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IMPACT OF SMALL AND MEDIUM ENTERPRISES DEVELOPMENT AGENCY OF NIGERIA (SMEDAN) PROGRAMS ON THE GROWTH OF MSMEs IN NIGERIA (CASE STUDY: SELECTED BUSINESSES IN UYO METROPOLIS)
ABSTRACT
This study investigates the impact of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) programs on the growth of Micro, Small, and Medium Enterprises (MSMEs) in Nigeria, with a specific focus on selected businesses in Uyo Metropolis, Akwa Ibom State. MSMEs are essential to Nigeria’s economy, driving employment, innovation, and poverty reduction, yet they grapple with challenges like limited financing, infrastructural deficits, and policy implementation gaps. Established in 2003, SMEDAN provides capacity building, financial access, and market linkages to foster MSME sustainability. Utilizing a descriptive survey research design, primary data will be gathered via structured questionnaires from 100 MSME owners and managers in Uyo, supplemented by secondary data from reports and journals. Data analysis will employ descriptive statistics and regression models to test hypotheses. The study objectives are to assess the extent of SMEDAN program implementation, evaluate MSME growth metrics, and analyze the relationship between SMEDAN interventions and business growth. Anticipated findings suggest that while SMEDAN programs positively influence growth indicators such as revenue and employment, barriers like inadequate funding and bureaucratic hurdles limit their effectiveness. Recommendations will emphasize policy enhancements for better resource allocation and stakeholder collaboration. This research contributes to the discourse on government-led MSME development in emerging economies, offering practical insights for policymakers, entrepreneurs, and agencies to promote inclusive economic growth in Nigeria, particularly in regions like the South-South, including nearby areas such as Abia State.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Micro, Small, and Medium Enterprises (MSMEs) constitute the backbone of Nigeria’s economic framework, serving as principal agents of employment creation, innovation, poverty alleviation, and diversification from petroleum dependency. Statistical evidence from the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) reveals that MSMEs represent 96.9% of registered Nigerian businesses, contribute 46.32% to national GDP, constitute 6.21% of export volume, and employ 87.9% of the workforce, equating to over 60 million jobs (National Bureau of Statistics & Small and Medium Enterprises Development Agency of Nigeria, 2021; PwC, 2024). Contemporary industry analyses estimate MSME contributions at 48–50% of GDP and 84% of employment, demonstrating sectoral resilience against macroeconomic volatility (Agusto & Co., 2025).
In urban centers such as Uyo Metropolis, Akwa Ibom State, MSMEs dominate strategic sectors including retail trade, agro-processing, fashion, carpentry, and service provision, functioning as catalysts for localized economic development (SMEDAN, 2024a). Established via the 2003 SMEDAN Act, the Small and Medium Enterprises Development Agency of Nigeria implements structured interventions encompassing capacity development, financial accessibility, market integration, formalization assistance, and policy formulation to mitigate systemic constraints (SMEDAN, 2025).
Notably, the Matching Fund Program exemplifies SMEDAN’s strategic approach, providing concessional financing for agribusiness and real-sector MSMEs with beneficiary co-contributions to foster sustainability. This initiative has supported thousands nationwide, including 90 Uyo-based entrepreneurs receiving trade-specific equipment (SMEDAN, 2024b; Blueprint Newspapers, 2024). Academic assessments confirm such programs elevate managerial capabilities, export preparedness, formalization rates, and entrepreneurial mindsets, yielding measurable performance improvements (Umar & Bello, 2024; Gumel & Bardai, 2023).
Empirical research on Gombe Main Market entrepreneurs indicates direct SMEDAN-induced business growth despite persistent accessibility barriers (Umar & Bello, 2024). The 2024-introduced nMSME grading system exemplifies institutional innovation, standardizing enterprise evaluations to optimize resource allocation, with potential to augment GDP by US$28 billion through enhanced risk assessment (Pillay et al., 2024).
SMEDAN additionally facilitates diaspora engagement, channeling transnational capital and expertise into domestic SME ecosystems (Gumel & Bardai, 2023). While Uyo MSMEs benefit from equipment grants and academic institutional partnerships (Tribune Online, 2024), empirical quantification of localized growth impacts remains insufficient.
SMEDAN’s 2026 strategic objectives prioritize formalizing one million enterprises, generating 90,000 jobs, and securing ₦12 billion in affordable financing (Punch Newspapers, 2025; The Nation Newspaper, 2025). This study consequently examines SMEDAN program efficacy in driving revenue growth, employment generation, and market penetration among Uyo MSMEs, thereby enriching scholarly understanding of public-sector SME interventions in sub-Saharan Africa.
1.2 Statement of the Problem
Despite their undeniable economic significance, Nigerian micro, small, and medium enterprises (MSMEs) continue to encounter systemic barriers that constrain growth potential, sustain high failure rates, and limit contributions to national development. Key challenges include chronic inadequate access to affordable finance, deteriorating infrastructure, regulatory complexities, bureaucratic inefficiencies, limited technological adoption, and insufficient capacity-building support (PwC, 2024; Igben & Ojoboh, 2024). These constraints result in subdued performance, with many enterprises struggling to scale or survive beyond initial operational years.
Since its establishment in 2003, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has implemented numerous programs to mitigate these challenges. However, persistent gaps in policy execution, uneven resource allocation across regions, and inadequate monitoring mechanisms have yielded inconsistent outcomes (SMEDAN, 2025; Yusuf & Ahmed, 2024). Recent surveys indicate that while MSMEs maintain substantial GDP and employment shares, their underperformance exacerbates income inequality, as growth opportunities disproportionately favor larger firms due to financing disparities and exorbitant interest rates (PwC, 2024; Proshare, 2025). Evaluations of SMEDAN’s micro-credit schemes in states such as Nasarawa reveal poor repayment rates, limited outreach, and stunted business expansion, underscoring inefficiencies in program implementation (Yusuf & Ahmed, 2024).
Scholarly analyses further demonstrate that critical success factors including market access, technology integration, and innovation remain inadequately supported by current SMEDAN initiatives, resulting in suboptimal economic diversification, diminished job creation, and missed opportunities for inclusive growth (Zubairu & Sakariyau, 2023; Ogunleye & Adeyemi, 2024). In Southwest Nigeria, performance assessments highlight how elevated borrowing costs and administrative obstacles in government programs severely impede scalability and digital transformation (Ogunleye & Adeyemi, 2024). The 2021–2025 National Policy on MSMEs, overseen by SMEDAN, has faced criticism for insufficiently addressing these barriers, particularly for vulnerable groups such as women and youth entrepreneurs, who encounter additional gender-specific and educational constraints (Umar & Bello, 2024; Igben & Ojoboh, 2024).
In Uyo Metropolis, these challenges manifest as stagnant revenue growth, restricted market expansion, and low formalization rates among selected enterprises, despite SMEDAN’s localized empowerment initiatives (SMEDAN, 2024b). Furthermore, with Nigeria’s economic trajectory increasingly reliant on SME performance indicators such as commercial bank lending and patent registrations, the inconsistent efficacy of SMEDAN interventions jeopardizes progress toward sustainable development goals (Agusto & Co., 2025). This study addresses these deficiencies by empirically examining the relationship between SMEDAN programs and MSME growth in a specific localized context, offering evidence-based recommendations to enhance policy execution and maximize developmental impact.
1.3 Objectives of the Study
The general objective is to examine the impact of SMEDAN programs on the growth of MSMEs in Nigeria, focusing on selected businesses in Uyo Metropolis.
The specific objectives are:
- Assess implementation extent of SMEDAN programs in Uyo Metropolis.
- Evaluate growth metrics of selected MSMEs.
- Analyze relationship between SMEDAN programs and MSME growth.
1.4 Research Questions
- What is the implementation extent of SMEDAN programs in Uyo Metropolis?
- What are the growth metrics of selected MSMEs?
- What is the relationship between SMEDAN programs and MSME growth?
1.5 Significance of the Study
This research holds substantial value for multiple stakeholders. Policymakers and government agencies like SMEDAN can utilize the findings to refine program designs, ensuring more effective resource allocation and addressing implementation gaps for enhanced MSME support. Entrepreneurs, particularly in Uyo Metropolis and neighboring regions like Aba in Abia State, will gain actionable insights into leveraging SMEDAN initiatives for business expansion and sustainability. Academically, the study enriches the body of literature on public sector interventions in MSME development within emerging markets, providing a foundation for future empirical research. Development partners and financial institutions may draw on the results to collaborate on innovative financing models, ultimately contributing to poverty reduction, job creation, and inclusive economic growth in Nigeria.
1.6 Scope of the Study
The study is delimited to evaluating the impact of SMEDAN programs on MSME growth, concentrating on 100 selected businesses in key sectors such as trade, manufacturing, and services within Uyo Metropolis, Akwa Ibom State. It encompasses data from the period 2020 to 2025, incorporating both quantitative growth metrics and qualitative perceptions of program effectiveness.
1.7 Limitations of the Study
Key limitations include potential respondent bias in self-reported questionnaire data, which may affect the accuracy of growth metrics. Access to comprehensive SMEDAN internal records could be restricted, limiting depth in program implementation analysis. The geographical focus on Uyo Metropolis may constrain generalizability to rural or other urban areas in Nigeria. Additionally, time and budgetary constraints restrict the sample size and scope, potentially overlooking broader national trends.
1.8 Definition of Terms
- SMEDAN: Small and Medium Enterprises Development Agency of Nigeria, a federal agency established in 2003 to promote and develop MSMEs through various support programs.
- MSMEs: Micro, Small, and Medium Enterprises, defined in Nigeria as businesses with fewer than 250 employees and total assets excluding land and buildings not exceeding N500 million.
- Growth: Refers to measurable increases in business performance indicators, including revenue, employment levels, market share, and profitability over a specified period.
References
Agusto & Co. (2025). 2025 Nigerian SME industry report. https://www.agustoresearch.com/report/2025-nigerian-sme-indystry-report
Blueprint Newspapers. (2024). SMEDAN empowers 90 entrepreneurs with equipment in Akwa Ibom. https://blueprint.ng/a-ibom-smedan-empowers-90-entrepreneurs-with-equipment-in-akwa-ibom
Gumel, B. G., & Bardai, B. (2023). Diaspora capital and SME development in Nigeria: Assessing SMEDAN’s policy frameworks and institutional role. International Journal of Open Scientific Research, 2(3), 1–15. https://www.ijojournals.com/index.php/ssh/article/download/1138/604
Igben, P. O., & Ojoboh, A. (2024). Small and medium enterprises as catalysts for reducing unemployment in Nigeria. IRE Journals, 8(1), 1–15. https://www.irejournals.com/formatedpaper/1706894.pdf
Moniepoint. (2025). Small business statistics in Nigeria for 2026. https://moniepoint.com/blog/nigeria-small-business-statistics
National Bureau of Statistics & Small and Medium Enterprises Development Agency of Nigeria. (2021). National survey of micro, small and medium enterprises (MSMEs). https://www.nigerianstat.gov.ng/pdfuploads/MSMES.pdf
Ogunleye, O. O., & Adeyemi, A. A. (2024). Assessment of micro, small and medium enterprises performance in Southwest Nigeria. Journal of Management Information and Decision Sciences, 27(3), 1–12. https://www.abacademies.org/articles/assessment-of-micro-small-and-medium-enterprises-performance-in-southwest-nigeria-16018.html
Pillay, S., Sikochi, A., Odii, C., Ismail, Z., Bamaiyi, R., & Mubaiwa, D. (2024). Public sector SME grading system in emerging markets: A focus on Nigeria. Harvard Business School Working Paper. https://www.hbs.edu/ris/download.aspx?name=SME_Grading_October_2024.pdf
Proshare. (2025). Nigerian MSMEs in 2025: Challenges and opportunities to scale. https://proshare.co/articles/nigerian-msmes-in-2025-challenges-and-opportunities-to-scale
Punch Newspapers. (2025). SMEDAN plans one million business formalisation, N12bn funding boost in 2026. https://punchng.com/smedan-plans-one-million-business-formalisation-12bn-funding-boost-in-2026
PwC. (2024). PwC MSME survey report 2024. https://www.pwc.com/ng/en/assets/pdf/pwc-msme-survey-report-2024.pdf
SMEDAN. (2024a). SMEDAN empowers 55 SMEs in Akwa Ibom state. https://smedan.gov.ng/
SMEDAN. (2024b). Empowerment and impact report. https://smedan.gov.ng/smedan-empowerment-and-impact-report
SMEDAN. (2025). SMEDAN unveils 2026 roadmap for MSME growth. https://smedan.gov.ng/
The Nation Newspaper. (2025). SMEDAN unveils 2026 roadmap to boost MSMEs with low-interest loans, job creation. https://thenationonlineng.net/smedan-unveils-2026-roadmap-to-boost-msmes-with-low-interest-loans-job-creation
Tribune Online. (2024). SMEDAN launches entrepreneurial club in Ibom Metropolitan Polytechnic. https://tribuneonlineng.com/smedan-launches-entrepreneurial-club-in-ibom-metropolitan-polytechnic
Umar, A., & Bello, A. (2024). Impact of Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) on women entrepreneurship in Gombe Main Market. Global Journal of Research in Business Management, 4(6), 1–12. https://gjrpublication.com/wp-content/uploads/2024/11/GJRBM4621404.pdf
Yusuf, M. A., & Ahmed, S. B. (2024). Effect of small and medium enterprises development agency (SMEDAN) micro-credit and loan repayment on SMEs growth in Nasarawa State, Nigeria. Pacific Economic and Management Studies Journal, 4(1), 1–15. https://pemsj.com/papers/PEMSJ-Vol-4Issue-1_547.pdf
Zubairu, M. U., & Sakariyau, O. B. (2023). Critical success factors (CSFs) of SMEs in Nigeria and the mediating impact of SMEDAN initiative between the CSFs and SMEs’ success. International Journal of Business and Economics Research, 12(3), 1–15. https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20231203.11