THE IMPACT OF MICRO FINANCE ON ENTREPRENEURS PERFORMANCE

1.0 Introduction

Micro finance is a specialized functional field found under the general classification of business administration.

Finance as a term can be defined as the management of money especially money controlled by a government , company or large organization. (Randolph quirk 1995:518) Micro finance as a business discipline is different from both economics and accounting.

Accounting is concerned with the recording, reporting, measuring and keeping of data in an organization, activities, using a widely acceptable double entry book keeping system. The data may be historical as in the case of provision a year balance sheet, forecast of future operations as in the case of next year operating budget accounting system as in the to make decisions to help organization achieve their objectives.

The field of finance rest heavily on the works of economist and uses many economics tools. This begins with theories and assumption developed in micro-economics which are applied in an attempt to explain the working off modern business from financial analysts forecast for the industry and the overall economic activity in far way east, mainly, in the republic of chain a, Hong, Kong, Talwan and south Korea, micro finance are seen as new establishment in entrepreneur performance (small scale enterprises) whose annual turnover on the average does not exceed three million American dollars and the present capital invested in generally below are million American dollar.

In Nigeria, Imo State to be precise, the same trends is applicable but with compliance to Nigeria law of CAMA of 1990 where a small scale enterprises having its one million naira nair. It is also an enterprise having its annual turnover to less than a half a million that is N500,00 (the central bank credit any monetary guideline of 1980). It is a provide enterprise registered with the Nigeria co-operative affairs commission with a proposed authorized share capital of an amount not less than N10,000.

Generally, there is no universal definition of micro financing since there are usually money non instant factors and variable that affect it.

Micro finance can be defined according to the size of small scale business, as an amount of authorized share capital with which is firm is registered with volumes and financial stronger relative size, they of industry, capital employed or outlet.

1.1 Background Of The Study

Before the coming of British colonialism (the imposition of a more developed culture over a less developed ones) into the present day Nigeria, the entire territory of Nigeria economy art from agriculture, also practiced a variety of art in the form of stewardship. Stewardship micro financing, has its origin in the function which micro financing saved from the earliest times in the history financing society of providing the owners of wealth with a means of eye guarding it from then embezzlement.

These steward rendered an account periodically of his stewardship. Stewardship micro financing involved the orderly recording of business transaction, although accounting records of this type of data back to as early 4500 Bc the method of keeping until fairly recent time.

The main principels fo the Italian method during the period of time in Italy, between the 14th and 17th centuries, as it was there know were set out by “luca Pacioli in his farmers” treatise June a de arithmetical geometrical, proportioned that is, proportion and lita “which was published in Venice in 1594 (Glanter et al 1985:5) but in recent time, micro finance was newly introduced in china and other eastern countries like Hong kong Taiwan and South Korea. But Nigeria was considered to be face with the challenge and opportunity of creating a micro financing base that can guarantee self sustaining growth.

1.2 Statement Of The Problem

Micro finance is a new establishment to both small and medium scale enterprises in our this world.

Micro finance on both small and medium sized enterprises (SME’S) are important to economic growth and contributions significantly to economic development in both developed and developing countries. Many a times they are faced with series of problems some of which are.

1. Inadequate training:Meaning entrepreneurs lack training to prepare there own accounts.
2. Many SME’S lack skilled accounting or micro finance personnel and infrastrures to implement the existing accounting rules and regulations.
3. Many SME’S are not aware or not convinced of the usefulness of accounting for control and decision making purposes.
4. Many SME’S do not keep proper financial records and accounts
5. Many entrepreneurs do not have enough capital to start or increase their business.

1.3 Aim and Objectives Of The Study

The aim of the study is to examine the impact of micro finance on its entrepreneurs performance. In achieving this aim, the following specific objectives were laid out as follows:

1. To investigate some government policies that affect micro finance
2. Investigate the mdoes of finance of selected organizations.
3. To examine the problems facing the impacted micro finance in small scale enterprises.
4. To examine the micro finance process involved in small scale enterprises.
5. To identify possible solution to the financing problem faced by enterprises.

1.4 Research Questions

Micro finance is a new establishment to both small and medium scale enterprises in both developed an developing countries. For micro- finance to be effective and sufficient to an enterprises, the following questions should be asked,

• Is it possible to combine accounting /micro finance for internal and external uses?
• Would one micro finance system fit all enterprise?
• Should all enterprises use the same micro finance systems?

1.5 Significance Of The Study

Micro finance plays an important and active role in any small scale enterprises, particular in the developing countries (Aderson 1982:20) Micro finance are so vital in the performance of entrepreneurs if any of our economy could go on without their theories, principels and concept. They are well known for small scale enterprises, and are ready to take business risk by exploring new ideas or perceived favourable market opportunity. Micro finance tendency to conserve exchange, and also leads to the development of indigenous entrepreneurs skill. It can also serve as an insurance for industrial development. The benefit that most enterprises proides can only be reaped if the yare encourage to develop a proper micro finance interal control system.

Micro finance of small scale enterprise required financial attention in order to achieve the maximum benefit of SSE. Proper account must be kept in order to know the true state of affairs of the business at any point in time. It also shows whether there is surplus or deficiency which was accrual during a specified period. Therefore, it is of paramount impact to carry out thus research.

1.5 Scope Of The Study

The scope of this research is focused on the Impact of Micro Finance on Entrepreneurs Performance in Nigeria.

1.7 Limitation Of The Study

This study will be limited to the country world wide it will also focus on the development and growth of small scale industries in the world especially Nigeria as a country, from the period independence to the present day (that is between 1960-2011). It will also highlight government polices affecting industry, as well as problems and also account possible solution which will be to these problems.

1.8 Definition Of Terms

Finance:

This is the management of money especially money controlled by a government, company or large organization

SSE:

Small scale enterprise. They are business owned and financed by private individual whose annual turnover does not exceed N2million with net assess of not more than1million (CAMA0.

Asset:

This is an item which are owned and by small scale business

Book Keeping:

This is art of recording primarily business transaction in on orderly manner so that the time, results will be show at any point in time (B. N Okezie, financial accounting).

Ability:

This are what the company owes to outsides.

Trading Profie And Loss Account:

This is a financial statement which shows whether a firm is making profit or loss (income statement).

Capital:

These are items of value that are used but not owned by an enterprise (business finances. A.A Ojiuko)

Journal:

This is a form of diary for which transaction made on daily basis are recorded.

Accounting:

This is the recording, reporting, measuring and keeping of data in an orgnaizaiton, activities using a widely acceptable double entry book keeping system

1.9 Organization of Chapters

This study will be organized into three chapters. The first chapter will be introduction which will include the background of the study, statement of the problem, objectives of the study, research questions, significance off the study, limitation of the study and definition of terms.

Chapter two will be on literature review and it will cover the view of notable individuals and writers on the subject and also introduction.

Chapter three will be on research design and methodology, which will include introduction, population and sample size sample technique, validity and reliability of measuring instrument and method of data analysis.

Chapter four will be presentation and analysis of data which will include introduction, presentation of data, analysis of data, interpretation of result.

Chapter five is summary, conclusion and recommendation.

Then reference and appendix follows.