Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


An Empirical Investigation of the Role of Small Businesses in Economic Growth and Poverty Alleviation in North-Western Nigeria

Author(s): Sunday Elijah, Muhammad Usaini

This article empirically investigates the role of SME in economic growth and poverty alleviation in north-western Nigeria from 1987-2017 using time series data of Kano state, Nigeria and employing the ARDL approach. This study found that the variables of interest all together played important roles in influencing economic growth (GDP) in Kano state. Turnover of SME return and the turnover on SME employment are negative and significant while the turnover of SME loan depicted it is significant and positive. In general, the study’s findings are in harmony with the views of past studies; hence, we resolved that the results of the estimates of our ARDL are reliable and valid. Results of the empirical test found link between SME, economic growth, and poverty alleviation, from our results, the turnover of SME loan is significant and positive which contributes to GDP and alleviate poverty. The recommendations from this study are - a). The government should emphasize on the promotion of SME because they assist in alleviation of poverty. b) SME should pursue and maintain enough funds at the lowest rate of interest for its business smooth operations. c) Government should protect the SMEs by banning or placing tariff increase for the goods and services produced by SMEs in other to protect them as they are still infants. d) There is the need to maintain reasonable family size by SME operators because large family can have negative effect on income.

Get the App