THE EFFECT OF FINANCIAL CRIMES ON THE GROWTH OF SMALL AND MEDIUM SCALE BUSINESS

Abstract

Small and Medium Scale business has been identified as the one big sector that has contributed and will continue to contribute to the growth and development of the country. SMEs has employed a great number of people thereby reducing poverty and unemployment in the country. Nevertheless, with so many legacies laid by SMEs, it has continue to experience financial crimes in business. Financial crimes on its own has negatively affected the growth of SMEs. This impediment needs to be addressed as the effect is both economic, social and financial. This study was undertaken in this respect to examine the effects of financial crimes on the growth of SMEs. The study employed the descriptive survey method and tested the hypotheses using chi-square statistical tool using the SPSS.

 

 

 

 

 

 

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgment

Abstract

Table of content

CHAPTER ONE

1.0   INTRODUCTION

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study

CHAPETR TWO

2.0   LITERATURE REVIEW

CHAPETR THREE

3.0        Research methodology

3.1        sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1    Introductions

4.2    Data analysis

CHAPTER FIVE

5.1    Introduction

5.2    Summary

5.3    Conclusion

5.4    Recommendation

Appendix

 

 

 

 

 

 

 

 

 

 

 

 

Chapter One

Introduction

1.1   Background of the Study

Financial crimes have been the order of the day for quite a long time especially in our society today. This phenomenon ranges from various dimensions, such as Bank fraud, embezzlement of public funds, money laundering, credit cards fraud etc. It can be described as a conscious premeditated action of a person or group of persons with the intention of altering the truth, or facts for selfish personal monetary gain.

This has been a general decease in the whole wide world and the Nigerian society has not seen spared either.

The powerful effect of crimes has on the global market has now become a source of great concern to future reasoning stakeholders profitable firms are closing businesses and innocent members of the society not guilty of a financial crime are groan with pain under the weight of a heavy debt burden and a not hopeful future. Surprisingly, after the attack in the United States trading centre on September 11, several financial irregularities were uncovered in some major business empires with devastating effects on the global financial market or businesses.

Agbuba and Egbunike (2003:14) “At the sixth regional workshop on money laundry and financial crimes organized by West African Institute for Financial and Economic Management (WAIFEM) in Lagos, its Director General Chris Itsedo disclosed that an estimated $10 billion (N1.28 trillion) was lost yearly in the ECOWAS sub region through money laundering activities lone.

In the same vain the newly introduced ATM card is not helping situation is easily accessible to these advance fraudsters. Due to no adequate security measure which wrongly place in the system. It is becoming very clear that financial crimes exist in our society. If not worse, it is saddening to learn that various forms of crimes or criminalities have eaten so deep into the structure of our financial institutions. This singular activities has caused a great damage in our Economy such as loss of jobs, loss of investors, loss of confidence in the financial institutions, youth no longer interested in learning or reading due to they are thinking on how to defraud and become rich overnight such as some youth in Edo State today that took over leadership from elders of their time and engage on selling lands and buying cars forgetting the future of the yet on born child. These now serve as means of escape of huge sums of money from our developing economy etc. To eradicate this phenomenon becomes difficult due to top government functionaries and unscrupulous politicians and other high place individual citizens both here at home and abroad engage in these activities that made transparency international in several occasion ranked Nigeria as one of the most corrupt Nation on the planet.

Ranging from stealing public funds through non-completion of projects and some other cases work will be contracted on paper (faceless site) awarded on political basis not even executed they will share the money among themselves and possibly kill anybody that come across their way.

The economy is suffering its own share of decay gradually, as a result of this sucking/outflow, which move often than not the funds are taken abroad. Million staffs of our Nation have been thrown into the labour market and many investors in our economy, have been thrown into panic as they watch their hard earned money go down the drain. The investors are now doubting the financial transparency of our financial institutions and the economy at large.

Technology of today and vast internet connectivity with just the process of pressing a button transfer millions of dollars into strange accounts. These stolen millions instead further help to endanger the life of our people. These unscrupulous individuals become highly connected, fraudulently purchase arms, cars and drove authoritatively unchallenged, kill and go away with.

1.2          STATEMENT OF THE PROBLEM   

To be kindly finance is so important, if not the most important in all aspect of any economy. On the other hand, crime is an unwanted aspect of our societies to growth. Financial crimes could therefore be likened to bringing together the two extremes of our economy. The degree to which financial crimes occur in any society would affect the level of economic activities, which are carried out. Growth of Small and Medium Enterprises in Nigeria will mean a growth in the development of the country. But when the channel of growth is stunted or distorted, it will also affect the economy. If the small and medium enterprises in the country enjoy steady growth, the country will see progress in the level of GDP, level of employment, tax rates remittances and good standard of living. Socially it will improve the status of the country. It is on this premise that this study is undertaken to examine the effects of financial crimes on the growth of Small and Medium Scale Businesses.

1.3   OBJECTIVES OF THE STUDY 

The sole aims of this research work is to examine the effects of the financial crimes on the growth of small/medium scale business. A study of selected transport companies in Edo State:

1. To identify the effect occurrence of financial crimes on transport companies in Edo State and its effect on the Economy growth of the state.
2. To determine the government responsibilities, involvement to enhance development structure in that sector.

1.4   RESEARCH HYPOTHESIS

Hypothesis is a tentative answer to a research question. It is often stated in the form of a relationship between a dependent variable and an independent variable (Yomere 1999) Topics of this nature are continuous, stating our hypothesis would give us an ending point.

The following hypotheses are formulated and are to be tested.

H0: There is a low rate of occurrence of financial crimes in Nigeria SMEs.

H1: There is a high rate of financial crime occurrence in Nigeria SMEs

H₂0: There is no significant effect of financial crimes in SMEs on the Nigeria economy.

H₂1: There is a significant effect of financial crimes in SMEs on the Nigeria economy.

1.5   SIGNIFICANCE FOR THE STUDY   

The basis for this study of the effect of financial crimes on the growth of small/medium scale businesses. A study of selected transport companies in Edo state cannot be over emphasized. The study will deal with a problem which much study has not been given too much attention. Otherwise making it new in nature. This research arms to serve as a spring board for others, who chose to dig further into the areas of financial crimes affecting growth of small/medium scale businesses in transport sector in Edo State.

The study will as well serve as a base for putting into place various procedures and policies which will assist tame financial crimes and bring it to its conclusion end. These new orientation in nature would help to jump start our economy on this sector, re-introduce confidence and bring investors both local and international out of their hiding point.

 

1.6   SCOPE OF THE STUDY

This research work will concentrate on the effect of financial crime on the growth of small/medium scale businesses. A study of selected transport companies in Edo State.

1.7   LIMITATIONS

Being a relatively new area in nature where not much research has been done on the topic. I envisage this will place constraint as non-availability of important literature works and text. Due to the sensitive nature of the study of Economic development this would place a constraint to the method of analysis available for this study. High cost of sourcing for materials and time in which this study most be completed, as I am a student that is supposing oneself with little income. Despite these shortcomings, this research will aim to vigorously carry out a comprehensive analysis and empirical job on this study.

1.8   Organization of the Study

The study is divided into five chapters. Chapter one deals with the study’s introduction and gives a background to the study. Chapter two reviews related and relevant literature. The chapter three gives the research methodology while the chapter four gives the study’s analysis and interpretation of data. The study concludes with chapter five which deals on the summary, conclusion and recommendation.

 

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