IMPACT OF FINANCIAL INCLUSION ON THE PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN GOMBE STATE

Abstract

The objective of this study is to assess the impact of financial inclusion on the performance of Micro, Small and Medium Enterprises (MSMEs) in Gombe state, Nigeria. The population of the study is 1745 registered MSMEs in Gombe state out of which the sample of 324 were computed using Taro Yamane formula and selected using convenience sampling technique. Accordingly, the study collects data using primary method with self-administered questionnaire and analyzed with Partial Least Square Structural Equation Modeling via SmartPLS software. The finding revealed that digital financing and financial literacy have significant positive effect on MSMEs’ performance in Gombe state of Nigeria. In view of the obtained result, it is recommended that governments at different levels players should invest in infrastructural development such as internet connectivity and mobile network services especially in rural and underserved area. Also, financial institutions and fintech companies should develop and offer digital financial products specifically tailored to the need of MSMEs. Lastly, there is need for financial institutions to establish mechanisms for ongoing financial education such as regular workshops, seminars and online course to ensure that MSMEs owners continue to build their financial literacy as their business grow.