The Impact of Small and Medium Scale Enterprises on Poverty Alleviation in Nigeria: An Empirical Evidence from Osun State, Nigeria

Abstract

The importance of small and medium enterprises to economic evolutions of developed countries can never be over emphasized especially in the area of employment creation which is expected to have positive impact on alleviation of poverty. This study, therefore, is premised on whether small and medium enterprises have impact on poverty alleviation as a result of employment they generate in Nigeria. The researcher adopted the survey research design and obtained its data from both primary and secondary sources. The primary data were obtained through questionnaire. 20 respondents were randomly selected from each of the 30 local governments, and 10 respondents randomly selected from the only local government area office in Modakeke, Osun State, making 610 small and medium entrepreneurs that were selected for the study. The instrument was administered on a sample size of 610. The researcher was able to retrieve 528 questionnaires from the respondents making approximately 86.6% returns. Therefore, 528 was used as the actual sample size. Mean rating and standard deviation was used as descriptive statistics to analyze the primary data. The study found that SMEs has positive impact on employment generation, but there is gap between employment generated through SMEs and reduction in the rate of poverty. The study finally identified based on respondent's opinion, solutions that if used, will assist SMEs in alleviating poverty in Nigeria. The study recommended that government at all level should continue to encourage and stimulate potential entrepreneurs to set up SME for continuous generation of employment, government at all level should always include in their yearly plan the alternate ways of poverty reduction, private stakeholders and institutions should join hands with government in the provision and implementation of solutions identified by this study.