ASSESSMENT OF SOCIAL CAPITAL ON PERFORMANCE OF MICRO AND SMALL SCALE ENTERPRISES IN AKURE METROPOLIS, ONDO STATE

Abstract

Social capital has become a pivotal tool for poverty alleviation in Nigeria, which is due to the fact that it is the coming together of people with common interest, values, norms, cultural practices and with a goal to meet certain basic needs, enjoy inherent benefits in participating or joining associations to achieve pre-determined goals and objectives which in turn is expected to improve the living standard of individuals, enterprises, and the economy in general. The study revealed a relationship between social capital and performance of micro and small enterprises in Akure metropolis, Ondo state. This study used primary data to collect information from the respondents. Multi-stage sampling technique was used in selecting 201 micro and small scale entrepreneurs from six male and female dominated enterprises (barbing, printing press, mechanics, catering, hairdressing, tailoring) and the data were collected through structured questionnaire. The profitability ratio analyzed used descriptive statistics (mean, frequencies and percentage), z-test, and multiple linear regression analysis. The result of the descriptive characteristics revealed that respondents were in one association or the other which include: occupational groups (39.22%), cooperative society (28.45%), trader association (13.79%), religious group (6.89%) and family group (7.76%). In the same vein, the social capital profile of both male and female entrepreneurs were, meeting index (100%, 96%), homogeneity index (39.26%, 44.77%), membership index (36.74%, 43.36%), labour index (25.18%, 29.38%) and trust index (24.70%, 24.70%) respectively. The study further revealed that in terms of performance of micro and small entrepreneurs, profit made by entrepreneurs in social group was estimated at N53618 and profit of entrepreneurs who did not belong to social group had N58530 averagely in a month, but when disaggregated by gender thus, showed that female members in association were not cognizance enough of the benefits of their social capital status. The profit (N59472) of male entrepreneurs was higher than that of their female counterparts (N.52146) and those who did not participate in any group. The result of the z-test buttresses that, the average profit made by male entrepreneurs was higher than that of the female entrepreneurs, hence the null hypothesis one was rejected. Furthermore, the result of the multiple linear regression revealed that, male dominated enterprises, significantly influenced performance. These variables include membership index, homogeneity index and trust index with coefficient value of 0.07191, 0.07541, and 0.05183 respectively at p< 0.05. Also under female dominated enterprises, only labour contribution index statistically influenced performance at a coefficient of 0.06440. Also null hypothesis two was rejected, therefore, the study concluded that social capital had positive effect on the performance of micro and small enterprises among male and female entrepreneurs in Akure metropolis. Hence, the study recommend that, micro and small entrepreneurs in the study area should ensure that they are socially connected and strongly associated by their groups, as there is need to ensure positive relationship, togetherness and commitment in achieving their goals set up by the groups.