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CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY

The main strategy for the establishment by the entrepreneurs of Small and Medium Enterprises (SMEs) and its promotion by various sectors, is to enhance job creation, promote economic growth, reduce poverty. The importance of Small and Medium Enterprises (SMEs) in any economy cannot by overemphasis. They constitute the smallest unit of business. They predominate in most sectors of the economy occupying every available space such as form enterprises in the rural areas, provision store, bakery, pure water production, garri processing or food processing industries.

Although, many writers have talked about the financing of the Small and Medium Enterprises in pre-consolidation and post-consolidation periods of Banks towards the enterprises development, the issue of credit accessibility and affordability as it affects economic development has not been stressed. The concern of this research is to examine the extent of promotion accorded the entrepreneurs of Small and Medium Enterprises. (SMEs) and the level of economic development in the rural communities.

The history of industrial revolution in developed and developing economies or countries has shown that Small and Medium Enterprises (SMEs) are driving force of industrial development. It is therefore, the attention of the government, the world over to focus on the funding and supporting of Small and Medium Enterprises (SMEs) activities. Available evidence shows that Small and Medium Enterprises (SMEs) are characterized by being managed by their owners as proprietorship or partnership. They are largely local in the areas of capital and relatively small size with the industry.

Small and Medium Enterprises (SMEs) predominate in the private sector of the Nigeria economy. Almost all of them are starved of funds. The relative importance of the enterprises differs from one type of business to another. The major areas of business enterprises activities are in manufacturing, rendering services and product distribution.

Banbeck (1983) included in his publication on “Basic Small Business Management” that more than one-third of all the manufacturing firms in Nigeria employ fewer than five persons or none at all and that close to two-thirds employ fewer than twenty workers. His study on the whole revealed that five per cent of non-form business of all kinds employs fewer than fifty workers each.

The characteristics of Small and Medium Enterprises (SMEs) largely constitute the basis of their problems and special needs that have attracted different authorities and sectors in recent past. It is also the focus of this research to critically examine and measure the effects of the government funding programmes on Small and Medium Enterprises (SMEs) activities. Though the result of the findings from the respondents/enterprises, the study will determine how much of the support have been received from the programmes and extent of development experienced in the population Okehi LGA. Kogi State.

The study is further intended to reveal the various enterprises with Okehi communities with a view to identifying their business activities, proffering solutions to the identified challenges impeding their effectiveness and proficiency to achieve economic development.

STATEMENT OF THE PROBLEM

The research examines in all possible ways, the extent of government funding programmes in the promotion of Small and Medium Enterprises (SMEs) in the population area as well as the impact on the socio-economic development of the area covered by the scope. The study further identifies the peculiar problems or challenges the SME sub-sector associated with their smooth operations. Possible suggestions to provide engine for economic growth and prosperity in the industries is also the focus of this

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Account Name: 3059320631