1.1  BACKGROUND TO THE STUDY

Small scale enterprise has potential for promoting the economy in a developing country like Nigeria.

Thus, in the second development plan (1964-1974), both all the state and local government in Nigeria were to actually support and promote the development of the small scale enterprises.

Osoba (1985:4), cited that in 1946 marked the first ever plan had as one of the objectives and development in crafts and industries, this promotion and development of village crafts and industries and the industrial development of the products in Nigeria. In anticipation of the ‘’industrial development of the product of Nigeria and the ensuring marketing problem for the small scale enterprise products, the department of commerce and industry was established.

The first national development plan (1962-1968), provided Nigeria the first opportunity to transform the policy from on national economic development in which the key role of industrial sector and its development would have received the appropriate focus.

The federal government attempted in this period to provide an institutional, mainly financial, support for the small scale enterprises through the establishment of the federal loans board; because of the widely held belief that lack of capital (i.e. money) with which to establish new industries or operate old ones as a major constraints to the rapid growth of small scale enterprises in the pre 1960 decades the federal loans board failed to develop the small scale industries target because loan was granted on most cases on political rather than commercial consideration.

In the third (3rd) development plan (1975-1980), the government stated the main objective for the development of small scale enterprises as the creation of employment opportunities mobilization of local resources, mitigation of rural-urban migration and even distribution of industrial enterprises in different part of the local government area through the state and local government small scale industries credit scheme (SSICS).

There is no unique or universally accepted meaning or definition of small scale business. The definition varies from one country to another depending on their level of development. This definition equally varies from industry to industry. Varying views point of bodies that have to do with small business also influence the definition.

According to the small scale business act 1963, (America) provides that a small business concern is ‘’one which is in dependently owned and operated not dominant in its field of operation’’. The act also authorized the small scale business administration in marking a more detailed definition to use such criteria as number of employees and sales volume.

Retailing and services $1 million or less annual sales.

Manufacturing 250 or fewer employees whole saling-$5 million or less annual sales. The bank in its guiding of 1985/90 say that for any firm t be known as small scales industry that such firms should have capital assets which do not less N750,000 including working capital but excluding the cost of the land.

The industrial research unit of the university of Ife (now Obafemi Awolowo University) defined small scales industry as ‘’one whose total assets in capital equipment, plant and working capital are less than N250,000 and employing fewer than 50 full time workers.

The 3rd national development plan 1975-1980 defines small scale business as manufacturing establishment employing less than 10 people or whose investment in machinery and employment do not exceed N600,000.

In Nigeria, the Federal Ministry of Commerce and Industry has defined small business to mean such business employing 1-50 persons and with total cost of investment not exceeding N750,000 in capital input of not more than N300,000 in machinery and equipment.

According to the Federal Ministry of Commerce and Industries, guidance to Nigeria bank for the commerce and industries NISC in (1981/82) for he purpose of revolving loan scheme for the small scale enterprises such enterprises are required as those costing not more than N500,000.00 including the cost of the land but excluding working capital.

1.2  STATEMENT OF THE PROBLEMS

Nigeria possess a weak indigenous technological base and that weakness rendered in its relation with other technologically advanced countries of the world, very few of the entrepreneurship had any formal education or either have not been to school at all or dropped out after primary school level. Most of them have no knowledge of assessing marketing condition and formulate company’s policies.

A greater percentage of the industries are also entrepreneur with a fee percent in partnership, co-operative and registered companies the failure to achieve meaningful technological development through adaptation has been attributed to a large numbers of factors: failure of relevant institutions within which technologies could be received and adopted i.e. lack of technological culture. Low technology predominated to concentrates on the manufactured consumption of goods such as food beverages and tobacco etc.

Furthermore, the colonial educational policy and the gradual process of grooming the elite in western values created a dependent psyche that nourished the perverse consumption pattern that is present within us. They were mainly or wholly owned subsidiaries to multi-national sector.

Investment opportunities in Nigeria have been lopsided with more foreign participation in pursuing economic developments there is the problem of synchronizing in fact, small scales enterprises concerned has suffered a great deal.

1.3  PURPOSE OF THE STUDY

Generally, the study attempts to investigate the role of small scale enterprises in the socio-economic development of the rural areas in Mupa Muro local government area of Kogi State.

Specifically, this study is indented to:

1. Find out the problems being encountered in the development of small scale enterprises in the local government area

2. Identify the contributions of the small scale enterprises to the local government area and to the Nigeria economy

3. Reviewing the effects of government polices/ programmers and other activities of government to the private sector with policies aimed at alleviating the problem

4. The realization by government due to the poor state of the economy in the recent years has cumulated in substantial rendition in foreign exchange earning to review their development strategy. This has brought the importance of small scale enterprises into focus of the economy.