Financial Inclusion as a Veritable Tool for the Performance of Small and Medium Enterprises: Empirical Evidences from Osun State, Nigeria

Abstract

Policymakers, researchers, and other stakeholders globally have been discussing the success and failure of small and medium enterprises (SMEs). Financial inclusion has been considered a fresh way to expand the distribution of cheap financing to low-income and disadvantaged groups in society, thereby facilitating the operation of commercial activities. Therefore, the aim of this study is to investigate how financial inclusion affects the performance of SMEs in Osun State, Nigeria. The study made use of primary data. Data from the respondents were gathered using a structured questionnaire. 8,923 Osun State-registered SMEs are the study's population. Through the use of a simple random sampling technique, 450 respondents made up the study's sample size. The performance of SMEs (sales growth) and the independent variable, financial inclusion dimensions (proximity, payment infrastructure, store of value, and information storage), were examined using multiple regression analysis on the data. The results showed that financial inclusion as a whole had a 71.4% significant impact on SMEs' performance. The findings also revealed that proximity (0.987), payment infrastructure (0871), stores of value (0.784), and information storage (0.691) all significantly impacted the performance of SMEs. The study came to the conclusion that the growth of these financial inclusion dimensions has an impact on SME performance in Osun State, Nigeria. Accordingly, the study recommended that the government, financial institutions, and other stakeholders continue to enhance their delivery of financial inclusion dimensions and educate the general public about the range of financial services that are accessible beyond credit services, which are well-known and widely used.