Impact of Small and Medium Scale Agricultural Enterprises on Household Welfare

Abstract

Small and Medium Scale Agricultural Enterprises (SMEs) play a crucial role in economic development, particularly in rural and semi-urban areas where large-scale industries are limited. However, despite their contributions, SMEs in Kariji, Southern Kaduna, face significant challenges, including inadequate access to financing, poor infrastructure, and regulatory bottlenecks, which hinder their ability to improve household welfare and create sustainable employment. This study seeks to evaluate how agricultural SMEs contribute to income generation, employment opportunities, and economic stability in Kariji, while identifying the barriers that limit their effectiveness. The research adopts a quantitative research design, utilizing structured questionnaires to collect primary data from a sample size of 348 respondents determined using Yamane’s formula. Descriptive and inferential statistical methods, particularly chi-square tests, were employed to analyze the relationship between SME activities and household welfare. The results indicate that while SMEs contribute to financial security, job creation, and food accessibility, their measurable impact on household welfare and employment is not statistically significant at the 5% level. This suggests that while SMEs provide economic benefits, external challenges such as infrastructure deficits, lack of access to credit, and policy inconsistencies limit their transformative impact. The findings underscore the need for policy interventions, including improved financial accessibility, SME-friendly regulations, and infrastructural development, to enhance the sector’s role in sustainable economic growth.