An Evaluation of Government Incentives Schemes towards Small Scale

An Evaluation of Government Incentives Schemes towards Small Scale. (A Case Study of Some Selected Small Scales Firms in Enugu Metropolis)

Chapter Three


This chapter deals with the method used for collecting of the data that was required in carrying out this research work. It equally explains the procedures that were followed in presenting data and the instruments used for data collection.

The Design of the Study

This part of the research work explicitly death with how the research was executed.  It will among other things highlight the type of data collected, sources, location and the methods of collecting such data.  It will equally deal with how the data will be presented as well as the techniques adopted for data for data analysis.  Therefore this chapter will serve as a plan showing what and how the descriptive survey research was carried out.

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Population of Study

The population of study is all members of a well defined group.  In an ideal situation, the topic is meant to cover the entire Enugu state but due to some logistic problems and difficulties in carrying out a complete enumeration, some selected small-scale enterprises in Enugu metropolis.  Having gone to these firms, it was discovered that the total population of the study is fifty – four (54)

Sample/Sampling Technique

Having selected an accessible population of fifty four (54)

workers, from both the selected small scale enterprises in Enugu and government incentives schemes, it was deemed important to determine the number of questionnaires to be given to the selected sample method.  A statistically determined sample size is vital by using a formula.

N       =       N/1 + N (e)2

Where N= sample size

N       =       sample population         =       54

E       =       Margin of error    =       10%

N       =       54/1 + 54 (0.1)2

A total of 35 questionnaires was issues to select workers randomly

Instrument for data collection

The instrument adopted for data collection is Questionnaire, which is approved by the supervisor.  The nature of the questionnaire is structured such that the respondent has a number of response options such as ‘strongly agree, agree, disagree and strongly disagree’. The content of the questionnaire is based on the research and objectives of the study.

Validity / Reliability of Instrument

These are measures used to ensure that the data collected measures what they are expected to measure and as such could be relied upon.  Therefore the researcher adopted a test-retest technique to test the validity and reliability of his data.  In this regard, a respondent who completed a questionnaire will be asked to complete it again and his choices are compared consistently.

Method of Data Collection

The method of data collection as earlier stated through questionnaires.  In this view, the researcher administered the instrument himself through direct mailing to the respondent to reduce the incidence of non-response.

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Method of Data Analysis/Presentation

The method used for presentation of data in this research work include, table, charts and percentages while the tools for date analysis are T-square, x2 and the Pearson product moment of correlation coefficient while T- square provides a means comparing a set of observed frequencies with a set of observed frequencies (ORJIH 1996) the formula is x2 =  E(O-E/E)2

Decision Rule: Reject null hypothesis (HO) if the calculated value of X2 at the level of significance and the degree of freedom is higher than the critical value otherwise accepts the null hypothesis (clark and clark 1983).  The pearson product moment measures the relationship between two variables.

Formular = E (x-x) (y-y) OR Nexy-Ex Ey

E (x-x-)2 E(y-y

2 Nex2) Nex2 – (Ex)2 NEY2 – (2y)2

Decision rule: where the computed value is a positive one it indicated that a perfect positive relationship exist between the variables and a negative relationship between the variables renders consideration while a zero value indicates that there is no relationship.

Chapter Five

Summary and Conclusion

Summary of Discussion

There is actually incentive set up by the government.

We have presented, analyzed our response from the questionnaire and it was discovered that there are incentive scheme set up by government to help small scale enterprises in Nigeria, but it was discovered as well that these incentives schemes set up does not actually help the small scale industries because they encounter some problems in an attempt to receive loans and incentives.  Infect, they hardly receive loan from these scheme.  This implies that there are some problems encountered by these small scale enterprises in an attempt to receive loans and many times they do not receive the loan

1        Small scale enterprises are ineffective towards the development of the economy:  this is another finding based on the questionnaire. Small scale enterprises contribute little or nothing towards the development of the economy because of their little capital with which they operate and as well they find it difficult getting loan or incentives from the government incentive schemes.

  1. To get loan from NERFUND, they have to meet up with certain conditions which many a time, it is very difficult for them to get loan or the loan from peoples bank is as low as N500 and N2000 and usually for 90 days or 12 months with 7% and 15% respectively which makes it difficult to develop the business before talking about the economy.
  2. It is possible for government to assist small scale enterprises irrespective of their size and number: it was also discovered that government can assist the small scale enterprises despite their large number. However, these help is not firth coming.  In rare cases when they come, the amount granted will be very small to boost their activities.
  3. It was also discovered that if given the necessary assistance, the small scale enterprises can complement the activities of large scale enterprises.This goes to infer that incentive scheme can improve the activities of small scale enterprises if they are genuinely granted and for a reasonable time that could aid development of their business and the economy in general. It was discovered also based on our literature review that the impact of government incentives schemes towards small scale business still falls short of expectation given that less than 15% of the total applicants have benefited from the scheme.
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Equally we discovered that failing to benefit of non-provision of feasibility report, acceptable collateral etc.  it was also found out that the promotion of small scale industries by providing aid and loan will be a major tool for boasting employment in the country thereby bringing about growth and development to the nation.  It was equally discovered that there is high rate of default by the small scale enterprises,. They also always in the habit of not willing to repay the loan collected from the scheme. This is because they see such loan as part of their national cake.


It is quite obvious that small scale business are risky and

rejected by the conventional banks to Nigeria, and as a result, government came up with various different schemes to assist them but the business operates usually default.  Therefore, to tackle this problem, a firm of risk guarantee scheme with a wide range support mechanism should be put in place to ensure prompt repayment of loans and credit.

The strongest conditions that made it difficult for the small scale enterprises to receive loans advances should be tackled and some checks put in place to ensure compliance when loan are received other than making it very difficult for them to receive credit from the scheme.  To make small scale enterprises, very effective towards the development of the economy, the amount granted as loans to them should be increased so that it will be reasonable enough to sustain their business and as well trigger development, the duration of the loan should be made a medium term rather the short term.

Government should fix the interest rate charged on loans received by small scale enterprises through the scheme at a very low rate.  Infect lower than 3% to make the scheme or the loan attractable to the small scale industrialist.

There should be measures to put in place as to the fund by beneficiaries.  The essence is to make sure that the fund is not misappropriated to other venture other than that which it received.  There should be modalities on how to recover the loans rent to small scale business.

Limitation of Study

This research work is meant to cover the entire small

scale business in Enugu state.  However, this scope will be very difficult to cover due some constraints.  The scope is limited due to time, lack of finance and so many other constraints delimit the work to some selected small scale enterprises in Enugu metropolis.

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Suggestions/Area For Further Studies

This topic “an evaluation of government incentive

Scheme towards small scale enterprises”.  A case study of Enugu state is very extensive.  Considering the importance of small scale enterprises in economic development, there is the need for further research on this topic and other related topic like an analysis of financial goal, of small scale enterprises in Nigeria, an assessment of the performance of small scale enterprises towards economic development, increasing family disposable income through establishment of small scale enterprises.  An in depth study on this topic and other related topics will help in boosting economic development of Enugu state in particular and the nation in general.

5.5     Conclusion

Government has taken cognizance of the role of small

Scale enterprises towards ensuring a meaningful and sustainable growth and development of the economy.  In the light of the above they come up with a good number of policies and incentive schemes to asset these small scale industrialist to grow in their business as well bring about growth to the economy.  The assistance sought to extend to these classes of entrepreneurs are finical and technical assistance through the establishment of special credit institutions and programmes.

However one would expect than funding of small scale enterprises will be adequate, give all these incentive scheme but unfortunately it is not so.  The result of this study revealed that their findings are inadequate due to the stringent conditions that should be met before recoiling loans.  As a result of that, only 15% of the total applicants benefited from the scheme.



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