By Maria Famakinwa
Growing a small business in the country has remained a challenge to many due to poor economy. Small scale industries could be said to be as old as man. They are the earliest form of businesses that the early men used to meet their needs .
Despite the fact that small scale business supports the Nigerian economy by providing employment to most of its citizens, some of these businesses fail within the first five years of their establishment, not leaving but the agencies established by the Nigeria government .
Some business experts who spoke with The Hope blamed the challenge of small scale business on insufficient fund, tax policy, security, lack of access to loan, poor infrastructure among others. Most of them advised that in growing an economy, small scale businesses are important components that should not be neglected.
In the submission of an Akure based economist, Mrs Ibukun Olawale who explained that small scale industries still form a dominant part of business enterprises particularly in developing nations which includes Nigeria, appealed to the Federal and State Governments to do everything possible to encourage the growth of the business in the country by making access to fund available to people.
“Small scale industries cannot survive without access to funds. Currently, the lending rate is high which is not realistic for sustainable businesses and could discourage borrowing. Many owners of small business who want to get loan in the banks are often discouraged due high interest rate. I think there should be programmes where entrepreneurs should be given seed capital in order to grow their businesses. Loans should be accessible with little interest. This will help to increase their operations, expand their businesses, purchase raw materials, hire more labour and meet demand thus stimulating economic growth.”
A civil servant, who is also a businessman opined that for any small scale business to grow, there must be provision of basic infrastructure such as regular electricity, water, good roads among others. “In Nigeria presently, the demand for electricity is high compared to supply and this is affecting many businessmen and discouraging others who have good business ideas from venturing into business.
” I am a civil servant who is also into frozen food business which I started before being employed as a government worker, but now I am thinking of closing the business because I am making nothing from it I spend more on fuel to power my generator in order to preserve what I kept in the freezer from getting spoiled aside paying for the rentage of the shop. The same goes for others in this business. No nation can undermine the importance of regular electricity in sustaining small scale industries.
“Many who should have embraced small scale business are discouraged because of government inability to play their own part in ensuring the growth of such business. Most times, government advice the citizens to start up a business instead of searching for white collar job without infrastructure. Everyone knows that for any country to survive economic crisis, electricity must be regular because most businesses need regular power supply to survive. We are appealing to government to give electricity the needed attention so that businesses in the country including small scale industries can grow.”
Sharing similar sentiment, a self employed, Mr Ope Adesola said that small scale industries in the country are dying due to government tax policy. “Taxes imposed by the government have an effect on small business. If taxes are high, there will be a reduction in profit which may also lead to low earnings and to the long run affect the growth of the business.”
While urging the government to reduce tax generally, he added that small scale businesses contribute more to the growth of the economy and observed further that depriving the business to grow will lead to huge rural -urban migration because people will be going to cities in search of unavailable greener pastures. “Small businesses have proven to cover the unemployment gap in the past, in this period of economic challenges confronting the country, it will be advisable if the apex bank and the three tiers of government invest more in small businesses through provision of financial assistance.”
Another factor preventing small scale industries from growing according to Adesola is insecurity. He noted that no business can grow effectively in an insecure environment and appealed to the Federal Government to do more in addressing the issue of insecurity across the country and ensure that there is an enabling environment for business to thrive. “This will also help to bring foreign investors into the country and will create employment for job seekers.”
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