HOW TO MANAGE SMALL SCALE BUSINESS IN NIGERIA EFFECTIVELY THE VALUE OF EFFECTIVE CREDIT MANAGEMENT
TO SMALL SCALE BUSINESS IN NIGERIA
Management of small business is as complex as the big one. Account receivables are important assets and valuable part of the working capital. Effective management of this component is very crucial to any type of business for its survival and for ensuring its growth. Effective credit administration will not only ensure continuity but can make small business to become big. Problems in credit management has been a cause of failure to many businesses most especially small ones which are more vulnerable. This paper will try to highlight the value of good administration of credit to the small business. It is an important component of working capital. The paper is looking at the meaning of small business and the nature of credit in general. SMALL SCALE BUSINESS
There is no universal accepted definition of small scale business. Several definitions were presented by the various agencies but each is based on its own perspective or point of view. Whatever the case the adjective, small provide a yardstick and a pointer that the business is small in nature. Small is different from large. The Central Bank of Nigeria addresses the small scale business from assessing its annual turnover while the Federal ministry of commerce and industry looks at the total investment or working capital to classify size of business. The United Nations Industrial Development Organization(UNIDO) is more concerned on the number of employees a business has, to determined its size. It is a micro firm, small firm, medium firm or large firm. Defining small scale business is necessarily arbitrary because people adapt particular standard for particular purpose [Longeneder, Moore and petty (1997) ]. The Small and Medium Industries and Equity Investment Scheme defines Small and Medium Enterprises as any Enterprises with a maximum asset base of (#200,000,000) Two hundred million naira excluding land and working capital and the number of employees from 100-300 Hussain (2009). ORIGINS OF SMALL SCALE BUSINESS IN NIGERIA
Small scale business have been with us since the beginning of human interaction in Nigeria, the people have been conducting business among themselves and with their neighbors since the ancient times. The Portuguese and Spanish sailors have been trading with coastal people before colonization similarly in the North trade caravan carry goods to and from North Africa across the Sahara for centuries. In the heartland we have craftsmen , miners, fishermen, farmers, animal rearers an traditional Engineers. Nigerians engage in small business before the coming of Europeans by way of provision of goods and services in blacksmithing , carvings, leatherworks , barbers, canoe drivers , donkey transporters, dressmakers, food vendors, builders, dyers, etc. they used to group themselves under a chief or Sarki of the particular profession. With coming of modern machines , Western Education and the changes in needs and the raise of population, businesses changed. There is today mass production approach and new demands . Today we have small scale business such as soap making, pure water, yoghurt, provision store, furniture making, welding, blocks making, bakery, hairdressing, vulcanizing etc. THE IMPORTANCE OF SMALL SCALE BUSINESSES
1. They provide employment opportunities, generating more jobs for the masses 2. They help in developing indigenous management skills 3. They help in conserving foreign exchange by providing alternative locally manufactured goods. 4. They create products for export and foreign exchange earnings 5. They develop inputs for larger industries to use to further produce new products SOURCES OF FUND FOR SMALL SCALE BUSINESS
i. Self financing by use of owners capital...
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