Nigerian Journal of Banking and Financial Issues (NJBFI)

The Role Of Small And Medium Scale Enterprises In Unemployment Reduction In Nigeria

Abstract

This study investigated small and medium-sized businesses’ (SMEs) role in reducing unemployment in Nigeria. Secondary time series data was obtained for the study. Estimation methods used in the study’s analysis includes descriptive statistics correlation analysis, ARDL co-integration, parsimonious error correction model and other post estimation tests. Discoveries from the study revealed that SMEs contribution to export pose positive insignificant impact on unemployment reduction in Nigeria in the long run and a negative insignificant impact on industrial growth in short run; Deposit Money bank (DMB)  credit to SMEs pose positive significant impact on industrial growth in the long-run and a positive significant impact on industrial growth in the short run; SMEs contribution to gross domestic product pose positive significant impact on industrial growth in the long run and a negative insignificant impact on industrial growth in the short run. According to the study, the government should foster an environment that is favourable to SMEs, DMBs ought to give the SMEs loans with reasonable terms, and the government should also offer incentives to SMEs.