EXPLORING THE ROLE OF FINANCIAL TECHNOLOGY IN TRANSFORMING SMALL AND MEDIUM ENTERPRISES IN NIGERIA

Abstract

Small and Medium Enterprises (SMEs) in Nigeria have long faced limited access to affordable financial services, which hinders their growth, particularly in underserved regions. This research investigates how Financial Technology (FinTech) has influenced SME development in Nigeria between 2014 and 2024. Using decade-long trend analysis and empirical data from national surveys, FinTech platform reports, and central banking statistics, the study evaluates adoption rates, credit access, and sectoral transaction volumes across agriculture, retail, and manufacturing. The findings reveal that while SME FinTech usage rose from 6% in 2014 to 42% in 2024, digital loan penetration remained low at only 12%, and rural coverage lagged significantly, with Northern Nigeria accounting for just 35% of total FinTech access. Furthermore, despite exponential investment growth reaching $1.26 billion in 2022, infrastructure gaps, regulatory overlaps, and cybersecurity threats continue to limit the inclusive potential of FinTech. The study recommends regulatory harmonization between the Central Bank of Nigeria and the Securities and Exchange Commission, expanded rural broadband investment, SME-focused digital literacy programs, and fiscal incentives for inclusive FinTech innovations. These interventions are essential for translating Nigeria’s FinTech expansion into meaningful economic development for its most vital business segment.