The impact of SMEs on employment creation in Makurdi metropolis of Benue state

TL;DR

This study investigates how SMEs influence employment creation in Makurdi, Benue state, highlighting their significant role and the challenges they face, with recommendations for government support to enhance their impact.

Contribution

It provides empirical evidence on the impact of SMEs on employment in Makurdi and identifies key challenges hindering their growth.

Findings

SMEs significantly contribute to employment creation.

Challenges include lack of capital, business planning, and technical knowledge.

Government support can enhance SME impact.

Abstract

SMEs remain a veritable tool that generates employment opportunities. This study examined the impact of SMEs on employment creation in the Makurdi metropolis of Benue state. A sample size of 340 entrepreneurs was chosen from the population of entrepreneurs (SMEs) in the Makurdi metropolis. The study used logistic regression to analyse the impact of SME activities on employment creation or generation in the state and found that SMEs contribute significantly to employment creation in the state but are often faced with the challenges of lack of capital, absence of business planning, lack of confidence in the face of competition, unfavorable environment for the development of SMEs, high government taxes and inadequate technical knowledge. The study therefore recommended that the government should implement capital or credit enhancing programmes and an enabling environment for smooth running of the SMEs. Tax incentives should also be granted to infant enterprises, and tax administration should be monitored to avoid excessive tax rates imposed by tax collectors.