This study evaluates the economic impact of Small and Medium Enterprises (SMEs) proliferation in Port Harcourt, Rivers State, Nigeria. Using a mixed-methods approach, the research examined employment generation, income distribution, and local economic development resulting from SME activities. Data were collected from 450 SME operators and 200 community members through structured questionnaires and in-depth interviews. The findings revealed that SMEs have significantly contributed to job creation (67% of respondents employed 2-10 people), income generation (average monthly revenue of ₦850,000), and local economic diversification. However, challenges including limited access to finance, inadequate infrastructure, and regulatory bottlenecks constrain optimal performance. The study recommended, among others, an improved access to credit facilities, infrastructure development, and streamlined regulatory processes to enhance SME contributions to the local economy.