Financial Innovation and Performance of Small and Medium Scale Enterprises in Anambra State, Nigeria

Abstract

This study explored how financial innovation impacts the performance of small and medium-sized enterprises (SMEs) in Anambra State, Nigeria. It specifically looked at the influence of Point of Sale (POS) systems, automated teller machines, and digital savings, on the performance of these SMEs. The research reviewed relevant conceptual, theoretical, and empirical literature, grounding itself in technological innovation theory. A survey research design was used, targeting a population of 6,819 SME operators throughout Anambra State. By applying the Taro Yamani technique, a sample of about 378 respondents was selected. To gather data, structured questionnaires were created using a 4-point Likert scale, ranging from Strongly Agree (4) to Strongly Disagree (1), to reduce bias and accurately capture field data. To ensure both content and face validity, the questionnaire was reviewed by specialists and experts in item analysis and research methodology from the Department of Entrepreneurial Studies. The reliability of the instrument was confirmed through a test-retest method conducted with 30 SME operators in Delta State. The collected data were analyzed using descriptive statistics, and hypotheses were tested with multiple regression analysis. The results showed that POS systems significantly enhance SME performance by improving transaction efficiency and customer convenience. The study also found that automated teller machines positively affect SME performance. Additionally, digital savings are shown to significantly boost the performance of SMEs. In conclusion, the study highlights that financial innovation is a key driver for enhancing SME performance in Anambra State. Therefore, it is recommended that financial institutions and government agencies work towards promoting the broader adoption of these innovations by improving digital infrastructure, lowering transaction costs, and implementing targeted digital literacy programs.