IMPACT OF SME FINANCING ON POVERTY ALLEVIATION IN DEKINA LOCAL GOVERNMENT AREA, KOGI STATE

This study investigates the impact of small and medium enterprise (SME) financing on poverty alleviation in Dekina Local Government Area, Kogi State, Nigeria. SMEs are recognized as catalysts for economic growth and poverty reduction, especially in rural regions. However, their potential is frequently constrained by limited access to financial resources, poor infrastructure, and inadequate technical capacity. Using a descriptive survey design, the study sampled 384 respondents comprising local entrepreneurs and community members. Data were collected through structured questionnaires and analyzed using descriptive and inferential statistics, including chi-square tests. The findings revealed that the majority of SMEs in Dekina LGA experience significant difficulty in accessing formal financing due to stringent collateral requirements (75.5%), high-interest rates (69.0%), and bureaucratic loan processes (57.3%). Despite these barriers, SME financing was found to have a statistically significant relationship with poverty alleviation (p = 0.001), contributing positively to job creation (72.9%), income generation (65.1%), and improved household savings (56.0%). The study concludes that enhanced access to SME financing can substantially reduce poverty levels in rural areas. It recommends targeted interventions such as government-subsidized loan schemes, financial literacy programs, simplified loan procedures, and the establishment of rural microfinance institutions to bridge the financial gap. These measures are essential to unlocking the full potential of SMEs in fostering inclusive growth and sustainable development in Nigeria. Keywords: SMEs, Poverty Alleviation, Rural Development, SME Financing, Financial Access, Collateral Constraints, Kogi State, Nigeria, Microfinance, Economic Empowerment