Welfarism and Poverty Reduction: The Mediating Role of SME Performance in Nigeria’s Trader-Moni Scheme

Poverty reduction interventions in Nigeria have increasingly depended on market-oriented welfare initiatives that aim to empower rather than merely support beneficiaries with access to funds. This research paper focuses on the welfarist Trader-Moni microcredit scheme within the Government Enterprise and Empowerment Programme (GEEP), examining the role of SME performance in mediating the influence of welfarism on poverty reduction. A quantitative survey research design was applied in the study; data were collected from Trader-Moni beneficiaries engaged in micro and small trading activities. The direct and indirect relationships between the Trader-Moni scheme, SME performance, and poverty reduction were analysed using structural equation modelling. The results indicate that access to the Trader-Moni microcredit scheme alone is insufficient to drive poverty reduction; rather, it must be complemented by institutional and operational support mechanisms that strengthen the productive capacity of SMEs. This highlights the potential of SMEs in bridging the link between welfare interventions and sustainable poverty reduction. Furthermore, this study demonstrates that welfare programmes are most effective when they strengthen the productive capacities of SME owners.