The study examines the impact of financing SMEs on sustainable development in Nigeria for the period of 1992-2023 with the data obtained on Poverty reduction (POV), proxy for sustainable development, commercial bank credit SMEs (CBSM), microfinance credit to SMEs (MFSM), aid and grant to SMEs (AGS), credit scheme to SMEs (SCS), and prime lending rate (PLR) proxy for cost of borrowing. The study employed an autoregressive distributed lagged model (ARDL-ECM). The error correction model (ECM) result showed that the speed of adjustment is 93%, which means that about 93% disequilibrium in previous period is restored into equilibrium in the subsequent periods. The study went further to reveal that in the short run, CBSM, MFSM, and AGS have a positive significant impact on sustainable development while SCS and PLR have a negative significant impact on sustainable development in Nigeria, respectively. In the long run, MFSM and PLR have a negative significant impact on sustainable development in Nigeria but CBSM has a negative insignificant impact on sustainable development. However, AGS and SCS have a positive significance on sustainable development through poverty reduction in Nigeria. The study concluded that SMEs financing has significant impact on sustainable development visa viz poverty reduction. Hence, the study recommends that monetary authorities should reduce lending rates to single digit with the intention to create jobs, reduce poverty, and achieve economic stability and sustainability. Government should focus more on creating an enabling environment for business instead of giving aid and grants that will not reach the target audience, and the Central Bank of Nigeria (CBN) should partner with microfinance institutions in Nigeria to disburse free interest loan to SMEs with a view to reduce poverty in Nigeria.