Assessment of the Effect of Inflation on the Growth and Development of Small and Medium Enterprises (SMEs) in Nigeria: Empirical Evidence from Selected SMEs in Kaduna State.

Abstract

The research focused on analyzing the impact of inflation on the sustainability of SMEs in Kaduna State. To gather insights from the participants, a survey research design was adopted, allowing for a systematic collection of data. The target population comprised 8,462 registered SMEs actively operating within Kaduna State. For the study, a sample size of 382 SMEs was meticulously determined using the Taro Yamane formula, ensuring a representative selection for accurate analysis. Primary data was employed through a questionnaire to collect data from respondents. Data was analysed using multiple regression model. The study found out that both high interest rates and stock market failures have significant negative effects on the growth and development of SMEs in Kaduna State. The study, therefore, recommended that policymakers and financial institutions should take action to address the issues of high interest rates and stock market instability that are hindering the prosperity of SMEs in Kaduna State. Specifically, the government should consider implementing policies aimed at reducing interest rates for SMEs, such as offering subsidized loans or creating more favorable borrowing conditions as this could help alleviate the financial burden on SMEs and promote their expansion. Additionally, efforts should be made to stabilize the stock market through improved regulation and the provision of better access to financial markets for SMEs.