Role Of Small And Medium Enterprises In Poverty Reduction: Analyzing Entrepreneurship’s Impact On Economic Development In Nigeria

• Phillips Panotani Asaph

  Adamawa State University, Mubi, Faculty of Social Sciences, Communication and Media Studies, Department of Economics

  Author

• Zakariyau Buba

  Department of Economics, Adamawa State College of Education, Hong

  Author

Entrepreneurship plays a critical role in fostering economic development and reducing poverty, particularly in developing countries like Nigeria. This paper examines the contribution of Small and Medium Enterprises (SMEs) to economic growth and poverty alleviation in Nigeria. SMEs account for a significant share of employment and GDP, serving as engines of innovation, income generation, and inclusive development. The study adopts a mixed-methods approach, combining quantitative and qualitative data to explore the role of SMEs in economic development and poverty reduction in Nigeria. The findings revealed a strong positive correlation between access to finance and business performance (R² = 0.76, p < 0.01), indicating that SMEs with access to credit were more likely to report higher revenues and greater profitability. Specifically, 67% of SMEs with access to credit reported increased revenues over the past year, compared to only 42% of those without access to finance. Despite their potential, SMEs face challenges including limited access to finance, poor infrastructure, regulatory bottlenecks, and inadequate entrepreneurial skills. The paper recommends targeted policy interventions to address these barriers and create an enabling environment for SME growth. Enhancing the SME sector is essential for achieving inclusive economic development and realizing national and global development goals.

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