CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The role of the small and medium enterprises (SME) as a catalyst for economic growth and development has been well documented in the economic literature and recognized in most countries. For example, in many of the newly industrialized nations, more than Ninety eight (98) percent of all industrial enterprises belong to the small and medium enterprises sector and account for the large mass of the labour force. Small and medium enterprises enjoyed competitive advantage over large enterprises in serving dispersed local market. Knowledge of this fact, programmes of assistance especially in the area of finance extension and advisory services, as well as provision of infrastructure have been designed by the Nigerian government for the development of small and medium enterprises.
Specially, successive government in Nigeria have in the last three decades shown interest in ensuring satisfactory financing for small and medium enterprises (SMES), by establishing various schemes and specialized financial institution to provide suitable financial to the sub-sector. The role of small and medium enterprises in fostering economic development has also been well activated in different forms of this nature. The specify attention on them is based on their expected impact and potential contribution on board and diversified production base as well as their accelerative effective in achieving macro objectives pertaining to full employment, income distribution and the development of local technology. They are particularly most conducive for diffusion of management skills and stimulation of indigenous entrepreneurship overtime. Effective role in promoting the growth of small and medium scale enterprises in recognizing the flexible and adaptive nature as well as the economic development in believing that a dynamic and growing small and medium manufacture sub-sector can control significantly to the implementation of a wide various policies to encourage their proliferated and make them credible engine grown and development.
The basic objective of growth and development policies as contained in the monetary policies are fiscal policy measures to improve financing and other supportive service to small and medium scale enterprises by expanding and improving their access to credit and infrastructural facilities reducing their production costs, boosting their profitability, enhancing by making their products competitive in the export market. This seminar aims at examining various government policies and their effects on the survival and growth of small and medium scale enterprises. It is important for us to understand and appreciates what constitutes of small or medium scale survival, growth and proliferation for which government policies have been formulated to address.
1.2 Statement of Problem
An important feature associated with small and medium scale industries, which is particularly relevant to our economic problem, is that these industries characteristically depend less on imported inputs relatively to their local capital investment than large firm. In view of the economic situation and alarming rate of the unemployment in society, it is important to determine the effective of government policies on small and medium enterprises have on our economic development and their impact on the society at large. The study of intents to examine constraints encountered by small and medium scale industries. Hence, the federal government continues to lay emphasis on self-reliance industrialization through the encouragement of small and medium scale industrial development.
New lending schemes and credit institution at both local and federal levels has been establishing to encourage the development. They include the national economic reconstruction fund (NERFUND), the national, Directorate of Community Bank and other Development Bank. Inspite of these measures, small and medium scale industries in all parts of the federation has continued to face high rate of business failures because of their reliance of foreign raw material imputs. Small and medium scale industries are the pivoted on then which any developing economy like Nigeria stands. They creates more jobs per units of investment then large scale ones the there is a problem as to whether their poor performance in as a result of dependence of foreign raw material inputs. This problem raised this question, will the establishment of small and medium scale raw material processing industries such as palm oil processing plant help to boost the development of small and medium scale enterprises in Nsukka zone in particular and the country in general it is the answer to this question that is focus in this research.