SMALL BUSINESSES-ECONOMIC GROWTH NEXUS IN POVERTY REDUCTION IN NORTH-WESTERN NIGERIA

Abstract

This study examines the role of SME in economic growth and poverty reduction in north-western Nigeria from 1987-2017 by employing time series data for Kano state, Nigeria and using ARDL method. All the variables are significant determinants of economic growth (GDP). Turnover of SME return is significant and negative, turnover on SME employment is significant and negative whereas the turnover of SME loan is positive and significant. In overall, the study’s findings are in line with the views of prior studies, therefore, we conclude that the results of the estimates of our ARDL are valid and reliable. Outcomes of the empirical test found link between SME, economic growth and poverty reduction, from our results, the turnover of SME loan is positive and significantly contributes to GDP and reduce poverty. This study recommends: a) The government should stress on promotion of SME because they assist in poverty reduction. b) Government should protect SMEs through tariff increase or banning the goods and services produced by SMEs so as to protect them because they are still infants. c) There is the need to maintain and sustain reasonable family size by SME operators because large family could have negative effect on income.