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
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
iii. In order to accumulate adequate capital for
expansion, there must be compulsory saving by the supermarket and management.
1.1 Background of the subject matter
1.2 Problems associated with the subject matter
1.3 The importance of studying the area
1.1 Definition of important term
2.0 Literature review
2.1 The origin of the subject
2.2 School of thought within the subject matter
2.3 The school of thought
Relevant to the subject matter
2.4 Different method of studying the problem
3.1 Data presentation (high
light OF THE STUDY)
3.2 Analysis of the data
BACKGROUND OF THE SUBJECT MATTER
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
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)
4. North and
Central African Countries
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
David Begg (2000) defined capital as the stock of produced goods that
contribute to the production of other goods and services.
He noted that industry and business organization need to increase their capital
stock- their machinery equipment, factory and office building. He also noted
that industry has to modernize, its capital equipment and the new growth
industries such as information technology need to invest for future production.
Royharrod, an English economist (1940) in his postwar theories on capital
emphasized on human capital. He defined human capital as the skill and
knowledge embodies in the minds and hands of the population. Increasing
education, training and experience allows workers to produce more output from
the same level of physical capital.
George, j. Stigler (1975) defined capital as anything (other than a free human
being) which yield valuable service over and appreciable period of time. He
believed that capital consists of all economic goods except people and
perishable such as hydroelectric dams etc. He also views capital as an
accumulated fund of general productive power, past income incorporated in
particular physical grams or particular forms which will yield money income in
the future as adding value of plants, land, houses and inventories to obtain
total wealth. Ewa Udu etal. (1989) “capital” is defined as a stock of physical
assets accumulated by society to facilitate the production of goods and
services. Any of wealth set aside for the production of further wealth is know
as capital. He pointed out that capital can take many from such as: fixed
capital (buildings, tools, plants and machinery) Circulating capital, sometimes
called “working capital”, comprise raw materials, cash-inland, funds obtained
through ordinary and preferential shares etc.
However, he stated the capital can be distinguished as real and money capital.
This includes fixed capital assets and cash-in hand respectively.
SCOPE OF STUDY
This is limited to the Heritage Supermarket Enugu.
SIGNIFICANCE OF THE STUDY
The findings and suggestions of this
study, if carried out will promote the growth of small scale enterprise in
1.2 PROBLEMS ASSOCIATED WITH THE SUBJECT MATTER
The growth of small-scale enterprise in Nigeria is being disturbed
by inadequate supply of capital and poor performance. In Nigeria, many
small-scale enterprises are bankrupt because of lack of capital, which implies
lack of irresistible funds for further growth of a business organization. These
problems helped the researcher to undertake this study.
IMPORTANCE OF STUDYING THE AREA
The purpose of this study are as follows:
To discuss those problems that hinder capital formation by the small scale
enterprises in Nigeria.
To emphasize on the causes to these problems
To suggest the strategies for promoting capital formation among the small scale
enterprises in Nigeria.
1.4 DEFINITION OF IMPORTANT
CAPITAL: Capital was state in this project refers as funds/wealth invested
for further production. It represents a stock of wealth which exists, at a
particular time, set aside for production and these stock of wealth includes
money, buildings, machines and stock of foods.
CAPITAL FORMATION:- Capital formation is used in this project refers as the act
of increasing the capital, stock or capital base of a company, a firm or a
TERMS AND CONDITIONS APPLY
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