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The level of labour force being consumed determines the progress of any given society. This is because it leads to a reduction in criminal acts and non-wastage of manpower, therefore, unemployment becomes a very crucial issue requiring great attention. In Nigeria, the story is the same, the establishment of small scale business is very vital for the solving of unemployment problem. This research work focuses on solving unemployment problem through the establishment of small scale industries. Small scale business requires little capital investment, yet it controls a fair share of the market. Awgu Local government was used as the study area, to examine how small scale business has alleviated the unemployment menace. Information for this research work was obtained through primary and secondary data. The sources of primary data were personal interviews, personal observation and questionnaire while secondary data was collected from Newspapers, journals and textbooks, tabular presentation, use of percentage to analyses the data obtained.











Title page                                                              ii

Approval page                                                        iii

Dedication                                                             iv

Acknowledgement                                                   v

Abstract                                                                vi

Table of content                                                     vii


  • Introduction and Background of the Study 1
  • Statement of the problem 5
  • Research question 6
  • Purpose of the study 7
  • Scope of the study 7
  • Research hypothesis 8
  • Significance of the study 9
  • Limitation of the study 10
  • Definition of terms        11




  • Review of related literature 16
    • Conceptual Clarification                                   16
    • The role of small scale business in solving unemployment

problem                                                        25

  • Source of fund available to the small business man 29
  • Advantages of small scale business 31
  • Disadvantages of small scale business 34



  • Research Design and Methodology

3.1  Research Design                                              38

3.2  Method of Data Collection                                  38

3.3  Validity and Reliability of Instrument Used            39

3.4  Population                                                       40

3.5  Sample Procedure                                            41




  • Data Presentation and Analysis 43

4.1  Presentation and analysis of data                        43

4.2  Summary of results                                          62




  • Discussions, conclusions, and recommendations

5.1  Summary of Findings                                        65

5.2  Conclusions                                                    66

5.3  Recommendations                                           66

5.4  Implication(s) of the result findings.                    69

5.5  Suggestions for further research                         69









To adequately appreciate how unemployment could be solved through the establishment of small-scale businesses in Awgu Local Government Area of Enugu State, there arose the need for an attempt at defining unemployment as well as small-scale business both for the purpose of research.

Hornby (1974), in his revised and updated Oxford Advanced Dictionary of current English, defines this social evil, (unemployment) as the state of being unemployed and amount of unused labour. On the other hand, small-scale Business has been defined by Peter Ejiofor (2004), in his book Foundations of business Administration as those enterprises that have relatively little capital investment, that produce in small quantities and as a result control a small share of the market, that employ not more than fifty (50) workers in which management/marketing and entrepreneurial functions are vested in the proprietor.

However, Mr. Ejiofor P. (2004) sees small-scale business as a relative term because according to him, what may be regarded as a small-scale business can be large-scale to another. To him, the yardstick for measuring what constitutes a small-scale business will include the following:

  1. The size of the business: Since they are small in nature, most of them are usually small in size and occupies a small share of the market.
  2. Type of management: They are characterized by one man management, it is owner domination i.e. there is fusion of ownership and control. The owner manager participates actively in all levels of decision making and day to day management and operation of the firm.
  3. Information flow: These are sided, that is to say, from the owner to his workers. Feedback is not encouraged.
  4. Insufficient accounting records: They have little or no accounting records; consequently banking or credit facilities from financial institutions are hardly availed to it.
  5. Sole proprietorship: They are usually piloted by sole proprietors who hardly want to go into partnership with others.
  6. Cheap labour: Most of the owners employ apprentice whom they can pay at a cheaper rate.
  7. Small scale outlay: Due to its nature and size, they usually have small inventible capital to run the business.

Some examples of small-scale businesses are as follows: processing of agricultural produce like garri, yam flour, maize flour, palm oil, palm wire tapping, farm tools like hoes, matchets and knives, production of cooking utensils like pots, kettles etc. wood carving, carpentry weaving, electronics photographic works etc.

According to Yakassi (2000), over the years, there has been controversy over the definition of small scale industry, which has lead to the following diverse definitions.

The Federal Ministry Of Industries defines small scale industry as a manufacturing processing or service enterprise whose capital investment does not exceed N250, 000 on machinery and equipment only.

The central Bank of Nigeria defines small-scale     industry as any industry “whose annual turnover doe not exceed N500, 000.00 for commercial banks or capital investment not exceeding N2 million and turnover up to N5 million for Merchant Banks.

The NERFUN (National Economic Reconstruction Fund) defines small scale business as any enterprise requiring not more than N5 million excluding land to start operations, whereas the medium scale enterprise is any business requiring between N5 Million and N10 million, also excluding land to start up.

The definition is to lay down the parameters under which an industrialist may take advantage of various incentives created by the government for the growth of the small scale industries, such incentives include the granting of loans, machinery, equipment and raw materials.

The importance of small scale industries to the survival of the nations economy can no longer be waived, therefore, the authorities should not relent on the efforts of making small scale industries assume their role in the economy.



In the present day Nigeria, the society has been afflicted with high level of unemployment problems. This accounts largely for the vices that have bedeviled the country today such as obtaining by false pretence or advanced fraud popularly known as “419”, burglary, robbery, bribery and corruption and other social ills. It is common knowledge that graduates produced by various institutions of higher learning and other highly skilled professionals hardly ever find suitable employment opportunities in Nigeria today. Youth corpers for instance on passing out roam the streets in futile efforts to secure employment.

This problem of unemployment without being address will cause a lot of damages to our country and recession to our economy.


  1. Has the establishment of small scale business helped in solving the unemployment problem in Awgu Local Government of Enugu State?
  2. Has the employment provision resulting from the establishment of small scale business actually affected the standard of living of people (Indigenes)?
  3. Has the establishment of small scale business succeeded in Combing out high level of social vices in Awgu Local Government?

The general objective/aim of this study is to identify some of the major small scale businesses in Awgu Local Government Area with a view to unveil how far, if at the setting up of these businesses has alleviated the unemployment problems of the study area. The available manpower for providing the required employment is also under study.



This research work is limited to Awgu Local Government Area of Enugu State and the unemployment level is also considered which the establishment of small scale businesses seriously eradicates.




With reference to the objectives of this study which is to identify some of the major small scale business in Awgu Local Government Area with a view to unveil how fare if at all the setting up of these businesses has alleviated the unemployment problems, the following hypothesis were formed.


H0:  Small scale industries have not helped in solving unemployment problems.


H0:  There has not been a remarkable growth in the development level occasioned by small scale business.


H0:  There has not been any reduction in crime rate as a result of the activities of small scale business.




This study investigates the impact of the establishment of small scale business on the unemployment status of the Nigerian economy and Awgu Local Government Area in particular. The establishment of small scale industries through the length and breadth of the country could pacify the hindering problem of finding places for our rural job seekers.

This research work tries to know whether or not the establishment of small scale business in the study area could decrease the unemployment problems of the study area.

In addition, it is aimed that this study will help to proffer solutions to the unemployment problems in Awgu Local Government Area of Enugu State in particular and the Nigerian society at large.

This study has a lot of significance in the sense that it represents a symbol of academic achievement as having contributed to the already record of research.

This study shall be useful to the colleagues of the researcher and the entire students in the field of the study in future especially student of Business Administration. The research shall be relevant in public administration as a whole, budget experts in various ministries and department in Awgu Local Government Area of Enugu State, at this will assist them in carrying out their budgeting duties. Also the beneficiaries are people leaving in Awgu Local Government Area as a whole.

Finally, the policy makers shall derive immense benefit from the study as it shall serve as a guide to them.



There were a lot of constraints in gathering information for this research work but the major constraints are as follows:

  • Time: In respect of the theoretical and practical work, the time allowed for this project was short. Besides, this was carried out with other academic assignments.
  • Finance And High Cost Of Transportation: Because of this problems posed by limited finance and increase in transport fare, it was not possible for me to visit many libraries, also to visit the local Government in question regularly for me to be able to carry out the needed research and self observation



The general aim of having these terms defined is to enable the reader to know the meanings of these words if by any means he/she do not know them before with regards to this research work, and a situation where the reader has not come across any of them before, it tends to be of immense help.

  1. Small Scale Business: oxford paper back dictionary (1979) defines it as an industry, which can be carried out in the home. In pre-colonial Nigeria, according to Ejifor P., it is a relative term, because what is regarded as small scale business by a person may mean large scale business to another.

The Nigerian Bank for commerce and Industries 9NBCI) for the purpose of its revolving loan scheme for small scale industries, defined it as those investing not more than N500, 000.00 (excluding the cost of land but including working capital).

Nevertheless, the Bank’s official definition since 1985 has been firms whose capital cost does not exceed N750, 000.00 (including working capital but excluding land).

  1. The Study Area: They are usually chosen for research (examination). Awgu Local Government Area is the study area with regards to this research and it is located at the Northern part of Enugu State in Nigeria. It was carved out along with others during the local government reforms of 1976. The study area falls within the tropical rain forest zone of North Africa. The natives engage mostly in farming for subsistence and most of them are petty traders and artisans.

Majority of them are business at Awgu which is the highest Market establishment in Awgu Local Government Area. The study area has fairly good network of roads and it comprises of eleven (1) towns, the people are endowed with rich culture and a mixture of Christianity and paganism is prevalent in the area. The indigenous language is Igbo. It was also observed that the population size is 312, 482 according (2006 census)

  1. Unemployment: The state of being unemployed, one who has no work to do regardless of his qualifications. Our graduates are good examples.
  2. Respondents: They are people who correspond with the filling of the researcher in obtaining his or her results, as regards his aims.
  3. Entrepreneurship: This is an individual who has the ability to see and evaluate business opportunities, gathering the necessary resources to take advantage of them and initiate appropriate action to ensure success. It is also can be defines as one who undertakes an enterprise e.g a contractor, an organizer of musicals and other entertainment.
  4. Vice: This is the immoral, wicked behaviour or criminal activities.
  5. Bedeviled: It is to cause continual trouble (vices) to our country.
  6. Data: These are facts given, from which others may be inferred, e.g data collected by a researcher for the research work.







Agbo G.O. (2006) “Small Scale Business Management”

Iyke Venture Production.


Broom L., (2004) “Small Business Management” Cincinnati

Ohio South Western Publishing Inc.



KLOH L. (2002) “Small Business Management” Belmont

California Waitswoth. Publishing Inc.


Hornby (1974) Revised Oxford Advanced Dictionary of

Current English.











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