Small and Medium Size Enterprises (SMEs) and Multidimensional Poverty Index: Empirical Evidence from Nigeria

Abstract

The aim of this paper is to investigate the role of Small and Medium Enterprises (SMEs) on poverty reduction in Nigeria. Data were obtained from 432 small and medium entrepreneurs of Niger State in eight Local Government Areas selected through a cluster sampling technique. Using a Confirmatory Factor Analysis (CFA), the measurement model fit was determined, the outer loadings the structural model are highly significance at 0.05 level. The results indicate that all paths in the model are significant i.e. all their β are positive and p-values are < 0.05, and the four hypotheses proposed are supported. The result shows that there are positive changes in the poverty status of the people due to their involvement in SMEs activities of employment, innovation, human capital development and income. The result implies that policy makers, government and their agencies should create an enabling environment through the provision of facilities such viable credit support, reduction in corporate taxes and the infrastructures needed for the opportunities in the SMEs to be harnessed optimally.