IMPACT OF SMALL AND MEDIUM SCALE ENTREPRISES ON ECONOMIC GROWTH IN NIGERIA

Abstract

This study examined the extent to which small and medium scale enterprises impacted the economic growth in Nigeria. Secondary data source from World Bank Group, Central Bank of Nigeria Statistical Bulletin and Index Mundi were used. Correlation research design was also adopted. Employment generation, poverty reduction and income growth data were used as measurement of economic growth. The data on the contribution of small and medium scale enterprises to the economic growth was used as measured of small and medium scale enterprises. Ordinary Least Square (OLS) was used for data analyses. The study revealed that there is direct influence of small and medium scale enterprises on employment generation and that 72% variation in employment generation was accounted for by small and medium scale enterprises. There is positive influence of small and medium scale enterprises on poverty reduction and that about 60% variation in poverty reduction was accounted for by small and medium scale enterprises. Also, there is positive influence of small and medium scale enterprises on income growth and that about 70% variation in income growth was accounted for by small and medium scale enterprises in Nigeria. It was recommended that governments at all levels should endeavour to establish microfinance banks for easy access to credit by small and medium enterprises and that adequate infrastructural facilities were to put in place for proper operations of small and medium scale enterprises in the Nigerian economy.