Why Small Scale Businesses Failed as a Remedy to unemployment problem in Nigeria

Abstract

SME or small scale business is described as the engine for rapid growth due to its numerous benefits such as employment generation and contribution to the GDP. In Nigeria, SMEs defined as any enterprise with a maximum assets of N500 million ($4.2 million) excluding land and working capital with the number of staff not less than 10 or more than 300 (IFC, 2001). Some 98% of businesses in Nigeria are small- medium – size enterprise. SMEs are the engines of economic growth worldwide. The impact of SMEs on the economy cannot be underestimated, SMEs generate employment, promote the use of local raw materials that require simple technology, promotes innovation and technology development. Promotes intermediate goods for longer firms and job creation, poverty reduction, wealth creation, income distribution and reduction in income disparities (Aremu 2011) Sadly, this sector with all the benefits is faced with numerous and endless challenges such as poor management practices, lack of information and knowledge of the market, high cost of over head, infrastructural inadequacy etc. For the purpose of this study, we summarized the challenges facing SMEs into ten; we do not intend to conclusive say they are limited to ten, but just trying to educate, sensitize and encourage SMEs operators to discover various problems facing businesses.