UNLOCKING THE GROWTH OF MICRO, SMALL, AND MEDIUM ENTERPRISES IN NIGERIA THROUGH ACCESS TO INNOVATIVE FUNDING: THE MEDIATING ROLE OF FINANCIAL LITERACY

Authors

  • Ejike Ifeyinwa J. Department of Management, University of Nigeria
  • Anthony A. Igwe Department of Management, University of Nigeria - Enugu Campus
  • Wilfred Isioma Ukpere Department of Industrial Psychology and People Management, University of Johannesburg
  • Francis E. Monyei Department of Industrial Psychology and People Management, University of Johannesburg

DOI:

https://doi.org/10.18623/rvd.v22.n4.4611

Keywords:

Financial Literacy, Peer-To-Peer Financing, Micro Small Medium Enterprises` Growth, Fintech, Structural Equation Modelling, Innovating Funding

Abstract

Access to innovative funding persists as a challenge for Micro, Small, and Medium Enterprises (MSMEs). Majorly, in developing countries like Nigeria where the conventional credit systems are often stiff and inaccessible. This study delves into the crucial role of financial literacy as a mediating variable in the relationship between access to Peer-to-Peer (P2P) financing and the growth of MSMEs in Enugu State, Nigeria. The study employed descriptive survey research design while structured questionnaire was utilized in collecting data from 301 owners of registered MSMEs in Enugu state. Adopting validated scales from extant literature, the variables were measured, and data analyzed using Structural Equation Modelling (SEM) with Smart PLS 4.0. Results show that while access to P2P financing significantly affects MSME growth (β = 0.432, p < 0.001), financial literacy shows positive and significant effect on MSME growth (β = 0.394, p < 0.001). Furthermore, the findings indicate the mediating effect of financial literacy in the nexus between access to P2P financing and MSME growth (indirect effect = 0.266, p < 0.001), suggesting that financially literate MSME owners are able to maximize the alternative financing mechanisms for business growth. These findings emphasize the strategic relevance of improving financial literacy of MSME owners to enhance financing outcomes and the growth of the business. However, their effectiveness is significantly enhanced when MSMEs owners demonstrate financial astuteness to access the platform effectively. The study provides useful ideas for policymakers, development agencies, as well as fintech providers by contributing to fintech and entrepreneurship literature.

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Published

2025-11-28

How to Cite

J., E. I., Igwe, A. A., Ukpere, W. I., & Monyei, F. E. (2025). UNLOCKING THE GROWTH OF MICRO, SMALL, AND MEDIUM ENTERPRISES IN NIGERIA THROUGH ACCESS TO INNOVATIVE FUNDING: THE MEDIATING ROLE OF FINANCIAL LITERACY. Veredas Do Direito, 22, e224611. https://doi.org/10.18623/rvd.v22.n4.4611

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Vol. 22 (2025): Veredas do Direito, v. 22, 2025

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