Financial inclusion and the growth of micro, small and medium enterprises in Nigeria

Abstract

This study used Nigeria Enterprise Survey Data (2014) and adopted robust ordinary least squares model anchored on neoclassical growth theory to examine the impact of financial inclusion on enterprise growth in Nigeria. It was found that with improved financial inclusion, there would be about 0.101% rise in Nigeria's enterprise growth. Moreover, business environmental factors specific to enterprises such as total annual cost of security, total cost of electricity, number of power outages experienced by establishment in a typical month, high tax rates, political instability, and corruption were shown to have negative significant effect on enterprise growth in Nigeria, however, value of loss due to power outages has insignificant negative effect. In another vein, other factors relating to capital and labour inputs, and enterprise size significantly encourage enterprise growth in Nigeria. The study recommended that government should encourage more policies that would support the growth of MSMEs in Nigeria.