European Journal of Business and Management www.iiste.org ISSN 22221905 (Paper) ISSN 22222839 (Online) Vol 4, No.8, 2012 95           Dr. Mrs Ann Ogbo AGU CHIDIEBERE NWACHUKWU Dept. Of management, University of Nigeria, Enugu Campus. PMB 011 *E mail of the correspondence author: annogbo@yahoo.com brightchidi@yahoo.com  The aim of the paper is to develop and analyse the contributions of entrepreneurship in the economic development through SME development in Nigeria. A total of 100 SMEs were randomly selected from a cross section of a population of all SMEs spread around some states of Nigeria and covering virtually all forms of enterprise. Participants were selected through a simple random sampling. The responses to the questionnaires were complemented with personal interviews of some SMEs operators. The responses of the participants were analyzed using the statistical package for social sciences (SPSS), which generated the frequency distributions, means, standard deviations, chisquare statistics, analyses of variance, etc of the responses. The hypotheses of this research which were tested at 0.05 level of significance using chisquare statistics hinged on identifying the greatest problem which SMEs face in Nigeria, the identification and ranking of the top ten problems or challenges of SMEs in Nigeria and the relationship between the form and nature of the business enterprise and its sources of funding for its operations. The major findings of this study include the following: SMEs have played and continue to play significant roles in the growth, development and industrialization of many economies the world over. In the case of Nigeria, SMEs have performed below expectation due to a combination of problems which ranges from attitude and habits of SMEs themselves through environmental related factors, instability of governments and frequent government policy changes etc. Promoters of SMEs should thus ensure the availability or possession of managerial capacity and acumen before pursuing financial resources for the development of the respective enterprise. : key words Entrepreneurship, SMEs, Economic development ! " There is a distinction between theoretical and operational definitions of entrepreneurship. In general, the theoretical definitions are wide, covering a number of entrepreneurial activities, whereas the operationalized definitions cover a singular aspect. Glancey and McQuaid (2000:2223) mention five definitions of entrepreneurship, while Wennekers and Thurik (1999:4647) mention thirteen. The economic definition of entrepreneurship can be viewed from a theoretical and an operational context. Chandler (1990:8) defines entrepreneurship as dealing with uncertainty, making a distinction between risk, which can be calculated, and uncertainty, which cannot. Schumpeter (1934:66) describes the entrepreneur as the bearer of the mechanism for change and economic development, and entrepreneurship as the undertaking of new ideas and new combinations, that is innovations. Drucker (1985:93) describes the entrepreneur as a person who is willing to risk his capital and other resources in new business venture, from which he expects substantial rewards if not immediately, then in the foreseeable future. Okpara (2000:34) sees the entrepreneur as an individual who has the zeal and ability to find and evaluate opportunities. He further observes that they are calculated risktakers, who enjoy the excitement of challenges, not necessarily gamblers. The role of entrepreneurship has been different across countries. Holcombe (1998:60) claims that, “the engine of economic growth is entrepreneurship.” Entrepreneurship has been assessed as a driving force of decentralisation, economic restructuring and movement in the direction of market economy (Smallbone,  ., 1996:16). Small and Medium Enterprises (SMEs) occupy a place of pride in virtually every country or state. Because of their (SMEs) significant roles in the development and growth of various economies, they (SMEs) have aptly been referred to as “the engine of growth” and “catalysts for socioeconomic transformation of any country.” SMEs represent a veritable vehicle for the achievement of national economic objectives of employment generation and poverty reduction at low investment cost as well as the development of entrepreneurial capabilities including indigenous technology. Other intrinsic benefits of vibrant SMEs include access to the infrastructural facilities occasioned by the existence of such SMEs in their surroundings, the stimulation of economic activities such as suppliers of various items and distributive trades for items produced and or needed by the SMEs, stemming from rural urban migration,