The research study examined the factors that influence the success and failure of small and medium entrepreneurship in rural areas in Nigeria. One hundred (100) respondents were interviewed for the study and questionnaires were used to obtain information on the factors influencing the success and failure of small and medium-scale enterprises in rural areas in Nigeria. Data was analyzed using descriptive statistics such as frequency distribution and inferential statistics chi-square analytical technique, regression, and correlation analysis. The findings of the study showed that there is a significant relationship between factors affecting small and medium enterprises and the performance of SMEs in Nigeria. As such, the findings revealed that there is a significant relationship between government policy and the performance of small and medium enterprises in Nigeria. Also, it was revealed from the study that there is a significant relationship between entrepreneurship level of income and the success and failure of small and medium-scale enterprises in Nigeria. It is however recommended that the government should make their policy count on S.M.E performance by ensuring that there is an active operation of the S.M.E Credit Guarantee Scheme to improve credit providers’ exposure to longer-term debt issued by small firm managers in rural areas as business plan development, feasibility studies, project monitoring and analysis.