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Evaluation Of Government Incentives Schemes Towards Small Scale

(A Case Study Of Some Selected Small Scales Firms In Enugu Metropoly)

5 Chapters
|
70 Pages
|
9,180 Words

The assessment of government incentive schemes aimed at bolstering small-scale enterprises encompasses a nuanced examination of their efficacy in fostering entrepreneurial growth, enhancing economic resilience, and addressing socio-economic disparities. These initiatives, tailored to incentivize innovation, investment, and market access for small businesses, play a crucial role in stimulating job creation, fostering local development, and catalyzing sustainable economic progress. Evaluating the impact of such schemes necessitates scrutinizing key metrics such as uptake rates, employment generation, revenue growth, and sectoral diversification, alongside qualitative indicators like entrepreneurial satisfaction and community empowerment. Additionally, the analysis must consider the adaptability of these incentives to dynamic market landscapes, their alignment with broader policy objectives, and their ability to mitigate barriers to entry and expansion faced by small-scale enterprises. By integrating comprehensive evaluations of government incentive schemes, policymakers can refine strategies to optimize support for small businesses, thereby driving inclusive economic development and fostering a thriving entrepreneurial ecosystem.

ABSTRACT

Small scale enterprises are expected to play a vital role towards the development of the economy due to closeness to the grassroots. But unfortunately they are unable to do this due to lack of fund. As a result of this, government came up with incentive schemes to assist them develop their business and the economy in general.
Therefore this project that is organized in five chapter this format discusses what promoted the researcher to carry out research on this topic, the aim of the project, the significance, scope, limitations and delimitation. Chapter two deals strictly on literature review, where the researcher criticized the works of the authorities in the field, find out where they conflict and where they are agree. Chapter three explains the research method adopted. It was in this chapter that we discuss where we source out data, this location and instrument for presentation and analysis.
Tables and percentages were used in data presentation while chi-square (X2) was used to analyse the data collected in chapter four.
Finally, chapter five discusses the conclusions and recommendations. However it was equally inferred in the work that further research is encouraged in this topic as the need to trigger off development by adequately findings the small scale enterprises necessarily name. I send my very sincere thanks across the space. May we remain blessed?

TABLE OF CONTENT

Title page
Approval Page
Dedication
Acknowledgement
Abstract
Table of content

CHAPTER ONE
1.0 Introduction
1.1 Background of the study
1.2 Statement of problem
1.3 Purpose of the study
1.4 Significance of the study
1.5 Research questions
1.6 Scale /Area study
1.7 Definition of terms

CHAPTER TWO
2.0 Literature Review
2.1 The role of small scale business enterprises
2.2 Advantages of small scale business enterprise
2.3 Problems of small business in Enugu state
2.4 Source of small scale Business finance
2.5 Government policies and incentives

CHAPTER THREE
3.0 Methodology
3.1 The design of the study
3.2 Population of study
3.3 Sample /sampling Technique
3.4 Instrument for data collection
3.5 Validity /Reliability of instrument
3.6 Method of data collection
3.7 Method of data Analysis/presentation

CHAPTER FOUR
Data presentation and analysis

CHAPTER FIVE
5.0 Summary and conclusion
5.1 Recommendations
5.2 Limitation of study
5.3 Suggestion /Area for further studies
Conclusion
Reference

CHAPTER ONE

INTRODUCTION
Background of study: Many economic analysts in Particular have described government incentive schemes towards small-scale business in Nigeria and Enugu metropolis as a well development especially in this period of low level of economic activity and slow rate of growth of the economy as well as its devastating effects on the demand for labour. Undoubtedly the slow rate of economic growth in the state explains why few job opportunities are available. In most parts of the world, the importance of small scale business enterprise is not over emphasized in the process of socio-economic development of the country. It has become sufficiently clear that large scale enterprises have not and cannot alone play the dynamic role that they are supposed to play in the rapid growth and development of the economy, and prominent among these rates is employment creation and technogical development. Therefore the need for small-scale enterprises which will supplement the effects of the large scale business. Small-scale are those business that required very little capital to set up and to produce goods that will carter for the needs of the growing population. It is in the light of importance of small-scale business in Enugu metropolis that government incentive scheme towards small-scale business will be appreciated.
Incentive in a literal sense implies that which has motivating influence and serving to incite actions. These incentive schemes instituted by government provide other non-financial and financial assistance in the form of loans at affordable interest rate and grants. It is in the light of the above that nation economic reconstruction fund (NERFUND) and Nigeria bank for commerce and industry (NBCI) and other development banks were created.
However, small-scale enterprises have been defined by various authors in various ways but OSA20 (1984) defined small-scale business as a productive enterprise which is owned, managed and controlled by one or two persons or family which influences the decision making and a well has undifferentiated organization structure but has a small share of the market with less than fifty (5)) employees. While central Bank of Nigeria annual report and statement of account (1975) defined small-scale business as those enterprises with annual turnover not exceeding N5,00,000.00
Statement of problem
In spite of the recognition of the role of small-scale enterprises in fortering economic development through the promotion of indigenous technology, employment generating activities and bordering the production base of the economy, the impact has not been given adequate recognition.
They have been restricted access to institutionalized credit
because banks see them as high risk ventures (Orji 1996) with the introduction of structural Adjustment programme (SAP) in 1986 and the inevitable devaluation of Naira, Many small-scale enterprises found it very difficult to cope with the attendant high production costs as a result of high cost of imported input and high interest rates. Therefore, to bridge this observed gap in gap in banks lending to small-scale enterprises, the Federal government set up the national Economic Reconstruction Fund (NERFUND in 1989 with aim of providing soft loans on medium and long term basis to small-scale enterprises wholly owned by Nigerians.
The question now is, can it be said that the scheme has made desired impact on the development of small-scale enterprises in Enugu state? Since there are agencies set up to prove incentives and grants to small-scale enterprises, therefore the researcher intend to find out why small-scale business does not thrive in Enugu state. Also to investigate whether the growth of the economic activity in the state where these agencies actually providing it only in paper work and not practically. These are some of the critical issues, which this research work intends to evaluate; hence the topic evaluation of government incentives schemes towards small-scale enterprises is given.

PURPOSE OF STUDY
The purpose of this research work is to evaluate government incentive scheme towards small-scale enterprises with firms in Enugu metropolis as a case study.
This work will also point out the problem encountered by the small-scale enterprises in an attempt to receive incentives or loans from banks and as well investigate whether the incentives when received are properly put to use or not. This also evaluates the role of small-scale enterprises towards the development of the state economy. Therefore the objectives of this work as pointed will be summarized thus:
To examine the problems encountered by small –scale enterprises in Enugu state in attempt to receive loans and incentives.
To determine whether incentives, grants or loans received are diverted or put to proper use.
To identify the government incentive scheme towards small-scale enterprises.
To evaluate the role of the small-scale enterprises towards the development of Enugu state economy.
To make recommendations on proper management of government incentives and small-scale industries.

SIGNIFICANCE OF STUDY
This research work, which aims at evaluating government incentive schemes towards small-scale enterprises in Enugu state when concluded, will be of great benefit to the folowing interest groups:
THE GOVERNEMNT: this work will be of great importance to the government of Enugu state. This is because government has the interest of their economy at heart and equally they are the people that set up this incentive scheme and as well finance them through subventions. Therefore they will be interested granted to the small-scale enterprises and as well will like to know whether all these incentive schemes were actually granted to the enterprises. Also they will want to know whether the small-scale enterprises actually contributed to the growth and development of the economy.
SMALL SCALE ENTERPRISES: this is another group that will be interested in this research work. This is because they are the firm we are evaluating the incentives given to them. Therefore, they will like to know how best to put to use the incentive received from government and as well know the best way to approach government in order to get more incentives from them and what the government expects from them when they receive such incentives.
RESEARCH STUDENTS: it will be of great importance to research scholars who may want to investigate or research further on this topic. It will serve as a source of reference to this researcher and will help the students to know where to locate data, source of data and how to present the research work. This implies that it will make further research very simple
GENERAL PUBLIC: this work will equally be of great interest to the general public because they will like to know how small-scale enterprises contribute to the growth and development of the economy, which affects them. They are potential investors who can be influenced into going into small-scale enterprises due to the incentives which government gives to help them growth.

RESEARCHER QUESTIONS
The research is translated into questions of which when
Answered will provide the detail solution to the problem of study. For this purpose of this research work, the following questions will be asked and answered.
What are the problems encountered by small-scale enterprises in an attempt to receive loans and incentives in Enugu state?
What are modalities of receiving grants and incentives by small-scale enterprises and are the grants put in to other uses?
Is the government incentives scheme set up to help small-scale enterprises?
What are the roles of small-scale enterprises towards the development of the state economy?

SCOPE/AREAS OF STUDY
This work is meant to cover the totality of the small-scale
enterprises in Nigeria, but due to the fact that small-scale enterprises are scattered all over the country thereby making it difficult within the time frame, the researcher therefore decided to limit the work to some selected small-scale enterprises within Enugu metropolis. The emphasis will be the modalities of receiving incentive grants and subventions from government incentives scheme and how the incentive were put to use towards the development of the state economy.

DEFINITION OF TERMS
INCENTIVE: this is defined as anything capable of motivating an individual or organization into greater performance.
SMALL SCALE ENTERPRISES: This is business that is produced in small-scale, owned, managed and controlled by one or two persons with staff strength less than 50 and control a small share of the market.
NERFUND: national Economy Reconstruction fund is one of the credit schemes that provide soft loans to small scale enterprises
CREDIT: These are loans given to individuals, organizations, on agreed terms which boast their working capital.

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Evaluation Of Government Incentives Schemes Towards Small Scale:

Evaluating government incentive schemes for small-scale businesses is essential for assessing their effectiveness in promoting economic growth, employment generation, and overall development. Such evaluations typically involve a thorough analysis of various aspects of these schemes, including their design, implementation, and impact. Here’s a structured approach to evaluating government incentives for small-scale businesses:

Program Design:
Objectives: Assess whether the program’s objectives align with the needs of small-scale businesses, such as job creation, innovation, or regional development.
Eligibility Criteria: Evaluate the eligibility requirements to ensure that the program targets the intended beneficiaries.
Incentive Mechanisms: Analyze the types of incentives provided, such as grants, tax breaks, or low-interest loans, and assess their appropriateness for small-scale businesses.
Application Process: Evaluate the ease of applying for incentives, including administrative requirements and paperwork.

Implementation:
Timeliness: Determine whether the program operates efficiently and delivers incentives in a timely manner.
Transparency: Assess the transparency of the selection process and whether it avoids favoritism or corruption.
Bureaucratic Hurdles: Identify any bureaucratic hurdles or red tape that may hinder small businesses’ access to incentives.
Outreach: Evaluate the effectiveness of outreach efforts to ensure that eligible businesses are aware of the program.

Impact Assessment:
Job Creation: Measure the program’s impact on employment, including the number of jobs created or preserved in small-scale businesses.
Economic Growth: Assess whether the program contributes to local or regional economic growth through increased sales, production, or exports.
Innovation and Competitiveness: Evaluate whether the incentives stimulate innovation, improve competitiveness, or upgrade technology in small-scale enterprises.
Sustainability: Analyze the long-term sustainability of businesses that receive incentives.

Cost-Benefit Analysis:
Cost-effectiveness: Compare the cost of implementing the program to the benefits it generates, such as increased tax revenue or reduced unemployment.
Return on Investment: Calculate the return on investment for government spending on incentives, considering both short-term and long-term impacts.

Equity and Targeting:
Social Equity: Examine whether the program promotes social equity by benefiting disadvantaged groups or marginalized communities.
Leakage and Misallocation: Identify any issues related to program leakage or misallocation of resources to ineligible businesses.

Feedback from Beneficiaries:
Surveying Beneficiaries: Gather feedback from small-scale businesses that have benefited from the incentives to understand their experiences and challenges.
Complaints and Grievance Mechanisms: Evaluate the effectiveness of complaint and grievance mechanisms to address issues and concerns raised by beneficiaries.

Monitoring and Evaluation Framework:
Data Collection: Ensure the availability of reliable data to track program performance over time.
Continuous Evaluation: Establish a framework for ongoing monitoring and evaluation to adapt the program as needed.

Policy Recommendations:
Based on the evaluation findings, provide recommendations for program improvement or adjustments to better serve the needs of small-scale businesses.

A comprehensive evaluation of government incentive schemes for small-scale businesses should involve multiple stakeholders, including government agencies, business associations, academic researchers, and the businesses themselves. Regular evaluations and adjustments to these programs can help maximize their positive impact on small-scale businesses and the broader economy.