Question 2
Observation
Some candidates attempted and did well in the question while others could not distinguish between entrepreneur and entrepreneurship.
The responses expected from candidates are:
2(a) Difference between entrepreneur and entrepreneurship:
An entrepreneur is a person who organizes and manages a business undertaking,
assuming the risk for the sake of profit while entrepreneurship is a process/act/practice of organizing the factors of production and taking risk to create wealth.
(b) The sources of finance to an entrepreneur:
(i) Personal savings - Finance could be obtained from personal savings of the
owner of a business;
(ii) Loans from friends and relations - The business owner can obtain finance
from friends and relations;
(iii) Retained profit - Undistributed profits can be ploughed back into the enterprise;
(iv) Loans from Banks - Funding of firms is possible by seeking for loans from
commercial banks;
(v) Debt factoring - This is the process where the entrepreneur engages a factor to sell his/her debts at a discount;
(vi) Bank overdraft - This is a situation where firms could withdraw over and
above the balance in the current account;
(vii) Trade credits - The entrepreneur either buy raw materials or lease equipment
and pays for it later;
(viii) Grants and subsidies – an entrepreneur could raise finance through government grants and subsidies;
(ix) Family inheritance – An entrepreneur could raise finance from sales of family assets;