The Effects of Small and Medium Enterprises (SMEs) Performance on Poverty Alleviation in Nigeria

The study investigated the effects of small and medium enterprises (SMEs) performance on poverty alleviation in Nigeria using annual time-series data from 1990 to 2022. Secondary data were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and World Bank Development Indicators. The variables used in the study were – commercial bank loan to SMEs (CBLSME), employment rates (EMPR), trade openness (TOP), interest rates (RINTR), inflation rates (INFLR) and poverty rate (PR). The independent variable (SMEs) was proxied by commercial bank loans to SMEs, employment rate and trade openness, while interest rate and inflation rate were used as the control variables. The dependent variable (poverty alleviation) was proxied as the poverty rate. A multiple linear regression model was built and estimated using the Auto-Regressive Distributed Lag Bound test (ARDL). It was found that there is no long-run relationship among the variables. Findings revealed that all the variables except trade openness had a significant relationship with poverty alleviation in Nigeria. It was therefore recommended that the government should prioritise strategies that foster job creation by implementing targeted programs to support skill development, entrepreneurship and job placement. It suggests that policymakers should carefully assess interest rate policies, as transparent and flexible interest rate policies encourage savings and investments and contribute to economic growth. Also, policymakers should assess trade policies in order to develop strategies that promote fair trade.