ABSTRACT
The study investigates the impact of small and medium scale industries on the Nigerian economy, spanning from 1981 to 2015. The study adopted Ordinary Least Square (OLS) Linear Specification model. Using unit root test, the work shows that small scale industries significantly contributed to the economic growth in Nigeria despite poor funding by commercial banks. The work recommends among others that government should improve its monetary policies so as to reduce to an acceptable level, the rate of interests charged by commercial banks to loan given to private sectors and loan given to small and medium industries as well as encouraging rural based industrialization, whereby investors are encouraged to establish small and medium scale industries that would be based entirely on local raw materials, machines and equipments.