PROFITABILITY OF SMALL AND MEDIUM SCALE FURA ENTERPRISES IN ALEIRO AND JEGA LOCAL GOVERNMENT AREAS OF KEBBI STATE, NIGERIA

Abstract

ABSTRACT This study was analyzes profitability of small and medium scale agribusiness enterprises (a case study of fura enterprises in aleiro and jega local government areas of kebbi state, Nigeria). The methods of proportionate sampling, followed by purposive sampling techniques were adopted in selecting the Local Government Areas. Data were collected with the use of questionnaire administered on 66 small and medium scale fura enterprises (60 small scales and 6 medium scales). The data collected were analyzed using frequency distributions, percentages, gross margin, net farm income model, gini coefficient and Cobb Douglas functional form of multiple regression models. Results obtained indicate that the net income generated by small and medium scale fura enterprises was ₦436, 540 and ₦42, 434, 094.50 respectively. The results of the regression analyses showed that variables; age, processing experience, economic status and source of finance were found to be significant factors that determine the level of profit by small and medium scale Fura milling enterprise in the study area. Also variables; gender, marital status, household size and Educational level were found to be not significant factors that determine the level of profit by small and medium scale Fura milling enterprise in the study area. The result of hypothesis one showed that the coefficients of processing experience, and economic status were positive, while the coefficient of age and source of finance were negative. Therefore, hypothesis was rejected with respect to variables with positive coefficients and was concluded that there is positive relationship between the determinant of profit and profit level. It was concluded that both small and medium scale Fura milling enterprise in the study area were profitable ventures and that the businesses require entrepreneurs proper understanding of the risk management strategies to adopt so as to improve profit. Therefore it was recommended that considering the viability of agribusiness and how it contributes immensely to the wellbeing of small and medium scale Fura milling enterprise, government should review the system of credit accessibility in the State to encourage the expansion business and to ensure profit maximization which is the major aim of any business venture, provides incentives and suitable market for the small and medium scale Fura milling enterprise and also encourage agribusiness entrepreneurs to be educated so as to enable them adopt proper risk management strategies so that agribusiness returns can be closer to expectations.

ABSTRACT This study was analyzes profitability of small and medium scale agribusiness enterprises (a case study of fura enterprises in aleiro and jega local government areas of kebbi state, Nigeria). The methods of proportionate sampling, followed by purposive sampling techniques were adopted in selecting the Local Government Areas. Data were collected with the use of questionnaire administered on 66 small and medium scale fura enterprises (60 small scales and 6 medium scales). The data collected were analyzed using frequency distributions, percentages, gross margin, net farm income model, gini coefficient and Cobb Douglas functional form of multiple regression models. Results obtained indicate that the net income generated by small and medium scale fura enterprises was ₦436, 540 and ₦42, 434, 094.50 respectively. The results of the regression analyses showed that variables; age, processing experience, economic status and source of finance were found to be significant factors that determine the level of profit by small and medium scale Fura milling enterprise in the study area. Also variables; gender, marital status, household size and Educational level were found to be not significant factors that determine the level of profit by small and medium scale Fura milling enterprise in the study area. The result of hypothesis one showed that the coefficients of processing experience, and economic status were positive, while the coefficient of age and source of finance were negative. Therefore, hypothesis was rejected with respect to variables with positive coefficients and was concluded that there is positive relationship between the determinant of profit and profit level. It was concluded that both small and medium scale Fura milling enterprise in the study area were profitable ventures and that the businesses require entrepreneurs proper understanding of the risk management strategies to adopt so as to improve profit. Therefore it was recommended that considering the viability of agribusiness and how it contributes immensely to the wellbeing of small and medium scale Fura milling enterprise, government should review the system of credit accessibility in the State to encourage the expansion business and to ensure profit maximization which is the major aim of any business venture, provides incentives and suitable market for the small and medium scale Fura milling enterprise and also encourage agribusiness entrepreneurs to be educated so as to enable them adopt proper risk management strategies so that agribusiness returns can be closer to expectations.