The Impact of Small and Medium Scale Enterprises on Economic Development of Ekiti State, Nigeria

Abstract

Small and Medium Scale Enterprises (SMEs) has proved to be a major intervention in resolving the problems of poverty and unemployment in most developing countries. This study examines the impact of SMEs on Economic Development of Ekiti State (2006-2013). A survey research design was adopted to obtain data from 150 respondents comprising of traders, artisans, production factories and other small and medium enterprises which were selected using multi stage sampling method across 16 local government areas in Ekiti State. Three Null hypotheses were tested to identify the significant effects of Small and Medium Scale Enterprises on poverty reduction, employment generation and improvement in the standard of living in Ekiti State. Data for this study was analysed using Statistical Package for Social Sciences (SPSS) and Chi-square at 0.05 level of significance was used to test the hypotheses. The findings revealed that there is a positive and significant relationship between SMEs and poverty reduction, employment generation and improvement in standard of living of people in Ekiti State. Furthermore, the result revealed that there was a 57% increase in the number of SMEs in the State between the years 2009-2013. The study concludes that access to capital funding by reduction in the interest rate on loan offered by banks can boost the performance of SMEs in Ekiti State and Nigeria at large.

Keywords: SMEs, Poverty Alleviation, Unemployment Bank, Economic development