INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
Effect of Financial Inclusion on the Performance of Small and  
Medium Scale Enterprises in Ondo State  
Oluwasesin, Olayemi Deborah  
Department of Project Management, Federal University of Technology, Akure, Ondo State. Nigeria.  
DOI: https://doi.org/10.51583/IJLTEMAS.2025.1410000122  
Received: 20 October 2025; Accepted: 28 October 2025; Published: 19 November 2025  
Abstract: This study investigates the effect of financial inclusion on performance of Small and Medium Scale Enterprises in Ondo  
State. A quantitative survey research design was employed. The population for the study comprised of all registered SMEs in Ondo  
State, Nigeria. The sample size used for this study was determined using the Taro Yamane (1967) formula for finite populations.  
The study utilized 300 SMEs as sample size across Ondo State using a combination of stratified random sampling and purposive  
sampling was used. Data were collected using a structured questionnaire and were coded and analyzed using the Statistical Package  
for the Social Sciences (SPSS v30). Multiple regression analysis was used to test the study’s hypotheses. The result shows that  
financial inclusion, measured through access to formal finance and usage of financial services, does not significantly predict SME  
performance. The study also found that business environment (β = 0.145, p = 0.016) and education level of the entrepreneur (β =  
0.150, p = 0.010) significantly influence SME performance. Similarly, owners or managers with higher education levels may better  
navigate financial management, marketing, and operational decisions, enhancing performance. These findings reinforce the  
multidimensional nature of SME success, highlighting that human capital and environmental factors can moderate or enhance the  
effects of financial inclusion. The study therefore recommends that Training programs targeting SME owners, especially those with  
lower educational backgrounds, can enhance managerial and financial decision-making skills, thereby improving business outcomes  
Keywords: Financial inclusion, Performance and Small and Medium Scale Enterprises.  
I. Introduction  
Ensuring all and sundry have access to affordable and convenient financial services is a paramount issue in the present day  
economy. This has brought about financial inclusion which greater level of importance has been attached to due to its perceived  
importance as a driver of economy. Financial inclusion has enabled many organizations to deliver affordable costs to sections  
of disadvantaged and low-income sectors of the society. This has facilitated the operations of the business activities especially  
in Small and Medium Scale Enterprises [24](Jamilah & Mardiana, 2024).  
With financial inclusion, incremental and complementary solutions to tackle poverty, promote inclusive development and achieve  
the UN Sustainable Millennium Development Goals (MDGs)is guaranteed. Central Bank of Nigeria [14](CBN, 2020) emphasis  
the need to bring the unbanked population into the formal financial services net so as to access diverse range of formal financial  
services that not only meet their needs but at an affordable cost. It stressed that this can only be achieved when Nigeria adults has  
convenient opportunity to access full and affordable financial services packages. [31] (Ozili, Koomson & Danquah, 2021) in their  
Global Findex 2021 Survey, about 76 percent of adults in the world have bank accounts and about 1.4 billion adults do not have  
access toan account at financial institution or through a mobile financial services provider. Since 2010, the G-20 and the World Bank  
have led the initiative for increased financial inclusion in developing countries to help reduce poverty levels in developing and  
emerging economies. Global Partnership for Financial Inclusion [23] (GPFI 2023). The GPFI is committed to advancing financial  
inclusion globally by increasing the quality of access to as well as the use of sustainable formal financial services, thereby expanding  
opportunities for under-served and excluded households and enterprises, as one of the instruments to ensure financial well-being  
and support productivity, and helping in the achievement of the sustainable development goals (SDGs). Financial Inclusion Action  
Plan[22] (FIAP, 2023). Today, the relevance of digital finance and financial inclusion for poverty reduction and economic  
development is attracting the attention of policymakers and academics primarily because of the number of issues that persist which  
if addressed can make digital finance work better for individuals, businesses, governments, and the economy.  
In 2020, overall financial inclusion benchmark was set at 80% in 2020. But it was gathered from Enhancing Financial Innovation  
and Access[19] (EFInA 2021) data that just 64% of Nigeria adults were financially included at the end of 2020. S M E s i n  
Nigerians who have access to financial services increased from 21.6% in 2010 to an average of 70% in 2020, The Center for Financial  
Inclusion 2023, states that financial inclusion is access to a wide range of quality economic services available to customers in a cost-  
effective, convenient and flexible manner. Obviously, going by the above data, one can deduce that introduction of digital technology  
which aid financial inclusion has greatly transformed the Nigeria financial sector.  
As a result of this and in order to attain its set objectives of access to financial services by all, the Central Bank of Nigeria [12] (CBN,  
2015) has implemented a National Financial Inclusion Strategy to financially empower SMEs through affordable financial products  
and services like: Start and grow your business. These include efforts to increase domestic bank penetration, a N50 billion credit line  
for SMEs, the Market Moni program of interest-free loans for SMEs, and the Youth Entrepreneurship with Innovation (YOUWIN)  
programme. This includes the launch of the Youth Entrepreneurship Assistance Program (YESP) by Industrial Bank.  
www.ijltemas.in  
Page 1008  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
SMEs have historically been the main players in domestic economic activities, especially as providers of employment opportunities,  
and hence generators of primary and secondary sources of income for many households [27] (Mdasha, Irungu & Wachira,2018).  
However financial inclusion are being faced with various challenges in quick rolling out of affordable and relevant financial services  
in Nigeria. This includes complaints of poor digital and physical connectivity of financial devices, delays in issuance of smart cards  
and reliability of hardware infrastructure. The OECD Report of 2020 evident that over 70% of SMEs in Asian and African countries  
are facing distress syndrome due to financial exclusion syndrome which according to [24](Jamilah & Mardiana, 2024) emphasis that  
this is due to the lack of financial literacy and proper orientation for SMEs operators  
Many SMEs in Nigeria has not reach the growth stage of their life cycle due to lack of access to finance compared to loans granted  
to larger firms [20] (Ene, Amoke, Archibong, Eduno & Ogwumu, 2022). This is as a result of stringent measures posed on SMEs  
in accessing the capital that they require growing and expanding with nearly half of SMEs in developing countries indicating access  
to finance as a major constraint especially in financial services. This is a gap that needs to be critically assessed in that if assess to  
financial services are too difficult for the SMEs, then the usage dimension of financial Inclusion will not be accomplished. Therefore  
if the access and the usage is not preforming well, then the quality of the service will definitely be affected. Hence, the objective of  
this study is to determine the effect of financial inclusion on the performance of small and medium scale enterprises in Ondo State.  
II. Conceptual Review  
The concept of financial inclusion which is rooted in a broader set of economic and finance theories can be traced to the combined  
effort of earlier rural banking initiatives, development agencies, regulators, microfinance and researchers. The World Bank in its  
associated efforts in the late 1990s and early 2000s emphasized access to finance and laid out the groundwork for financial inclusion  
as a policy priority. Since its emergence in the early 2000s, it has become an integral part of global financial sector policies. It  
emphasizes the role of formal financial services in enabling individuals and enterprises to access savings, credit, payments, insurance  
and other products, thereby participating in economic activity[40] (World Bank 2020).  
Financial inclusion is re-orientating the basic essence of banking for there to be efficient participation in the formal financial system  
for productive ends and not simply about providing bank accounts.(uncdf.org). It is an inclusive initiative aimed at orientating and  
creating enabling environment for financial services. Also, the Consultative Group to Assist the Poor (CGAP) played a significant  
role. It is noted that since around 2008, CGAP has increasingly replaced the term ‘microfinance’ with ‘financial inclusion’ Centre  
for Financial Inclusion. Financial inclusion means that individuals and businesses have access to useful and affordable financial  
products and services that meet their needs transactions, payments, savings, credit and insurance delivered in a responsible and  
sustainable way[13] (CBN, 2019).  
Dimensions of Financial Inclusion  
Accessibility of Financial Services  
Accessibility refers to the ease with which SMEs can obtain or reach formal financial services. It covers factors like nearness of the  
financial service provider, cost and documentation like KYC for opening of accounts. This is to enable SMEs open business account,  
deposit money, access credit facilities, engage in payments systems without high cost and distance but inability to easily access the  
facilities can hinder the growth of their businesses [8] (Anisiuba, Ezeaku & Emengini, 2020).  
Usability of Financial Services  
It refers to the actual use of financial services by businesses owners and managers in order to enhance their businesses. The rate of  
usage is paramount to the achievement of financial inclusion objectives. This Because it is one thing to access and is another thing  
to be able to be able to utilize it[3] (Aderobaki, Falope & Aremo, 2024).  
Quality of Financial Services  
The quality of financial services is about how well the needs of the end users are been met as a result of making use of financial  
services in their business. The quality of digital financial services such as mobile banking, POS, agent banking is vital for SMEs to  
transact, pay suppliers, receive from customers and manage cash flows effectively. Poor service quality may limit the impact of  
financial inclusion on SME performance [7](Anga, Sakanko & Adamu, 2021). From the above dimensions, the concept of financial  
inclusion is established because the three dimensions are interrelated and each dimension influences performance. This is because,  
for it to be effective access must correlate with usage all because is one thing to be able to access it and another thing is to be able to  
use it and for usage to be continuous, there must be quality of the product.  
III. Theoretical Review  
Finance Growth Theory  
The study is anchored on finance-led growth theory. It emphasized the need for financial intermediaries to create an enabling  
environment for the growth and economic stability using the supply - leading or demand – following effect. The demand following  
effect based the argument that the financial system does not stimulate economic growth rather the financial systems simply react and  
affect development in the real sectors while the supply leading effect contrasts the demand following argument that financial system  
in an economy does not determine economic growth [10] (Bongomin & Ntayi, 2020).  
www.ijltemas.in  
Page 1009  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
Empirical Review  
Some empirical studies found a mixed relationship between financial inclusions and SMEs development within and outside the  
country.  
Reference [17] (Damane, & Ho Sin-Yu, 2024) in their studies examined the impact of financial inclusion of Sub-Saharan Africa  
(SSA) small and medium-sized enterprises (SMEs) on financial stability. Results show that financial inclusion of SMEs negatively  
affects stability in SSA countries, and the negative link is even stronger as levels of financial stability increase across countries.  
Our findings are consistent with the theory of excessive credit expansion or extreme financial inclusion theory, suggesting that to  
safely promote SME financial inclusion and foster financial sector stability, efforts should be directed toward improving banking  
sector risk mitigation efforts, financial sector supervision and strengthening coordination among regional financial sector  
regulators.  
Reference [27] (Mdasha, Irungu & Wachira, 2018) in their own study establish the effects of financial inclusion strategies on  
performance of small and medium enterprises in Tanzania. The target population consisted of 93,430 in three districts of Dar es  
Salaam, where a sample of 240 respondents were selected by use of purposive non-probability sampling. Questionnaires were  
administered and the data collected were analyzed by use of Statistical Package for the Social Sciences (SPSS). From the thereresults,  
it emerged that the respondents agreed that financial access point were made closer to where people live, access and use of financial  
services increased competition due to adopting new skills and technology, access and use of financial services increased profitability  
and growth of business and some of the challenges faced by SMEs in employing financial inclusion strategies were unforeseen  
market changes, not being involved in making strategies. The study recommended the sensitization of financial inclusion strategies  
to the beneficiaries and cooperation between financial institutions and SMEs in formulation of realistic strategies.  
Reference [20](Ene, Amoke, Archibong, Eduno & Ogwumu, 2022) in their studies investigated the influence of financial inclusion  
on growth of small and medium enterprises in Cross River State. The study conducted a cross sectional survey of small and medium  
scale enterprises in Calabar Metropolis using purposive sampling technique. The population of the study was one thousand two  
hundred and ninety-four (1294) SMEs in the state and a sample size of 306 was obtained for the study. The data obtained were  
analyzed using the Pearson Correlation technique and the results of the analysis revealed that financial inclusion in terms of bank  
loans and advances, access to ATM and internet banking have statistically significant correlation with growth of small and medium  
scale enterprises in Cross River State. Hence, the policy implication of the study is that banks should reduce their lending rate in  
order to induce many SMEs operators to access bank loans for their businesses. Furthermore, commercial banks and microfinance  
institutions should ensure that more bank branches are established so as to enhance bank penetration whereby many SMEs  
operators can have access to ATM machines to transact their businesses. Financial Technology (fintech) has made financial  
services more accessible to Small and Medium Enterprises (SMEs) by offering digital payment methods and alternative financing  
platforms. Because of this advancement, financial inclusion has improved, making it easier for SMEs to get loans and handle  
transactions effectively.  
Reference [36] (Stanley, Henry & Chukwuebuka, 2022) in their study investigated the effect of financial inclusions of micro,  
small and medium enterprises (MSMEs) development in Nigeria. Using statistical methods, the results show that, whereas financial  
inclusion positively and significantly impacts the operations and development of MSMEs, distance to financial services, access points  
andinfrastructural deficiency challenged fast and effective access to financial services byMSMEs 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.  
Reference [28] (Nwankwo and Onwuka, 2016), identified full financial inclusion as a prerequisite for inclusive economic  
development in Nigeria. Using the descriptive survey methodology, they employed questionnaires to generate data on financial  
inclusion from stakeholders such as Banks, Insurance, Regulators, and Telecom firms providing every household with access to a  
suite of modern financial services, including savings, credit, insurance, and payments, as well as sufficient education and support to  
help customers make good decisions for themselves. The study revealed that financial inclusion is a bold step towards inclusive  
economic development. Accordingly, they concluded that all initiatives for a nation to achieve inclusion of SMEs output in the  
sustainable economic growth, financial inclusion programme should be a compulsory policies and strategies that must be accepted,  
adopted and implemented by various stakeholders in the financial system.  
IV. Methodology  
Research Design  
A quantitative survey research design was used in this study to examine how various dimensions of financial inclusion influence  
the performance of small and medium-sized enterprises (SMEs) in Ondo State, Nigeria. This approach allows for analysis of  
relationships as well as statistical measurement among the key constructs.  
www.ijltemas.in  
Page 1010  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
Population and Sampling  
The population for the study comprised of all registered SMEs in Ondo State, Nigeria. According to the National Bureau of Statistics  
(NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN, 2025), a total of 5,483 registered SMEs  
were identified in Ondo State, each verified with a Tax Identification Number (TIN). Data were collected using a structured  
questionnaire adapted from prior validated studies  
The sample size used for this study was determined using the Taro Yamane (1967) formula for finite populations:  
N
n=  
1+N(e)2  
where N = 5,483 and e = 0.05, giving a base sample size of 373. To ensure adequate representation and accommodate potential  
non-response, a 10% adjustment (10% of 373 ≈ 37) was added, bringing the target respondents of 409. However, a total of 300  
valid responses were ultimately retrieved and analyzed due to time and logistical constraints, the retrieved response represents  
73.3% response rate, which is considered satisfactory for exploratory studies of (Anisiuba Ezeaku & Emengini, 2020).  
A
combination of stratified random sampling and purposive sampling was used. Stratified random sampling ensured fair  
representation across the three senatorial districts namely: Ondo Central, Ondo North, and Ondo South capturing the variations in  
business type, size, and location. Purposive sampling on the other hand targeted owners or managers with sufficient knowledge of  
their firms’ financial operations, ensuring valid and contextually relevant data.  
Variable Description  
Variables measured are the Dependent Variable, Independent Variables and Control Variables. The dependent variable is premised  
on performance using the growth indicators which will be measured using market performance. The independent variables are the  
financial inclusion metrics which are measured by Access to financial services and Usage of financial products. The Control  
variables are measured by Age of business and Educational background of the owners.  
Geographical Distribution of Respondents  
The sample distribution reflected the relative SME concentration in the state: Ondo Central (64%), Ondo North (20%), and Ondo  
South (16%). The Central district, especially Akure and Ondo, serves as the commercial hub with the highest density of financial  
institutions, while the North and South districts provide balanced regional coverage.  
Table 1: Distribution of Respondents by Senatorial District (N = 300)  
Senatorial District  
Central  
Frequency  
Percent (%)  
64.0  
192  
60  
North  
20.0  
South  
48  
16.0  
Total  
300  
100.0  
Note. The Central District contains the largest SME concentration due to its commercial hubs in Akure and Ondo.  
Tables 2 and 3 present the distribution of SMEs by business type and operating environment, confirming the sample’s diversity.  
Table 2: Distribution of Respondents by Type of Business (N = 300)  
Type of Business  
Trading  
Frequency  
Percent (%)  
32.0  
96  
64  
Manufacturing  
Agriculture  
Services  
21.3  
84  
28.0  
24  
8.0  
Others  
32  
10.7  
Total  
300  
100.0  
www.ijltemas.in  
Page 1011  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
Table 3: Distribution of Respondents by Business Environment (N = 300)  
Business Environment Frequency  
Urban 169  
Percent (%)  
56.3  
Semi-urban  
Rural  
60  
71  
20.0  
23.7  
Total  
300  
100.0  
Reliability and Validity  
Reliability was assessed using Cronbach’s alpha, with coefficients ranging from 0.662 to 0.905, indicating satisfactory to excellent  
internal consistency across constructs. This confirms the instrument’s stability and internal coherence for measuring financial  
inclusion and SME performance.  
Table 4: Reliability Statistics for Study Constructs  
Construct  
Cronbach’s α  
0.905  
Access to Formal Finance  
Usage of Financial Services  
SME Performance  
0.662  
0.695  
Note. α ≥ 0.70 indicates good internal consistency; values above 0.60 are adequate for exploratory studies.  
Data Collection  
Trained field enumerators were employed to administered the questionnaires across major Local Government Areas (LGAs) in the  
three senatorial districts: Akure South, Akure North, and Ondo West (Central); Owo and Ose (North); and Okitipupa and Ile-Oluji  
(South). These LGAs were selected due to their high SME concentration and accessibility to financial institutions.  
Data Analysis  
Collected data were coded and analyzed using the Statistical Package for the Social Sciences (SPSS v30). Multiple regression  
analysis was used to test the study’s hypotheses.  
The model summary indicated that financial inclusion variables explained 5.3% of the variance in SME performance (R² = 0.053,  
p < 0.01). The ANOVA results confirmed the model’s statistical significance (F(5,294) = 3.315, p = 0.006). Among the predictors,  
business environment (β = 0.145, p = 0.016) and education level (β = 0.150, p = 0.010) had significant positive effects on SME  
performance, while access to formal finance and usage of financial services were not significant.  
Table 5: Model Summary of Regression Analysis (Dependent Variable: SME Performance)  
Model  
R
R²  
Adjusted R²  
–0.001  
Std. Error of Estimate Durbin–Watson  
1
2
0.076  
0.231  
0.006  
0.053  
0.82471  
0.80881  
—
0.037  
0.216  
Note. Model 2 includes control variables: business age, education level, and business environment.  
Table 6: ANOVA Results of Regression Model (Dependent Variable: SME Performance)  
Model  
1
Source  
Sum of Squares  
1.164  
df  
Mean Square  
0.582  
0.680  
—
F
Sig.  
0.0.426  
—
Regression  
Residual  
Total  
2
0.856  
—
202.002  
203.167  
10.842  
297  
299  
5
—
—
2
Regression  
Residual  
Total  
2.168  
0.654  
—
3.315  
—
0.0.006  
—
192.325  
203.167  
294  
299  
—
—
www.ijltemas.in  
Page 1012  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
Note. Model 2 shows a statistically significant relationship between the predictors and SME performance (p < .01).  
Table 7: Regression Coefficients for Predictors of SME Performance  
Predictor  
Unstandardized B  
2.630  
Std. Error  
0.777  
Standardized Beta  
t
Sig.  
(Constant)  
—
3.385  
–0.382  
0.001  
0.703  
Access to Formal –0.037  
0.096  
–0.022  
Finance  
Usage of Financial  
Services  
–0.057  
0.162  
–0.022  
–0.355  
0.723  
Business Age  
–0.074  
0.061  
0.059  
0.061  
–0.069  
0.145  
0.150  
–1.207  
2.430  
2.594  
0.229  
0.016  
0.010  
Business Environment 0.144  
Education Level 0.159  
Note. Significant predictors at p < .05 include business environment and education level.  
Table 8: Residual Statistics for Regression Model  
Statistic  
Predicted Value 2.294  
Residual –1.356  
Minimum  
Maximum  
3.356  
Mean  
2.733  
0.000  
0.000  
Std. Deviation  
N
0.190  
0.802  
1.000  
300  
300  
300  
1.593  
Std. Predicted –2.305  
3.269  
Value  
Std. Residual  
–1.676  
1.969  
0.000  
0.992  
300  
Note. Residuals are approximately normally distributed, supporting regression assumptions.  
V. Discussion of Findings  
The study utilized 300 SMEs as sample size across Ondo State, with the majority located in the Ondo Central senatorial district  
(64%), followed by the Ondo North senatorial district (20%) and Ondo South senatorial district (16%). This distribution reflects  
the concentration of commercial activities and financial institutions in the Central senatorial district of the state, particularly in  
Akure and Ondo town, which serve as economic hubs. The geographic spread ensures that the study captures variations in financial  
inclusion across urban, semi-urban, and rural areas, providing a balanced regional perspective.  
Regarding business type, trading (32%) and agriculture (28%) are dominant among the study sample, followed by manufacturing  
(21.3%), services (8%), and others (10.7%). The high percentage of trading and agricultural SMEs aligns with prior studies on  
SMEs composition in Nigeria [35](SMEDAN, 2020) indicating that informal and small-scale enterprises remain prominent.  
Furthermore, 56.3% of SMEs operate in urban areas, highlighting the tendency for SMEs to cluster near financial institutions,  
markets, and infrastructure which are conditions conducive to financial inclusion and business growth.  
Instrument Reliability and Validity  
In other to confirm that the study instruments are reliable, reliability test through the use of Cronbach’s alpha was employed and  
the coefficients ranged from 0.662 to 0.905. Specifically, access to formal finance achieved an excellent reliability score of α =  
0.905, while usage of financial services and SME performance had reliability score of α = 0.662 and α = 0.695 respectively. These  
results suggest that the constructs used in measuring financial inclusion and SME performance are internally consistent and suitable  
for capturing the variability among respondents. The pilot testing and expert review further ensure content and face validity,  
enhancing the credibility of the data collected.  
Impact of Financial Inclusion on SME Performance  
The regression analysis (Tables 5–7) shows that financial inclusion, measured through access to formal finance and usage of  
financial services, does not significantly predict SME performance (p > 0.05). This is an interesting finding, as it contradict the  
commonly held assumption that improved access to financial services directly drives SME growth [17](Damane & Ho Sin-Yu,  
2024) . A possible explanation is that while SMEs may have access to banking facilities, other structural and operational constraints  
such as limited collateral, poor financial literacy, high-interest rates, and irregular cash flows may limit the practical benefits of  
financial inclusion. This observation aligns with recent literature [36](Stanley, Henry & Chukwuebuka 2022) that emphasizes that  
access alone is insufficient without complementary capacity-building and supportive business ecosystems.  
www.ijltemas.in  
Page 1013  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
Role of Business Environment and Education Level  
The study found that business environment (β = 0.145, p = 0.016) and education level of the entrepreneur (β = 0.150, p = 0.010)  
significantly influence SME performance. SMEs operating in favorable environments, such as urban centers with better  
infrastructure, market access, and institutional support, are more likely to grow and sustain profitability [27] (Mdasha Irungu &  
Wachira, 2018). Similarly, owners or managers with higher education levels may better navigate financial management, marketing,  
and operational decisions, enhancing performance. These findings reinforce the multidimensional nature of SME success,  
highlighting that human capital and environmental factors can moderate or enhance the effects of financial inclusion.  
VI. Conclusion  
In conclusion, while access to financial services and usage of financial services alone did not significantly drive SME performance,  
the business environment and education level of owners is of paramount to its determinants. These findings underscore the  
importance of integrated interventions combining financial inclusion with education, infrastructure, and supportive policies to  
enhance SME growth in Ondo State.  
VII. Recommendations  
1. Supportive Business Environment is Crucial: Infrastructure development, market linkages, and regulatory support in North and  
South districts could help SMEs leverage financial services effectively.  
2. Entrepreneur Education and Capacity Building: Training programs targeting SME owners, especially those with lower  
educational backgrounds, can enhance managerial and financial decision-making skills, thereby improving business outcomes.  
References  
1. ADB. (2013). Annual report 2013. African Development Bank.  
2. Adebiyi, M. (2018). Financial inclusion: Lesson from the Asian Tigers. Inlaks Information Systems Integration, Lagos.  
Retrieved from https://inlaks.com  
3. Aderobaki, A. V., Falope, F. J., & Aremo, A. T. (2024). Effect of financial inclusion on performance of financial  
institutions in Nigeria. UBS Journal of Business and Economic Policy, 2(3), 14–28.  
4. Ainun, R. N., Tubastuvi, N., Purwidianti, W., & Zamakhsyari, L. (2024). Enhancing MSME: Exploring the relationship  
between financial literacy, financial inclusion, and capital access for improved performance. Airlangga Journal of  
Innovation Management, 5(1), 1–16.  
5. Akanbi, T. A., Oladejo, M. O., & Oyeleye, O. A. (2022). Impact of fintech (financial technologies) usage on the financial  
and non-financial performance of small and medium scale enterprises in Nigeria. International Journal of Academic  
Research in Accounting, Finance and Management Sciences, 12(2), 306–316.  
6. Amnas, M. B., Selvam, M., & Parayitam, S. (2024). FinTech and financial inclusion: Exploring the mediating role of  
digital financial literacy and the moderating influence of perceived regulatory support. Journal of Risk and Financial  
Management, 17, 108. https://doi.org/10.3390/jrfm17030108  
7. Anga, R. A., Sakanko, M. A., & Adamu, A. M. (2021). Modelling the effect of financial inclusion on SMEs in Nigeria.  
AJEC, 2(1), 33–43.  
8. Anisiuba, C. A., Ezeaku, H. C., & Emengini, E. S. (2020). Effect of financial inclusion on entrepreneurial growth in retail  
and wholesale sub-sectors: Evidence from Nigeria. The Business and Management Review, 11(1).  
9. Ashenafi, B. B., & Dong, Y. (2022). Financial inclusion, fintech, and income inequality in Africa. FinTech, 1, 376–387.  
https://doi.org/10.3390/fintech1040028  
10. Bongomin, G. O. C., & Ntayi, J. (2020). Trust: Mediator between mobile money adoption and usage and financial  
inclusion. Social Responsibility Journal, 16(8), 1215–1237. https://doi.org/10.1108/SRJ-01-2019-0011  
11. CBN. (2013). Measuring Nigeria’s financial inclusion strategy. Retrieved from https://www.cbn.gov.ng  
12. CBN. (2015). Financial stability report. Central Bank of Nigeria.  
13. CBN. (2019). Financial stability report. Central Bank of Nigeria.  
14. CBN. (2020). National financial inclusion strategy: Summary report. Central Bank of Nigeria.  
15. Central Bank of Nigeria. (2023). Financial inclusion strategy. Abuja, Nigeria.  
16. Centre for Financial Inclusion. (2013). Financial inclusion: How best can it be strengthened? Business World Intelligence.  
Retrieved from https://www.businessworld.com  
17. Damane, M., & Ho, S.-Y. (2024). Financial inclusion of small and medium-sized enterprises and financial stability:  
Evidence from SSA countries. MPRA Paper No. 121093.  
18. EFInA. (2013). Agent banking in Nigeria: Factors that would motivate merchants to engage. Enhancing Financial  
Innovation and Access (EFInA).  
19. EFInA. (2021). Access to financial services in Nigeria: 2021 survey. Enhancing Financial Innovation and Access (EFInA).  
20. Ene, E. E., Amoke, C. V., Archibong, I. A., Eduno, E. B., & Ogwumu, I. (2022). Financial inclusion and growth of small  
and medium enterprises in Cross River State, Nigeria. Asian Journal of Economics, Finance and Management, 4(1), 215–  
221.  
www.ijltemas.in  
Page 1014  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue X, October 2025  
21. Eton, M., Mwosi, F., Okello-Obura, C., Turyehebwa, A., & Uwonda, G. (2021). Financial inclusion and the growth of  
small medium enterprises in Uganda: Empirical evidence from selected districts in Lango sub-region. Research Square,  
1–27.  
22. Financial Inclusion Action Plan (FIAP). (2023). Financial inclusion action plan (FIAP) for 2024–2026.  
23. Global Partnership for Financial Inclusion (GPFI). (2023). United Nations Secretary-General’s Special Advocate for  
Inclusive Finance for Development (UNSGSA) and Honorary Patron of the G20 GPFI.  
24. Jamilah, H. M., & Mardiana, L. (2024). The role of fintech and financial literacy on MSME performance: Study on F&B  
MSMEs in Surabaya. UTSAHA: Journal of Entrepreneurship, 3(2), 36–46. https://journal.jfpublisher.com/index.php/joe  
25. Khalaf, L., & Wadi, R. A. (2023). Fintech and financial inclusion: Evidence from MENA countries. Sustainability, 1–15.  
https://doi.org/10.3390/su15032171  
26. Lukuma, C. P., Marty, R., & Muhumuza, F. (2019). Financial inclusion and micro, small and medium enterprises  
(MSMEs) growth in Uganda. Journal of Innovation and Entrepreneurship, 8(15), 1–20.  
27. Mdasha, Z., Irungu, D., & Wachira, M. (2018). Effect of financial inclusion strategy on performance of small and medium  
enterprises: A case of selected SMEs in Dar es Salaam, Tanzania. Journal of Strategic Management, 2(1), 51–70.  
28. Nwankwo, O., & Nwankwo, N. O. (2014). Sustainability of financial inclusion to rural dwellers in Nigeria: Problems and  
way forward. Research Journal of Finance and Accounting, 5(5), 24–31.  
29. Nwankwo, O., & Onwuka, E. (2016). Financial inclusion and economic growth in Africa: Insight from Nigeria. European  
Journal of Business and Management, 7(35), 71–80. Retrieved from https://www.iiste.org  
30. Olowe, F. T., Moradeyo, O. A., & Babalola, A. T. (2013). Empirical study of the impact of microfinance banks on MSMEs  
growth in Nigeria. International Journal of Academic Research in Economics and Management Sciences, 2(6), 116–127.  
31. Ozili, P. K. (2021, October). Financial inclusion research around the world: A review. Forum for Social Economics, 50(4),  
457–479. Routledge.  
32. Peter, J. C., & Nnunduma, E. S. (2024). Financial technology and performance of small and medium enterprises: Evidence  
from Dares Salaam City, Tanzania. AJASSS, 6(1), 53–68.  
33. Salman, A. Y., Ayo-Oyebiyi, G. T., & Emenike, O. A. (2015). Influence of financial inclusion on small and medium  
enterprises growth and development in Nigeria. International Journal in Management and Social Sciences, 3(4), 390–401.  
34. SMEDAN & NBS. (2013). Micro, small and medium enterprises (MSMEs) collaborative survey report.  
35. SMEDAN & NBS. (2020). Micro, small and medium enterprises (MSMEs) survey report.  
36. Stanley, O. O., Henry, O. E., & Chukwuebuka, G. O. (2022). Financial inclusion and micro, small and medium enterprises  
(MSMEs) development in Nigeria. International Journal of Innovation in Engineering, 2(2), 42–53.  
37. Syauqi, A., Suryani, E., & Nugraha, I. N. (2023). The effect of financial technology (fintech) on the development of SMEs  
with financial inclusion as a mediation variable: Study on SMEs’ creative economic sector in Lombok. International  
Journal of Multicultural and Multireligious Understanding, 10(4), 683–696. http://dx.doi.org/10.18415/ijmmu.v10i4.4749  
38. Udoh, E., & Ene, E. E. (2015). Commercial banks credit and growth of small and medium scale enterprises in Nigeria.  
International Journal of Social Science and Sustainable Development, 5(2), 54–63.  
39. Usman, M. H., & Ibrahim, M. A. (2023). The mediating effect of financial inclusion in the relationship between fintech  
and MSMEs performance in Nigeria: A conceptual framework. Creative Business Research Journal, 3(1), 224–230.  
40. World Bank. (2020). Access to financial services in Nigeria: 2019 survey. Washington, D.C.: World Bank.  
www.ijltemas.in  
Page 1015