NATURE AND DETERMINANTS OF SMALL AND MEDIUM SCALE ENTERPRISES LOCATION FACTORS IN ENUGU STATE, NIGERIA

Abstract

This study is aimed at assessing location factors of Small and Medium Scale industries in Enugu State. To achieve the aim of this study data were collected from field observations, questionnaire and documentary material. Data were collected on nature of SME location factors and determinants of SME location. Data were analysed using percentages and Principal Component Analysis (PCA). Results show that the 15 variables of factors of SME location were compressed to five important factors using PCA. The five factors are availability of economic factors such as market, raw material, labour, influence of infrastructure especially transportation route, family ties, agglomeration effect and Government policies. The five variables, explained 74.12% of the total variance leaving 25.88% of total variance unexplained at significant loadings exceeding +/_ 0.06. This means that before any entrepreneur sets up SMEs in Enugu state, the person must consider the availability of these variables. Also it shows that the five variables will affect the behavior of SME owner in their choice of location. Appropriate recommendation based on our findings includes provision of infrastructure especially roads and Small and medium scale industrial park, estate or clusters with up to date infrastructure.