funds for its various schemes and set up monitoring units

that will supervise the projects set up by beneficiaries of its programmes.

 The commercial and merchant banks as well as all the funds created by

the government to provide financial and technical assistance for young

Nigerians for entrepreneurship promotion should be more committed to

this objective. They should make more funds for school leavers and

young graduates to enable them become self-determining.

 The Federal Government should o-opt non-governmental organizations to

support entrepreneurship promotion. This should be more in the area of

training and skill acquisition. NGO’s with international affiliation should

arrange for foreign training for school-leavers in skill acquisition and

entrepreneurship development.

 Our secondary schools should devote more of their educational

programme to vocational and entrepreneurship training. This will prepare

larger number of school-leavers for entrepreneurial carriers instead of

white-collar job when they leave school.

5.4 LIMITATIONS OF THE STUDY

The study was not carried out without some difficulties. First, it was not easy to

collect adequate information for the study. This is because of the uncooperative

attitude of some of those approached for information. Secondary the area covered
35
in the study could have been expanded if the researcher had more fund at her

disposal thus, the area of the study was limited by financial constraint.

Finally other academic study limited the true available for the conduct of this

study.

5.5 SUGGESTIONS FOR FURTHER STUDIES

The following areas should be studied

1. Entrepreneurship development and national growth

2. Small business management and entrepreneurship development

3. entrepreneurship promotion and industrial development

4. foreign assistance and entrepreneurship development in Nigeria

REFERENCES

Adebusuyi, B (2003) Small business promotion and management Lagos. Inter

Publishers Ltd

Agwu, K (2002) Small business Management Owerri Concord Press

Aluko, S (2002) “The New Entrepreneurship spirit in the New Millennium” Business

Time Mon. Feb. 3

Carpenter, D (2002) The Modern Entrepreneur London: Cassel Ltd

Ezeife, P (1998) “ Youth Empowerment for self-determination; A new Approach to

National Development” A policy paper presented to the

national planning commission.

Hannis, O (2001) Small business Development New York McGraw-Hill books Inc.

36
Ike, J (2003) Entrepreneurship Development in Nigeria Enugu: Jamos printer

Nwatu, R (2003) Entrepreneurship Awka, Africana-fep publisher Ltd

Oduma, P (2004) The Hard Road to small business success Onitsha Tabansi

publishing Co.

Ogbodo, C (2003) Issues in small business management (ed) Enugu Oguagha

Printing Press

Ogudu, F (2002) Promoting Entrepreneurship in Nigeria, the Role of the

Government A policy paper presented by Federal Ministry of

Industry to National Planning Commission.

Schumpeter, P (2000) Entrepreneurship and Economic Development London

Pitman

Saaed, V (1998) Entrepreneurship Development California South-East Publishes

Co.

Ugbaja, C.O (2003) Issues in entrepreneurship Development (ed) Lagos:

Dominican Publishers

Ujam, N (2001) “Entrepreneurship Development; A New Approach to National

Development” a seminar paper delivered at Abuja

APPENDIX

Department of Business

Administration / Management

August 2005.

The Chairman

National Association of

Micro, Small and Medium

37
Scale Enterprises (NAMSE)

PERMISSION TO CONDUCT A SURVEY

I am a student in the above-named Institute carryout a study on “Strategies for

promoting entrepreneurship in Enugu State”

I want you to complete this questionnaire for me. The purpose of his study is

academic and so the information you provide will be used for no other purpose

Thanks

Yours faithfully

ILEDIAGU JUDE. O (MR)

QUESTIONNAIRE

INSTRUCTION

Please tick ( √ ) in the box that indicates your choice of answer, otherwise,

answer the question where necessary.

1. Name

2. Sex (a) Male [ ] Female [ ]

3. Age

4. Marital status. (a) Single [ ] (b) Married [ ] (c) others (specify)

[ ]

5. Educational level attained (a) Primary [ ] (b) Secondary [ ] (c)

Tertiary [ ]

38
6. In which or the following are? (a) National Directorate of Employment

Enugu [ ] (b) Central Bank of Nigeria [ ] (c) National Association of

micro-small and medium enterprises [ ]

7. Do you have entrepreneurship promotion programmes / schemes? (a) Yes

[ ] (b) No [ ]

(FOR CBN STAFF)

8. What strategy dos the CBN use in entrepreneurship promotion? (a)

Financial [ ] (b) Non-financial [ ]

9 List the financial schemes used as entrepreneurship promotion strategies

by the CBN

(a)

(b)

(c)

(d)

10. Does the CBN support banks in giving financial assistance for

entrepreneurship development? (a) Yes [ ] (b) No [ ]

11. If ‘Yes’ through what scheme

(a)

(b)

(c)

(d)

12. Does the CBN solicit for foreign and for entrepreneurship promotion? (a)

Yes [ ] (b) No [ ]

39
13. If ‘Yes’ which foreign institutions give financial support for

entrepreneurship promotion in Nigeria?

(a) World Bank [ ]

(b) IMF [ ]

(c) USAID [ ]

(d) ADB [ ]

(e) Others (specify)

(FOR NDE STAFF)

What strategy dos the CBN use in entrepreneurship promotion? (a) Financial [

] (b) Non-financial [ ]

9 What are the financial support scheme?

(a)

(b)

(c)

(d)

10. What are the non-financial scheme?

(a) Training and skill acquisition programme [ ]

(b) Technical Assistance [ ]

(c) Other (specify) [ ]

11. Do you think that the Nigerian government does much to promote

entrepreneurship in Enugu State? (a) Yes [ ]

(b) No [ ]

12. Outline the problems of NDE in entrepreneurship promotion in Enugu

North

40
 (a)

(b)

(c)

(d)

(e)

(FOR NAMSME STAFF)

8. Does this association encourage entrepreneurship promotion? (a) Yes [

] (b) No [ ]

9 If ‘Yes’ What strategies does it use?

(a) Training members in entrepreneurship development institutes [

(b) Training members under government sponsored skill-acquisition

programmes [ ]

(c) Providing technical assistance [ ]

10. Does the government gives you members fiscal incentives? (a) Yes [ ]

(b) No [ ]

11. If ‘Yes’ outline the fiscal incentives

(a)

(b)

(c)

(d)

12. Which of the following give(s) the association assistance for

(a) Central Bank [ ]

(b) Commercial Banks [ ]

41
(c) Merchant Banks [ ]

(d) International Agencies [ ]

(e) International Financial institutions [ ]

42