Savings Behavior among Small Scale Business Owners in Nigeria (A Case Study of Enugu Metropolis)

Abstract

With economic recession affecting the Africas biggest economy Nigeria, owing to the dwindling prices of crude oil which is the major source of foreign earnings for the economy, the only hope left to fast track the recovery of the Nigeria’s economy out of recession and create more jobs for the teaming populace becomes the small and medium scale enterprises. In doing this, there is need to describe the behavior of an average small business owner in Nigeria because a policy can be effected to influence the modus of these small businesses. Therefore, this study tried to describe the pattern of savings among small scale business owners in Nigeria, using Enugu metropolis as the case study. Enugu is the administrative headquarters of the South Eastern part of Nigeria; its inhabitants are majorly the Igbos, the most enterprising ethnic nationality in Nigeria. This study was also necessitated due to want of micro studies on savings behaviour of small business owners at state level in Nigeria. And it focused on small business owners’ savings by describing their pattern of savings. The study applied a descriptive research method to survey 200 randomly selected small business owners in the metropolis using a standardized questionnaire as the instrument for data collection. The result of the findings revealed that belonging to a microfinance group actually increases the rate of savings among the business owners. However, the motive of savings for most of the business owners is to acquire household appliances, not even for business growth. The study also discovered that the small scale business owners do not pay much attention to savings. Based on the findings, it is recommended among others that efforts should be made to re-orientate the business owners on the real motive of savings, that microfinance banks should try to reach out to the masses so as to attract much savings from them and that government need to do more to enlighten the citizens on the real motives of savings. It is expected that if these recommendations are taken into considerations, business owners will save more and invest more also.