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EFFECT OF CORONA VIRUS COVID-19 ON SMALL AND MEDIUM SCALE ENTERPRISES
1.1 Background of the Study
Recently, many small and medium-sized enterprises (SMEs) have suffered dramatic losses due to the Corona Virus (Covid – 19) pandemic in the world as well as in Nigeria in particular. The Covid-19 pandemic triggered unparalleled chaos, damage and devastation to both the public and private sectors. The crisis is seen as an existential threat to the global economy, with governments and corporations struggling with the consequences. There has been increasing apprehension of the potential impact of the pandemic, particularly on small and medium-sized enterprises (SMEs). Although the health impact of the crisis is significant, the economic impacts are no less devastating, particularly for businesses (Falokun, 2020).
More than 1.3 million people worldwide have been infected by the novel Coronavirus or COVID-19. Probably for the first time in many decades, the world is experiencing a form of disease that does not discriminate on the basis of age, gender or even ethnicity. The virus originated in the Wuhan province of China and has since spread to all parts of the world (WHO, 2020). The disease has been described by health authorities as infectious and contagious. As a result, both the World Health Organization (WHO) and governments have urged their people to practice good hygiene by washing their hands with soap and running water or even alcohol-based hand sanitizers, by keeping their nose and mouth covered with a mask.
Small and medium-sized enterprises (SMEs) have remained a common expression in the business world, and thus hold a place of pride in virtually every country in the world economy. This is due to the significant position of small and medium-sized enterprises as the mainstay of economic activity in terms of jobs generation, national growth, poverty reduction and the economic development of global economies, including Nigeria. For cities and towns, these businesses employ a significant percentage of the population. According to Kadiri (2012) cited in Peterise (2003), over 60 per cent of the workforce in Nigeria were employed by SMEs in both the formal and informal sectors. Worse than that, 70 to 80 per cent of the country's everyday needs are not high-tech goods, but simple materials manufactured with little to no automation. Records have shown that small and medium-sized enterprises have provided a mechanism in many countries to promote private ownership and entrepreneurial skills, increase job opportunities per unit of capital invested, and help the growth of local technology (Sule, 1986; World Bank, 1995).
In support of the above view, Ajose (2010) argues that small and medium-sized enterprises are the center of economic development and the first point of touch for the business world, but Covid–19 has had a major effect on business operations. Small and medium-sized businesses help drive investment savings and encourage the use of local raw materials. We help to diversify economic development and make a major contribution to exports and trade. Small and medium-sized enterprises are also critical for poverty reduction, as they tend to employ poor and low-income employees and are often the source of jobs in rural areas and poor regions. In addition, by manufacturing intermediate goods for use in large enterprises, small and medium-sized enterprises are contributing to the strengthening of industrial relations. This explains the growing interest shown by developed countries in supporting small and medium-sized enterprises since the 1970s (Ekpenyong and Nyong, 1992). According to Bonga (2010), many economies have lagged behind in promoting small and medium-sized enterprises and missed the benefits they bring to a nation due to Covid-19.
1.2 Statement of the Problem
The Covid–19 pandemic created crucial challenges for small and medium-sized enterprises (SMEs) in Nigeria, forcing many to change their attention from daily operations to crisis management and alternative business response efforts. The effect is already visible in the areas of sales/services, initiatives to minimize adverse effects, prospects, threats, support measures and company survival prospects (Falokun, 2020). In addition, too many small and medium-sized businesses have finished their programs due to Covid 's 19 pandemic.
1.3 Objective of the Study
To examine the effect of corona virus covid-19 on the sales volume of small on small and medium scale enterprises
To examine the effect of corona virus covid-19 on the profit margin of small on small and medium scale enterprises
To examine the effect of corona virus covid-19 on the output of small on small and medium scale enterprises
1.4 Research Questions
v What is the effect of corona virus covid-19 on the sales volume of small on small and medium scale enterprises
v What is the effect of corona virus covid-19 on the profit margin of small on small and medium scale enterprises
v What is the effect of corona virus covid-19 on the output of small on small and medium scale enterprises
v There is no effect of corona virus covid-19 on the sales volume of small on small and medium scale enterprises
v There is no effect of corona virus covid-19 on the profit margin of small on small and medium scale enterprises
v There is no effect of corona virus covid-19 on the output of small on small and medium scale enterprises
1.6 Significance of the Study
The significance of this study can be viewed from the following perspectives.
One main significance of this study is that when completed, it would serve as a bridge for the gap that have been created between where previous works on this subject area stopped and today.
This study is significant in the sense that it’s finding would serve as a base and framework for future researchers to carry out further studies in the field of knowledge under study.
The work understudy would aid scholars and government at different levels and their agencies and non-governmental organizations in their involvement and decisions on small scale businesses and entrepreneurship development programmes and related issues during post-covid-19.
Owners of small enterprises will find the findings from this study useful for effective management of SMEs. This study will provide information for the understanding the potential threat of covid-19 on business operators.
The significance of this study would include all those who would benefit from and use the information from the study like researchers or students of organizational behaviour, performance management, productivity, human resources and business administration.
1.7 Delimitation of the Study
The study was delimited to the effect of corona virus covid-19 on small on small and medium scale enterprises in Obio Okpor local government area of Rivers State
1.8 Limitation of the Study
The limitation of this study was inability of management to divulge certain information which they consider sensitive and fear of publication which might be detrimental to their operation.
Also, the outright inability of some respondents to complete and return the questionnaire to the researcher is one of the limitations of the study. Another limitation to the study was traffic congestion for the researcher to meet them in their offices and for possible return of the questionnaire. www.projectsxtra.com
Finally, the researcher observed the non-cooperative attitude of some workers of the company to make information available for her.