ENTREPRENEURIAL COMPETENCIES NEEDED BY BUSINESS EDUCATION GRADUATES FOR MANAGING SMALL SCALE BUSINESSES

ABSTRACT

 

This study examines entrepreneurial competencies needed by business education graduates for managing small scale businesses. A sample of 100 were composed and used for the study through purposive sampling technique. Three research questions were formulated to guide the study. The instrument used for data collection was questionnaire titled “entrepreneurial competencies needed by business education graduates for managing small scale businesses which was design using Likert – 5- point rating scale. The entrepreneurial competencies needed by business education graduates for managing small scale businesses was specifically used to obtained information base on the research questions. The research questions were answered using mean with standard deviation. It was found that Skills such as welding and fabrication, food and catering services, electrical installation etc can make Nigerian graduates entrepreneurs to reduce unemployment. Creation of jobs for self-employment, stimulation of rural, economic and industrial development are benefits of entrepreneurial education to Nigerian graduates. Based on the findings, it was recommended among others that Entrepreneurial education in tertiary institutions should be practically oriented rather than theory as this will exposed the students to various lucrative skills, Access to credits/loans should be granted without collateral in order to make the training realizable and achievable.

 

CHAPTER ONE/INTRODUCTION

BACKGROUND TO THE STUDY

Nigeria is bedeviled by a myriad of problems which, despite her oil wealth, inhibit her development and even threaten her continued existence as a sovereign state. Nigeria’s socio-political and economic circumstances give the significant indication that many of her problems stem from an origin of artificial colonial construct which lumped together a variety of separate peoples. Fragmentation of the nation is seen as a distinct possibility unless its citizens can be induced to accept a new sense of Nigerian identity, involving a commitment to the survival of the present state as a cohesive entity. This would necessitate a number of radical changes, not only in the political and economic structure of the country but also in the psychology of the people.

Nigerians have lived through series of administrations underdifferent governments, and the question still arises, ‘is Nigeria a nation at all?’ A critical look at what the government calls reform reveals a personally instituted concept of governance, filling the seats of power with those they believe to be their kin, rather than have professionals in the positions of merit, and a breed of people typified by their integrity of heart, ingrained in the trainings and qualifications they have received in the course of service to the nation. The increasing number of those who are not gainfully employed or adequately educated in the country, remain preys as political tools of violence as it has been seen in the history of violence occurring in the country over a period of time. The country has depended much on oil as its major source of revenue for years, however, the current administration also fails to recognize that the future of the country may very well depend on the economy of its people(the youths), which is possibly the only untapped, ill harnessed, most lucrative resource of the country. If it remains this way in the next ten years, putting into consideration the effect of increased poverty, lack of employment, poor educational system, it is unpredictable what the result will be. The table below shows the statistical data of the rate of unemployment and the population rate from 2006 to 2011 in Nigeria. It is the result of a survey carried out by the National Bureau of Statistics and shows that persons aged 0-14 years constituted 39.6%, those aged between 15-64 (the economically active population), constituted 56.3%, while those aged 65 years and above constituted 4.2%. Analysis of employment data for the past 5 years show that the rate of new entrants into the labour market has not been uniform in the past five years.

• The rate was on the increase from 2007 to 2009 but declined significantly from 2009 to 2010. The rate increased again from 2010 to 2011. Within the five year period, there has been an average of about 1.8 million new entrants into the active labour market per year.
• Governments, or local leaders, who are generally not held accountable for how much money is spent, and how education systems are managed,
• Sufficiency attitude – What is provided for the poor is good enough
• Inadequate pro-poor infrastructure or support systems this makes it difficult to implement successful poverty eradication interventions
• A lack of systematic tracking of pro-poor interventions – in this way, it is extremely difficult to know if the activities and programmes implemented have had any impact at all. Nigeria cannot combat the ills of the society just by raising its budget; there should be a strategic systematic approach to education that would bridge the gap between its service delivery and its effectiveness in the country.

1.2 STATEMENT OF THE PROBLEM

Education in Nigeria is devoid of the element crucial to averting the surging rate of unemployment in the country, therefore the breeding of psychological dependence on direct access to money. Entrepreneurial development through education will advance the economy of the nation; much credence should be given to it and ingrained with focus on profitable personal development. Unemployment prevails in the country, hence, the growth of violence, poverty and segregation amongst citizens, because the educational system itself fails to empower the ones passing through it. This should be the core message of the evolving educational policy of Nigeria which is devoid of a system of education that emphasizes on the need to culture the country’s young through the knowledge of rudimentary entrepreneurial development, common cultural heritage, and identification of exploitable strengths of structures, systems and cultures of others.

Objectives of the Study

The purpose of this study is to examine entrepreneurial competencies needed by business education graduates for managing small scale businesses

Objectively, the study tends to:

1. identify skills that can make Nigerian graduates entrepreneurs to reduce unemployment rate.
2. examine the benefits of entrepreneurial education among Nigerian graduates.
3. describe the challenges faced by Nigerian graduates in entrepreneurial education.

1.4 Research Questions

The following questions were answered t guide the study.

1. What are the skills that can make Nigerian graduates entrepreneurs to reduce unemployment rate?
2. What are the benefits of entrepreneurial education to Nigerian graduates?
3. What are the challenges faced by Nigerian graduates in entrepreneurial education?

1.5 Significance of the Study

The focus of this study brings to the fore the crucial need for entrepreneurial education in Nigeria, putting more consideration on the educational system, strategies and its eventual social developmental effect in the society. The study highlights the problems of the level of education in the country and its equivalence to level of poverty in the society by virtue of lack of employment or knowledge of how to startup businesses. One of the MDG goals highlights education as a critical factor for reducing poverty and dependency in developed nations. Therefore, this thesis contributes to knowledge by identifying what is important to the economy, which is qualitative education focused on the needs of the economy per time, rather than the resolution of the United Nations to increase budgetary details or increasing the number of people that go through school. This is not the first paper on entrepreneurial education; however, it is the first to do a comparative study on what is being implemented by different universities to see its effectiveness in order to ascertain the strategy which would eventually help for the Nigerian economy in truly eradicating unemployment in Nigeria.

1.6 Scope of the Study

The study is specifically limited to entrepreneurial competencies needed by business education graduates for managing small scale businesses

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SOURCES OF FUNDS AND SMALL MEDIUM SCALE BUSINESS IN RIVES STATE NIGERIA

CHAPTER ONE.INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Small scale enterprise is very crucial to the development of a country’s economy, especially a country like Nigeria. Entrepreneurship enhances national development, poverty eradication and employment generation. It is the bedrock of any nation’s industrialization.

By definition, small and medium sized enterprises SMEs are seen as the entrepreneurship businesses with small number of employees, small investment capitals and small annual business turn over. According to statistical figure showing the importance of micro, small and medium scale business MSMEs, sector to Nigeria economic growth. A survey carried out by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in conjunction with National Bureau of Statistic (NBS) in 2013 revealed; the total number of MSMEs in the country as at 2013 stood at 37,067,416 with micro businesses recording 36,994,578, small businesses 68,168 and medium businesses recording 4,670. The total number of persons employed by the sector as at Dec, 2013 stand at 59,741,211 representing 84.02% of Nigeria’s total labour force.

Nigeria is an entrepreneurial economy with an estimated 37million micro, small and medium-sized companies, whose contribution to economic growth and job creation is significant. Contributing over 48% to the GDP, employing over 60 million Nigerians and contributing over 7% to exports according to the National Bureau of Statistics.

In Nigeria the level of finance for entrepreneurship is one of the lowest in the world, however, while the World Bank (2010) report indicates that Nigeria’s financial system is highly capitalized and vibrant, her contribution to entrepreneur and MSME’s sector is about 1.6% of the total loans and advances to the private sector as of 2009 (CBN,2009).

Source to finance is the ability of individuals or enterprise to obtain financial services, including credit, deposit, payment, insurance and other risk management services.

Credit is generally understood to mean the finance provided to others at a certain rate of interest and the creation of credit is one of the most important functions of commercial banks.

However, less than a third of the country’s MSMEs have successfully obtained a loan from financial institution, instead, most use their personal savings or reinvested profits as a source of business financing, the smaller the business, the less likely it is to have applied for and received a loan from any financial institution. Many of these businesses have the potential to become bigger and more prosperous but their growth is restricted for a variety of reasons which access to credit is the major.

Access to credit has been identified as one of the key factors required to accelerate growth and improve welfare in developing countries. There is need to intensify efforts in making credit accessible to entrepreneurs, since this will liberate majority of the population from poverty, encourage savings and improve investment in physical and human capital which promotes economic growth. Entrepreneurship would be significantly enhanced through the provision of credit facilities to enable them engage in economic activities and be more self-reliant, increase employment opportunities and create wealth (CBN, 2005). The importance of credit access to entrepreneurial development made the central Bank of Nigeria adopt the financial institution as the main source of financing entrepreneurship in Nigeria. Despite this however, finance is still considered as one of the major hindrances to entrepreneurial development in Nigeria (Ubom, 2003).  While government and non-government organisation (NGOs) have been engaging a number of programme and policies to encourage entrepreneurship in the country. Based on the introductory discussion the paper therefore seeks to examine access to finance and entrepreneurial development.

1.2 STATEMENT OF THE PROBLEM:

A research carried out by Okpara and Wynn (2007) on small business development showed that the rate of their failure in developing countries are higher than in the developed countries.

In Nigeria, empirical report shows that an estimate of about 70% of the industrial employment is held by SMEs and more than 50% of the Gross Domestic Product is SMEs generated (Odeyemi, 2003). Given the role of SMEs to the economy of Nigeria, various regimes of government since independence in the 1960s, have focused on various programs and spent immense amount of money with the primary goal of developing this sector, these have however not yielded any significant results as evident in the present state of the SMEs in the country (Mambula, 1997). SMEs are generally very susceptible and only a certain number of them manage to survive due to several factors such as difficulty in accessing credits from banks and other financial institutions.

The Financial systems in every country play a key role in the development and growth of the economy, although the ability to play this role effectively and efficiently largely depends on the degree of development of the traditional commercial banks which are key players in the financial systems of nearly every economy, have the potential to pull financial resources together to meet the credit needs of SMEs, however, there is still a huge gap between supply capabilities of the banks and the demanding needs of SMEs.

In spite of the enormous contributions of SMEs in the economy, access to credit facilities from banks and other formal financial institutions has been one of the main issues of SME development, there are various constraint that hinders the smooth access to credit facilities from the formal financial institution which include collaterals, high interest rates charged on loans, literacy levels and the number of lending institutions etc. This study sought to examine access to finance and their role in entrepreneurial development.

1.3 RESEARCH QUESTIONS:

The research was guided by the following research questions;

What are the difficulties SMEs face when access finance from various sources?

Are there any awareness of microfinance institutions (MFIs)  by SMEs?

1.4  OBJECTIVES OF THE STUDY

The broad objectives of the study is to investigate the sources of funds and small meduim scale business in rivers state. To achieve this broad objective therefore, the following two specific objectives were formulated, to:

assess the difficulties SMEs face when access finance from various

evaluate the awareness of microfinance institutions (MFIs) by

1.5 RESEARCH HYPOTHESES: 

The following hypotheses were formulated:

There is no significant difference in the difficulties SMEs face when accessing finance from various

There is no significant difference in the level of awareness of MFIs by

1.6   SIGNIFICANCE OF THE STUDY

Considering the importance of entrepreneurship in any economy, it is important to understand the role of the financial institutions on entrepreneurial development in the country and the challenges facing the entrepreneurs in the accessing credit.

1.7      SCOPE OF THE STUDY.

This study laid emphasis on sources of funds and small meduim scale business in Rivers state. Due to the large population of the study which is impossible for the researcher to cover, three local government where thus focused on. They are Obio-Akpor, Okrika, Ogu–Bolo and Eleme.

1.8    DEFINITIONS OF TERMS

Entrepreneurship – The art or science of innovation and risk-taking for profit making in business.

Access to finance – The ability of individuals and enterprises to obtain external funding to enable them ease cash flow problem.

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Sources of Finance and Factors Hindering Cooperative Societies in Development of Nigeria

INTRODUCTION

The cooperative societies are member-owned, volunteer-led, self-help and democratic institutions that provide financial services to their members. Cooperative society in Nigeria are not constituted to make profit and are openly committed to service the needs of disadvantaged communities and individuals, many of whom have been abandoned by mainstream banking. The motivation behind the formation of cooperative societies is to encourage thrift among their members and to pool these savings into a fund from which members can borrow from this should they need to do so. Their depositors are also their borrowers who know one another through some common bond and this pre-existing social connection helps to circumvent problems of imperfect information and enforceability. Cooperative societies have a distinct economic and social philosophy, and are unique and special cooperative financial institutions. Their cooperative credentials encompass a number of operating principles including open and voluntary membership, democratic control, limited (but fair) returns on share capital, with any surplus equitably distributed to members at their Annual General Meeting (AGM).
The Third National Development Plan for 1975 to 1980 witnessed increased government involvement in the activities of the cooperative movements, especially by way of providing funds and expertise in the running of the cooperative societies. As documented in the fourth National Development Plan, cooperative societies increased from about 6,000 to 11,264 during the period between 1975 and 1980, while the total membership of the movement increased from 450,000 to 918,149 (Asaolu, 2004). Cooperative societies feature in mostly all town and villages of the country. It is also present in almost all public and private institutions, organizations and businesses. A fundamental weakness noticeable in the Nigerian cooperative movement is the small size of cooperatives probably due to lack of public awareness about the vital roles which cooperative societies play in the development or oiling of the wheel of development of the SMEs. With a few notable exceptions, cooperative societies attracted little research either descriptive in nature or empirically oriented towards issues that paralleled the type of work provided in other financial institutions. On the latter note, for example, Cargil (2007) surveyed empirically-based literature and reported how it “indicate(s) quite clearly that cooperative societies are more similar to, than different from, the large financial institutions”.

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