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.

TABLE OF CONTENTS

Chapter one

1.0              Introduction:  

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

Reference

CHAPTER TWO

2.0              Literature review

2.1       The origin of the subject area

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

2.5       Summary

2.6       Reference

Chapter three

3.0              Conclusion

3.1       Data presentation (high light OF THE STUDY)

3.2              Analysis of the data

3.3              Recommendation

3.4              Conclusion

Reference

Bibliography

 

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.

            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 Nigeria.

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.

1.3              THE IMPORTANCE OF STUDYING THE AREA

The purpose of this study are as follows:

1.         To discuss those problems that hinder capital formation by the small scale enterprises in Nigeria.

2.         To emphasize on the causes to these problems

3.         To suggest the strategies for promoting capital formation among the small scale enterprises in Nigeria.

1.4       DEFINITION OF IMPORTANT TERM

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 nation.

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