INCOME, SAVINGS AND INVESTMENT PATTERNS OF SMALL-SCALE AGRO-BASED ENTREPRENEURS IN ANAMBRA STATE, NIGERIA

INCOME, SAVINGS AND INVESTMENT PATTERNS OF SMALL-SCALE AGRO-BASED ENTREPRENEURS IN ANAMBRA STATE, NIGERIA
 
ABSTRACT
The study examined income, savings and investment patterns of small-scale agro-based entrepreneurs in Anambra State. The study utilized primary data to achieve this objective. The data were collected through multi-stage random sampling technique from 160 respondents. These data were analyzed with descriptive statistics including 4-point Likert rating scale, and multiple regressions. Tests of significant effects and differences were carried out with t-test and analysis of variance (ANOVA) techniques. Research results indicated that the average age of the small-scale agro-based entrepreneurs were 40years, while majority (33.8%) of them fell within the age range of 31-40 years. Also, majority (57.5%) of the small-scale agro-based entrepreneurs were males, while 43.8% of them were married. Household size of six to ten persons was the highest at 41.3% with an average of 9 persons per household, while twenty five percent of the agro-based entrepreneurs had completed their primary school education. Furthermore, majority (26.9%) of the entrepreneurs were engaged in groundnut processing, while the average experience of the entrepreneurs was 9 years and majority (38.1%) of them had 6 – 10 years of experience. Further results showed that the average monthly income of the small-scale agro-based entrepreneurs was N12,031.25 while their average monthly savings was N4,550.00. Majority (58.3%) of the small-scale agro-based entrepreneurs saved with esusu. Further results showed that majority (46.3%) of the entrepreneurs invested within N21,000 – N30,000 in their businesses while 46.3% of them also sourced their investment capital through personal savings with only 2.5% of them receiving loans from bank to finance their investments. There were no significant (p>0.1) differences in investment pattern of the agro-based entrepreneurs across the agricultural zones. Furthermore, the results showed that the socio-economic characteristics were significant (p<0.1) in explaining the changes in income, savings and investment patterns of the agro-based entrepreneurs. Age, educational level, savings level, asset level and level of skill acquired were positive and significant (p<0.05) in affecting the income pattern of the agro-based entrepreneurs. Also, the savings level of the entrepreneurs were positively and significantly (p<0.01) affected by their income and asset levels, and level of skill acquired, while the effects of household size and educational level were negative and significant (p<0.05). Furthermore, educational level, level of skill acquired, savings level and amount of money borrowed by the entrepreneurs had positive and significant (p<0.05) relationship with their investment pattern while the effects of household size and amount of interest paid on borrowed money were negative and significant (p<0.05). Further results showed that the challenges facing small-scale agro-industry were at an average of 2.85 on a 4-point Likert rating scale. These challenges included erratic power supply, lack of accessibility to their business areas, multiple government taxation and low patronage. The study recommended policies that will enhance the income, savings and investment levels of small-scale agro-based entrepreneurs in Anambra State.
 
 
                                                                  TABLE OF CONTENTS
Title Page                                                                                                                    i
Certification                                                                                                                ii
Dedication                                                                                                                  iii
Acknowledgement                                                                                                      iv
Abstract                                                                                                                      v
Table of Contents                                                                                                       vi
List of Tables                                                                                                              x
List of Figures                                                                                                             xi
Chapter One:                                     Introduction
1.1       Background of the Study                                                                               1
1.2       Problem Statement                                                                                          4
1.3       Objectives of the Study                                                          6
1.4       Hypotheses of the Study                                                                    7
1.5       Justification of the Study                                                                                7
Chapter Two:                                    Review of Related Literature
2.1       Concept of Small-Scale Agro Based Entrepreneurs                                       9
2.1.1    Meaning of Small Scale Industries/Enterprises                                              11
2.1.2    Roles of Small-Scale Agro-Based Entrepreneurs
in Economic Development                                                                              12
2.2       Socio-Economic Characteristics of Small-Scale Agro-Based Entrepreneurs 13
2.2.1    Gender of Small-Scale Agro-Based Entrepreneurs                                        14
2.2.2    Age of Small-Scale Agro-Based Entrepreneurs                                            14
2.2.3    Education Level of Small-Scale Agro-Based Entrepreneurs                          14
2.2.4    Marital Status of Small-Scale Agro-Based Entrepreneurs                              15
2.2.5    Occupational Categories of Small-Scale Agro-Based Entrepreneurs             15
2.2.5    Income Level of Small-Scale Agro-Based Entrepreneurs                              16
2.3       Sources of Capital/Funds for Investment by Small-Scale Agro-Based
Entrepreneurs                                                                                                  16
2.4       Patterns of Investment and Savings of Small-Scale Agro-Based Entrepreneurs18
2.4.1    Patterns of Investment of Small-Scale Agro-Based Entrepreneurs                18
2.4.2    Patterns of Savings of Small-Scale Agro-Based Entrepreneurs                     19
2.5       Factors Affecting Income, Savings and Investment Patterns of
Agro-Based Entrepreneurs                                                                             20
2.6       Factors Affecting the Income of Small-Scale Agro-Based Industry                         22
2.7       Theoretical Framework                                                                                   27
2.7.1    Life Cycle Hypothesis                                                                                                27
2.7.2    Permanent Income Hypothesis                                                                       28
2.7.3    Keynesian and Accelerator Theories                                                              30
2.8       Analytical Framework                                                                                    30
2.8.1    Likert Scale                 31
2.8.2    Multiple Regression                                                                            31
2.8.3    Analysis of Variance (ANOVA)                                                                    32
2.8.4    T- Test                                                                         32
Chapter Three:                                 Research Methodology
3.1       Area of Study                                                                                                 33
3.2       Sampling Technique                                                                                        34
3.3       Data Collection                                                                                               34
3.4       Analytical Technique                                                                                      35
Chapter Four:                                   Results and Discussions
4.1       Socio-Economic Characteristics of Small Scale Agro Based Entrepreneurs  39
4.1.1    Age of Small-Scale Agro-Based Entrepreneurs                                             39
4.1.2    Sex of Small-Scale Agro-Based Entrepreneurs                                              40
4.1.3    Marital Status of Small-Scale Agro-Based Entrepreneurs                              40
4.1.4    Household Size of Small-Scale Agro-Based Entrepreneurs                           41
4.1.5    Educational Level of Small-Scale Agro-Based Entrepreneurs                       42
4.1.6    Type of Agro-Based Activity Engaged by Small-Scale
Agro-Based Entrepreneurs                                                                             43
4.1.7    Nature of Business of Small-Scale Agro-Based Entrepreneurs                      44
4.1.8    Years of Experience of Small-Scale Agro-Based Entrepreneurs                    44
4.1.9    Possession of Requisite Skills by Small-Scale Agro-Based Entrepreneurs    45
4.2       Income and Savings Status and Patterns of Small-Scale
Agro-Based Entrepreneurs                                                                             46       
4.2.1    Income Status of Agro Based Entrepreneurs                                                 46
4.2.2    Income Sources of Small-Scale Agro-Based Entrepreneurs                           47
4.2.3    Savings Status of Small-Scale Agro-Based Entrepreneurs                             48
4.2.4    Savings Patterns of Small-Scale Agro-Based Entrepreneurs                          49
4.3       Investment Patterns of Small-Scale Agro-Based Entrepreneurs                    50
4.4       Sources of Capital for Investment by Small-Scale Agro-Based entrepreneurs51
4.4.1    Sources of Capital                                                                                           51
4.5       Factors Affecting Income, Savings and Investment Patterns of Small-Scale
Agro-Based Entrepreneurs in Anambra State                                                52
4.5.1    Factors Affecting Income Pattern of Small-Scale Agro-Based Entrepreneurs52
4.5.2    Factors Affecting Savings Pattern of Small-Scale Agro-Based Entrepreneurs54
4.5.3    Factors Affecting Investment Pattern of Small-Scale Agro-Based Entrepreneurs55
4.6       Factors Affecting the Income of Small-Scale Agro-Based Industry             57
Chapter Five:                                    Summary, Conclusion and Recommendations      
5.1       Summary                                                                                                         60
5.2       Conclusion                                                                                                      62
5.3       Recommendations                                                                                          63
References                                                                                                                 65       
Appendices                                                                                                                72