THE IMPACT OF SMALL AND MEDIUM SCALE ENTERPRISES ON POVERTY REDUCTION IN NIGERIA

ABSTRACT

This study was undertaken to access the impact of small and medium scale enterprises on poverty reduction in Nigeria. To achieve this aim, a model was built using the factors affecting smes growth namely business environment, managerial skills and smes funding to find out how much smes affect poverty in Nigeria. Business environment was proxied as capital expenditure and inflation, smes funding was proxied as commercial banks loans to small scale businesses while managerial skills was proxied as human capital index, and these were used as the independent variables. Secondary data on poverty (PI), capital expenditure (CEXP), inflation (INF), human capital index (HCI)and commercial banks loan to small businesses (CBCS)from the period of 2013-2022 was collected. The model built was estimated using OLS regression technique. It was found that there was 11 an overall significance of the model. INF was found to have a positive relationship and effect on poverty while CEXP, HCI, and CBCS had a negative relationship with poverty. CEXP was found to have a statistically significant relationship with poverty while CBCS and HCI were found to have a less than significant relationship with poverty. In conclusion while smes have a significant impact on poverty, the study recommends that efforts should be made by government to provide a stable and habitable business environment for these small-scale enterprises to operate.