STRATEGIES FOR ENHANCING/PROMOTING CAPITAL FORMATION AMONG SMALL SCALE ENTERPRISES IN NIGERIA

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STRATEGIES FOR ENHANCING/PROMOTING CAPITAL FORMATION AMONG SMALL SCALE ENTERPRISES IN NIGERIA {A CASE STUDY OF HERITAGE SUPERMARKET ENUGU}

 

ABSTRACT

In this project, the explanation of the strategies for enhancing/promoting capital formation among the small scale enterprises in Nigeria is made. The importance of this to the growth of small scale business in Nigeria is advanced. The general performances of small scale enterprises in the Country is X-rayed using Heritage supermarket, Enugu as a case study. The result of this X-ray is as follows:

i.          The net profit of Heritage Supermarket, Enugu is not big enough for the expansion of its operation rapidly.

ii.         There is a slow increase in the quantity of inventories in the store due to high cost and low profit.

iii.                In order to accumulate adequate capital for expansion, there must be compulsory saving by the supermarket and management.

CHAPTER ONE

1.0       BACKGROUND OF THE SUBJECT MATTER

            Robert H. Heywood, Bruce and Graham (1977) stated that capital is the money used to buy expensive price of heavy equipment such as bulldozer a sawmill or a tractor-trailer.

According to Abner, (1990) capital is the most important of all the factors of production. He noted that the more a country uses her capital, the higher the rate of industrialization and therefore, the rate of development. To him, the reason for this is because the developing countries have less of capital that they are still primary producers largely. He listed some of these developing countries and they include:-

1.         Ghana and other West African Countries

2.         Latin American Countries (e.g. Brazil)

3.         India

4.         North and Central African Countries

5.         Parkistan

6.         East and Sourthern African Countries (e.g. Kenya) F. C. Okechukwu (1999) as an accountant, sees capital as funds (usually in the form of assets) contributed by the owners of the business and any residual revenue after meeting expenses and outside interest. As a result, for a business that is starting owners to set up the business will be regarded as capital. In the course of his explanation; he mentioned that Pandey sees capital as the total funds invested in the business. He went further to say that Batty sees capital as the funds used in the business.

Barual (1998) reports that another of the growth of capital formation in West African is the inequitable distribution of income. He noted that they very rich people in West Africa tend to become richer while the poor masses become poorer. He further stated that about 10% of the population of West Africa Countries control about 66.7% of the income. Again, he stated that the few rich people of West African Countries heard their wealth, and impound what they can size, thereby invest less in long productive enterprises, there is AD sufficient capital to top the human (Labour) and natural (land) resources in West Africa.

 

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STRATEGIES FOR ENHANCING/PROMOTING CAPITAL FORMATION AMONG SMALL SCALE ENTERPRISES IN NIGERIA {A CASE STUDY OF HERITAGE SUPERMARKET ENUGU}

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