ABSTRACT

 The study investigatedthe role ofsmall and medium scale enterprise in eradicating unemployment in Nigeria covering the period of1981 to 2018. The objectives ofthe study were to evaluate the impact ofsmall and medium size enterprise on unemployment rate in Nigeria and to ascertain the long run relationship between small and medium size enterprise and unemployment rate in Nigeria. Ordinary Least Square (OLS) technique and the Johansen Co-Inlegration test were employed in finding objectives. Thus revealed that; small and medium size output has a negative and significant impact on unemployment rate in Nigeria, bank credit to small and medium size industries has a negative and significant impact on unemployment rate in Nigeria, interest rate has a positive and significant impact on unemployment rate in Nigeria and here exist a long run relationship between small and medium size enterprise and unemployment rate in Nigeria. Based on thefindings, we recommended that; Nigerian governmentshould organize a national enterprise forum, which would focus on the contributions ofsmall and medium size output in national development objectives. The Government should adopt policies capable ofincreasing bank credit to small and medium size businesses thus, subsequently in the long-run contribute significantly to unemployment decrease. Interest rates should be reducedso as to encourage borrowing and make morefunds available to small and medium size enterprise in Nigeria.