AN APPRAISAL OF THE SOURCES OF FUNDS TO MEDIUM AND SMALL BUSINESS CONCERNS IN ENUGU STATE.
The purpose of this study is to appraise the sources of funds to medium and small-scale business concern in Enugu State (A case study of eastern plastics Nigeria Limited Enugu).
In line with this major objective, there research questions and data of this study were source through structured oral, interview and copies of questionnaire distributed to the thirty three staff of this enterprise. All the copies of the questionnaire were returned and used in the study.
On the basis of data presented and analyzed the following findings were made.
- That the various of sources of funds available to Eastern Plastic Nig. Ltd were not only limited but a large quantity or extent grossly inadequate to center for the varying needs of the company.
- That problems associated with cost of funds vis-a-vise these sources greatly affected negatively the availability of capital to this enterprises.
- That the lack of adequate funds to this enterprises hinders their operations in terms of the production of higher quality plastic product at affordable prices.
On the loans of this findings the following recommendations were made:
- That the government (state & federal) and their agencies should frontly ensured that the adequate fund are provided to this organisation at relative cost.
- That all the enabling environment which will guarantee the growth and development of small/medium scale business concerns in Enugu State, as a catalysts towards economic emancipation of our people should be provided for these business outfits.
- That; to significantly increase the sources of funds to this organisation, such measures like tax exemption on retained earnings, reduction of interest rates charged by banks etc should be put in place.
TABLE OF CONTENTS
Table of contents
List of tables
CHAPTER ONE – INTRODUCTION
- Background of the study
- Statement of the Research Problem
- Purpose of the study
- Research question
- Significance of the study
- Scope of the study
- Definition of terms
- Background history of the company
- The concept of small/medium scale business concerns
- The concept of cost funds
- Operation methods of small/medium scale business
- Sources of business fund to small/medium scale business
- Hindrances against loans for small biz
- Importance of keeping financial records by small/medium scale business concern
- Risk of financial management
- Problems of capital acquisition
CHAPTER THREE – RESEARCH METHODOLOGY
- Design and Area of study
- Population of the study
- Sampling method/size
- Description of instrument used
- Validity of the Instrument
- Method of collective data
- Presentation of Data and Analysis
- Analysis of Data
- Summary of findings
- Other findings
- Limitations of study
LISTS OF TABLES
- Are the various sources of loans/capital Available to Eastern Plastics Nig. Ltd, Emene.
- What are the difficulties encountered with these sources and the cost implications of each source?
- Does this company employ the services of qualified accountants in their day-to-day financial operation and transaction?
- What measures can be taken to significantly increase the availability of fund to this business concern so as to enable them meet their corporate goals?
1.1 Background of the Study
Conceptually business is the exchange of goods, money or services for mutual benefit. In other words, a business enterprise succinctly put is the sum total of those activities that have as their main purpose, the creation, maintenance and expansion of a concern which continues to exist, because it earns profit or other benefits, as a result of this exchange of goods and services or money.
Historically, business activities came into existence when our forefather began to trade by barter, that is exchange of goods for goods) having realized the different capabilities and talents possessed by individuals and the enormous times energy wasted in trying to become self sufficient. No wonder why, the age long aphorism that “No man is an Island” is an accepted contention of most critics.
As a rule of thumb, this exchange of goods existed in many parts of the world including Egypt, Europe, Germany and some parts of Africa Albelt, the advert of industrial revolution made man to conceptualize and then concretize that serious need to develop his genetic and phenotypic qualities in trying to specialize in one trade or another, thereby making life more satisfying to the generating of the people. Conceptually different types of business enterprises have evolved over the years ranging from sole proprietorship to partnership, co-operative companies to even corporation or public liability companies (PLC). All those were primary established for the production distribution and provision of services to the entire human race (Homo Sapiens).
On the whole, modern business enterprises are characterizes by rapid technological changes; speculation/forecasting with a high degree of inter-dependence and precision, and increased number of mergers. As of today, the complexities of business and modern technological advancement encourage the formation of companies that engage only in production; while selling and many types of small business enterprises such as Supermarket Retailshops, Parent medicine stores, provision stoves, motorcycle spare parts shops, plastic producers etc. have all sprang up.
Enugu as an ancient city is consistently being converted from a pure traditional setting into a fast growing cosmopolitan city. Enugu was the capital of the Eastern Region, which was later sub-divided into East Central State; and presently, Enugu is the capital state; after the Nigerian Civil War. There has been steady but gradual influx of people from other state particularly the nearly states like Imo, Anambra, Ebonyi, etc, either as traders or workers. And with a lot of Federal and State establishments, there was a tremendous increase in the number of people coming from other states into Enugu. This situation has indeed made the population of Enugu to be a mixed one.
As a rule lunch, the major economic activities in Enugu are civil service working with either at the Federal of State establishments, a lot more are still engaged in large scale medium scale enterprise scattered almost everywhere in the city including of course, Easter Plastics at along Enugu-Abakaliki Express Road, Emene, Enugu.
This research work would thus highlight the major issues surrounding he sourcing of funds for small/medium scale business concerns with particular reference Eastern Plastics Enugu-Abakaliki express road Emene, Enugu. It would also evaluate the relevance of having a balanced working capital as this will serve as important basis for the inculcating of the need to have a proper internal control of funds when finally obtained by this enterprise.
1.2 STATEMENT OF THE RESEARCH PROBLEM
In general one major panacea proffered by well meaning Nigerians on effective way of reducing unemployment in this country, thereby increasing productivity is through the establishment and sustenance of small scale/medium scale business enterprise all over the country. Little wonder then, why most government; both past and present and the three ties hand in one way or another, enunciated well articulated but perhaps, poorly implemented programmes, all of which were aimed at increasing the awareness required for this kind of business enterprises/concerns.
Incidentally, virtually all small/medium scale concern is almost part of the world including Enugu, started in a very low way, but they gradually and steadily expanded. In other words most of these small/medium scale business concerns passed through a period of metamorphosis, generally beginning virtually with little, but subsequently, graduating into full-pledge business concerns. Some of these business enterprises/concerns even got matured into large-scale business enterprises/public liability companies after some period of transformation and sustained development.
However, the issue that arises is why should such a period of gestation or transformation take place in the establishment and expansion of small/medium business enterprises?
One school of thought holds it that the above trend suggests and even indicated that small/medium business enterprises have problems in obtaining the initial capital to start off their operations and subsequent expansion. Worst still is the generally accepted motion that such capital when finally obtained some times is poorly managed, and even in some extremely cases, embezzled by the top management. On the whole, any of these circumstances, can greatly affect the establishment of these business enterprises. therefore, ascertaining the authenticity of these schools of thought by first identifying the various sources of capital to small/medium scale business enterprises with particular reference to Eastern Plastic Nig. Ltd at along Enugu-Abakaliki Express Road Emene, Enugu is the major thrust of this work. The study will equally investigate thoroughly the difficulties encountered by their company in sourcing capital as well as finding out, how such capital if obtained, is managed for the successful operation of this company, in it’s bid to meet their specific and corporate objective/goals.