EVALUATING THE CONTRIBUTIONS OF SMALL AND MEDIUM ENTERPRISES EQUITY INVESTMENT SCHEME (SMEEIS) TO NIGERIAN ECONOMIC GROWTH IN THE MANUFACTURING SECTOR
ABSTRACT
This study examined the contributions of Small and medium enterprises equity investment scheme to Nigerian economic growth in the perspective of the manufacturing sector in Nigeria SMEEIS. A perfect research into the role of SMEEIS in the manufacturing sector cannot be carried out without an in-depth analysis, contributions roles and operations of SME . This study became necessary to the Nigerian Entrepreneurs, who have assisted and contributed to the country’s gross national product and have also played vital roles in the lives of the people. The Nigeria economy cannot be driven by the government and public sector alone hence the need for SMEEIS. The initiative was in response to the Federal Government’s concerns and policy measures for the promotion of Small and Medium Enterprises (SMEs) as vehicles for rapid industrialization, sustainable economic development, poverty alleviation and employment generation. SMEEIS is a voluntary initiative of the bankers committee approved at its 245th meeting held on 1st December, 1999. SMEEIS is acronym for the small and medium enterprises equity investment scheme”, which requires all banks in Nigeria to set aside annually ten percent (10%) of their profit before tax for equity investment and promotion of small and medium enterprises in Nigeria. The objective of the study was to determine the role of small and medium enterprises equity investment scheme in the manufacturing sector and to ascertain the contribution of SMEEIS in manufacturing sector. The study used both primary and secondary sources of data collection. The statistical tools used were frequency distribution, tables, percentages and chi-square (c2) in the analysis of data. Test of hypotheses shows That the weaknesses and threats of SMEEIS are not greater than the strengths and opportunities; that SMEEIS has been able to contribute meaningful to manufacturing sector; That SMEEIS does not lack the skill to manage organizational changes that SMEEIS does not hinder creativity and innovation. The study shows that lack critical infrastructure affected the smooth running and operations of SMEEIS, The research made the following recommendations. The CBN should review its policies on SMEEIS by liaising with the National Assembly to put in place a very good legislation to support and sustain SMEEIS. For SMEEIS to be a driving force in the Nigeria economy, critical infrastructure such as good access roads, energy and good telecommunication network must be in place. Moreover, the CBN should also support the banks by putting in place a standardised policy framework on its intervention fund on bailout, restructure and refinancing of SME especially in the manufacturing sector through the use of banks of industries and AMCON to purchase ailing credits that are given to the manufacturing sector from banks at a concessionary rate.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Small and Medium Enterprises Equity Investment Scheme (SMEEIS) is an initiative of the bankers’ committee comprising Managing Directors and Chief Executives of Banking Institutions in Nigeria, and it requires all licensed banks in the country to set aside 10% of their Profit Before Tax (PBT) annually for Small and Medium Enterprises
The core thinking behind the scheme is the recognition of the need to assist the manufacturing sector, which is acknowledged as the veritable vehicle for economic growth by meeting their financial requirements through private equity participation. According to Ademola (2010), “despite the widely acknowledged role of small and medium scale enterprises in fostering economic growth and development, they have continued to face a variety of constraints”. some of the challenges they face are inadequate infrastructural facilities, shortage of skilled manpower, high rate of enterprise mortality, low level of entrepreneurial skills, lack of conducive operating environment, restricted market access and cumbersome regulatory requirements for those that are quoted on the Nigerian Stock Exchange.
