Linking Financial Inclusion on the Business Performance: The Case of Micro and Small Enterprises (original) (raw)
Related papers
The effect of financial inclusion on the performance of micro enterprises
This study set out to examine The Effect of Financial Inclusion on the Performance of Micro Enterprises. Looking at the numerous benefits and credits awarded to MSMEs in all economies, these MSMEs are still backward and are faced with a good number of challenges and difficulties especially the third world economies with Cameroon being no exception.
2019
Micro, Small and Medium Enterprises (MSMEs) are being looked upon by an economy as the drivers for its growth, sustainability and development. They play a critical role towards a country’s employment generation, exports and empowerment. However, they face a number of problems, such as, absence of adequate and timely banking finance, limited capital and knowledge, non-availability of suitable technology and low production capacity amongst others. Financial inclusion is the process of providing financial services to the weaker and disadvantaged sections of the economy. It thus becomes imperative to study the concept of financial inclusion with respect to MSMEs, since MSMEs could be considered as the weaker segment as compared to their larger counterparts. Objectives: The objective of this research is to ascertain the relationship between financial growth stages of MSMEs and financial inclusion. The research also seeks to examine the relationship between financial literacy amongst MSME...
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.
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.
International Journal of Economic Research and Financial Accounting (IJERFA)
This study aims to analyze the effect of financial inclusion, financial literacy, and financial behavior on company performance in the MSME study in Makassar. Company performance is an achievement (result) obtained through human resources with the division of activities in the form of tasks, roles and responsibilities to achieve company goals. Seeing the potential of micro, small and medium enterprises which are very promising but neglecting financial management is the phenomenon behind this research. This study uses an associative approach. The population and samples are 30 micro, small and medium enterprises in Makassar City. The research data is primary data from respondents which are then analyzed using multiple linear regression techniques. The results of the study using multiple linear regression show that financial inclusion has no significant and positive effect on company performance. Financial literacy has a significant and positive effect on company performance. Financial...
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
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.
Purpose: The study sought to examine the impact of financial literacy and financial inclusion on small businesses' overall performance with special reference to Southwest Nigeria. Methods: Descriptive survey research sketch was adopted for this study, while the purposive sampling method was employed to choose forty small scale businesses registered with SMEDAN from each state capital of South Western of Nigeria that engaged in petty trading, bakeries, block-making, soup-making, tailoring, and agro-allied, totaling 240 participants as a sample size for the study. Data were collected by using a closed-ended questionnaire designed for the study, while simple percentage, mean, standard deviation, Pearson Product Moment Correlation (PPMC), and Ordinary Least Square (OLS) was used to analyze the data. Results: The findings disclose that financial literacy and financial inclusion jointly and independently affect small businesses' performance. It revealed a positive and significant relationship between financial literacy and financial inclusion. However, the study depicts that majority of business operators did not have financial knowledge such as working capital management, accounting records system, financial reporting, cashbook maintenance, income statement, daily cash reconciliation, internal control on cash, and cash budget. Also, the study confirmed that the majority of small business entrepreneurs are financially excluded from micro-financing, emergency loans, employ purchase financing, business bank loans, and micro-insurance plan Services.
International Journal of Business Management and Processes (ISSN 2616-3209), 2021
The study sought to identify factors affecting financial inclusion among owners of small and medium-sized enterprises in Nairobi County, Kenya. The specific objectives were to: determine the effect of financial literacy, demographic characteristics, and information asymmetry on financial inclusion among small and medium enterprises owners in Nairobi County, Kenya. The analysis adopted a descriptive research design and targeted all of Nairobi County's registered SMEs which were 312,981. The respondents included owners of the SMEs. The sample was 384 owners who were selected using stratified random sampling. The study used primary data that was collected using structured questionnaires. Findings indicated that financial literacy has a positive and significant effect on financial inclusion among SMEs owners (β= .353, P =.000), demographic characteristics have a positive and significant effect on financial inclusion among SMEs owners (β= .628, P = .000), information asymmetry has a negative and significant effect on financial inclusion among SMEs owners (β=-.488, P = .000) and combined, financial literacy, demographic characteristics, and information asymmetry were significant (adjusted R2=0.678; F=202.750; P=0.000<0.05). The study concluded that demographic characteristics have the greatest effect on financial inclusion, followed by financial literacy and lastly information asymmetry. Based on the findings, the study recommended that SMEs owners should seek financial knowledge; the government should pass a statute that requires financial institutions to publish information regularly; and should ensure that all SMEs are financially included to enable them access credit easily and make sound financial decisions.
The Journal of Asian Finance, Economics and Business, 2020
This study aims to analyze the influence of financial inclusion on micro-, small-, and medium-sized enterprises' (MSMEs) performance and examine the mediation role of financial intermediation and access to capital. The object of this study is MSMEs in Malang, Indonesia. The sample consists of 100 MSME actors in Malang City, which is determined using Roscoes theory. The data is collected using Simple Random Sampling method, by distributing questionnaire measured with Likert scales. The hypotheses proposed in this study are examined using Partial Least Square (PLS) model. The results of this study show that financial inclusion influences MSMEs' performance both directly and indirectly through mediation from financial intermediation and access to capital. The direct influence means that the efforts to increase access to financial services, especially access to credit financing for MSMEs, will be able to increase market share, number of workers, sales, as well as profit of the MSMEs. Increased financial inclusion has a major impact on improving MSMEs' performance through financial intermediation compared to access to capital. This means that the increase of financial access for MSMEs followed by an increase in financial intermediation in the form of a financial service approach to MSMEs will improve MSMEs' performance.