Financial Inclusion And Micro, Small And Medium Enterprises (Msmes) Development In Nigeria (original) (raw)
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FINANCIAL INCLUSION AND PERFORMANCE OF MICRO, SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA
Financial inclusion assures easy access to financial services by enabling the disadvantaged and vulnerable sections of the society to actively contribute to development and protect themselves against socioeconomic shocks. Nigeria has a sizeable rural poor population with limited access to conventional financial institutions or services. This study investigated the impact of financial inclusion on the micro, small and medium enterprises (MSMEs) performance in Nigeria. The survey research design method was used, involving the use of questionnaires, in collecting data from respondents. Data were analyzed using the Pearson Chi-square technique. The results show that, whereas financial inclusion positively and significantly impacts the operations and growth of MSMEs, distance to financial services access points and infrastructural deficiency challenged fast and effective access to financial services by MSMEs in Nigeria. The study recommends that deliberate efforts should be made to spread access points to more rural areas and improve infrastructure to promote FI. This should include a policy roadmap for expanding financial services access points to unbanked and underserved areas using the financial services geospatial map. Furthermore, the digitizing of payments across the country should be prioritized to include enhanced ICT/E-banking tools and a consumer protection framework.
INFLUENCE OF FINANCIAL INCLUSION ON SMALL AND MEDIUM ENTERPRISES GROWTH AND DEVELOPMENT IN NIGERIA
The study examined the influence of financial inclusion dimensions (mobile banking, banking services and banking penetration) on SMEs growth and development in Nigeria. The study comprises on a quantitative survey of 625 Small scale businesses. The data was collected from the business organizations operating in all local governments of Oyo State, Nigeria through a self-administered questionnaire. The study covered bakery, block making fabric making and hairdressing. Linear Regression Analysis was employed to analyse data collected. The result revealed that financial inclusion dimensions (mobile banking, banking services and banking penetration) have positive and significant influence on SMEs growth and development. Subsequently, recommendation was made that government should provide capacity building efforts that could lead to well-managed, sustainably financed SME support mechanisms especially credit guarantees.
International Journal of Research Publication and Reviews, 2024
This study investigates the impact of financial inclusion on the growth and development of small and medium enterprises (SMEs) in Lagos State, Nigeria. The research aims to explore the accessibility of financial services for SMEs, assess how these services affect their growth and development, and evaluate the acceptance of new financial technologies by these enterprises. Utilizing a positivist research philosophy and a deductive approach, the study employs a quantitative methodology, involving a survey of 204 SME owners in Lagos. The findings reveal that SMEs in Lagos have broad access to traditional financial services such as savings accounts and electronic payments but face limitations in accessing more specialized services like venture capital. Financial inclusion positively influences SME growth and development, with services like insurance and payment systems significantly contributing to operational efficiency and business success. Furthermore, SMEs demonstrate a positive acceptance of new financial technologies, particularly mobile banking and cybersecurity solutions, though the adoption of some advanced technologies, such as peer-to-peer lending platforms, remains limited. This study underscores the importance of enhancing financial service accessibility and promoting technological innovations to support SME growth. It provides valuable insights into the financial needs and technological readiness of SMEs in Lagos, offering implications for policymakers and financial institutions aiming to foster a more inclusive and supportivebusiness environment
2023
The study examined financial inclusion and Performance of the SMEs in Ibadan, Oyo State. The financial inclusion theories and Perking Order Theory served as the theoretical background upon which this study was based. The target population for this study was made up of business centres, grocery stores and fashion houses in the Ibadan Southwest Local Government Area, Oyo State. This study adopted a quantitative survey technique because it was more explanatory and related directly to the SMEs that were selected for the research. Data was collected through primary sources with the use of a structured questionnaire to obtain relevant information from the participants as well as secondary sources. The Statistical Package for Social Sciences software programme was used to analyze the data. From the research findings, it was discovered that performance of the selected SMEs was influenced positively using financial inclusion parameters of financial service access, usage and quality as measurement. This study concluded that SMEs are crucial to the growth of the country as they use local raw materials and technology, thereby assisting in the realization of the goal of selfreliance and poverty alleviation. Finally, the study recommended that Government and financial institutions should create a comprehensive strategy to manage the wealth creating SMEs programs they have started and programs started should be properly funded in a sustainable manner and that in improving the socioeconomic development of Nigeria such as eradicating poverty, creating jobs, advancing human development and enhancing social welfare for the people, government should formulate financial inclusion methods aimed at facilitating the SMEs performance.
Financial Inclusion and the Performance of Micro, Small and Medium Enterprises in Southwest Nigeria
2023
The effects of financial inclusion on the performance of Micro, Small and Medium Enterprises (MSMEs) and the nation at large cannot be overemphasised. Financial Inclusion (FI) has been viewed as a new approach to increase entrepreneurial opportunity and enterprise inclusiveness. Hence, the objective of this study is to examine the effects of financial inclusion on MSMEs' performance and identify the challenges faced by MSMEs in accessing formal financial services. The study adopted a cross-sectional design with a sample of 409 MSMEs. Descriptive statistic, content analysis and multivariate regression were employed to analyse and achieve the stated objectives. The results provide policy implications for advancing financial inclusion. Results on the effects of financial inclusion on MSMEs' performance revealed that financial inclusion positively and significantly drives the performance of MSMEs measured in terms of profitability and sales growth in Southwest Nigeria. On the other hand, the main challenge confronting MSMEs in accessing formal financial services as indicated by the respondents irrespective of their business types was the lack of required collateral to secure a loan. Low level of income was the second major reason indicated by the respondents why banks refused to give them credit. The interest rate on commercial bank loans is perceived as high and discourages most MSMEs operators from seeking debt finance from commercial banks. The study, therefore recommends that lending interest rate should be made attractive to encourage continuous access to loanable funds that would encourage economic agents such as the MSMEs to save and borrow to spur economic activities. More so, effort should be intensified on collateral reform in Nigeria, and movable assets such as machinery and equipment that are readily available for MSMEs can as well be used for pledges instead of real estate which may not be available.
International Journal of Economics and Financial Issues, 2022
The study aims to investigate the impact of financial inclusion on poverty alleviation among SMEs in Akwa Ibom State, Nigeria. The data collection technique employed was a self-administered questionnaire. The questionnaires were administered to a total of 295 respondents who are operators of SMEs in Akwa Ibom State, Nigeria, by using the purposive sampling technique. In analyzing the relationship among the variables, Spearman rank correlation was adopted. The study's findings revealed that financial inclusions regarding bank loans to SME operators do not correlate statistically with poverty alleviation in Akwa Ibom State. In contrast, financial inclusion regarding access to ATMs and internet banking has statistically significant correlations with poverty alleviation among SME operators in Akwa Ibom State. Hence, the policy implication of the study is that banks should reduce their interest rate to induce SME operators to access bank loans for their businesses.
SSRN Electronic Journal, 2021
Financial inclusion avails all economic units the opportunity to access financial services needed to boost economic activities. One of the objectives of financial inclusion is to provide access to finance for the poor majority who initially do not use formal financial services. The MSMEs requirement for funds is hampered by their limited access to the financial market. This study however investigated the effect of financial inclusion strategies on access to credit by micro, small and medium scale enterprises (MSMEs) in Nigeria. Data for the study were collected from the CBN Statistical bulletin for the period of 1991 to 2019. The explanatory variables used to develop a multiple regression model captured the market capitalization, pension account, insurance account, microfinance account and e-banking as strategies to financial inclusion. The Autoregressive Distributive Lag model was developed and analyzed for long and short-run dynamics of financial inclusion on access to loan and advances by the MSMEs in Nigeria. The bound test showed that financial inclusion strategies had a long-run relationship with loan and advances of the MSMEs. The coefficient of determination explained 99% of access to loans and advances by the MSMEs in Nigeria. The coefficients of regression revealed that lags of Loan and Advances to MSMEs had adverse endogenous effects on the model. More so, activities in the capital market (MKTC) and pension accounts (PA) at lag 1 have positive and significant effects on credit to MSMEs (LA) in Nigeria; but insurance accounts (IA), microfinance account (MFA) and e-banking innovations (EBDUM) creates unstable significant effects on credit to MSMEs in Nigeria. The study posits that financial inclusion strategies have a long-run impact on MSMEs with the capital market and pension funds the major enhancers of MSME funding.
The study evaluates the scope SMFEs have access to funding and examines the challenges against SMFEs accessing finance in Nigeria. Data were collected from 380 participants through a structured questionnaire designed for the study. Simple percentage, mean, standard deviation and factor analysis were employed to analyze the data. The results revealed that many of SMFEs leverage on the informal sector as a vector of inclusion. Furthermore, lack of collateral, interest rate and short payback period were found to be the most factors preventing SMFEs from accessing credit from Nigerian Microfinance banks. Therefore, authorities should act quickly to accelerate progress towards financial inclusion by distributing digital services as simple, flexible and simple alternative channels to reach our areas and rural hinterland. Additionally, financial instituti ons like microfinance banks must assimilate the objective of inclusion in their overall business plan and accept a holistic strategy to reach the financially invisible.
The growth and failure of small and medium enterprises has been a topic of discussions world over among policymakers and researchers. This study was guided by the following objectives: to examine the contributions of small medium enterprises (SMEs), to determine the challenges affecting small medium enterprises, to examine how financial inclusiveness supports the growth of small medium enterprises, and to establish the relationship between financial inclusion and growth of small medium enterprises. The study used a cross-sectional research design. Descriptive design was used and supplemented by inferential statistics. Correlation and regression analysis were adopted. The study revealed that financial inclusion is significant in supporting SME growth. The study further also revealed that the cost of acquiring and servicing financial services is high; there is also difficulty in using some of the financial services, and the way financial providers treat financial users, some lacked some degree of respect and dignity. The study recommends that financial providers should continue sensitizing the public on the available financial services beyond credit services, which are common and known. Digital financial service providers should encourage their clientele to use digitalized financial services which are cheap, secure, and risk averse. The cost of capital should also be reduced to encourage borrowing while SMEs should innovatively produce goods that can be competitive at both domestic and international markets.
Determinants of Financial Inclusion in Small and Medium Enterprises: Evidence from Ethiopia
Journal of Risk and Financial Management, 2021
The study examines the determinant factors that influence financial inclusion among small and medium enterprises (SMEs) in Ethiopia. The study uses an explanatory research design and a mixed research approach with both primary and secondary sources of data. More specifically, the study adopts a multiple linear regression model. The finding of the study reveals that; supply-side factors, demand-side factors, market opportunity, and collateral requirements have a positive effect on the firm’s access to finance. On the other hand, institutional framework factors, and the costs of borrowing negatively affect the firm’s access to finance. This study suggests concerned bodies sustain rapid and inclusive economic growth and hence eradicate extreme poverty and hunger, the policymakers must build an efficient, strong, and well-functioning financial market system that provides affordable and sustainable financial service to SMEs.