EFFECT OF FINTECH SERVICES ON SMALL BUSINESS GROWTH IN NIGERIA
A RESEARCH PROJECT
BY
[MY FULL NAME]
MATRICULATION NUMBER: [MATRIC NUMBER]
DEPARTMENT OF [DEPARTMENT]
FACULTY OF [FACULTY]
[NAME OF INSTITUTION]
[MONTH, YEAR]
CERTIFICATION
This is to certify that this research project titled “Effect of Fintech Services on Small Business Growth in Nigeria” was carried out by me in the Department of [Department], Faculty of [Faculty], [Name of Institution], in partial fulfilment of the requirements for the award of [Degree].
The work has been examined and approved as meeting the academic requirements of the institution.
____________________________
Project Supervisor
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Head of Department
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External Examiner
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I declare that this research project titled “Effect of Fintech Services on Small Business Growth in Nigeria” is my original academic work, except where the ideas, findings and materials of other authors have been appropriately acknowledged.
I have consulted relevant academic and institutional sources in developing the study and have presented the research findings and analysis in accordance with the methodology adopted for the project.
DEDICATION
I dedicate this research project to God Almighty for the strength and opportunity to complete my academic work.
I also dedicate it to my family, whose support and encouragement have contributed greatly to my academic journey.
ACKNOWLEDGEMENTS
I sincerely acknowledge God Almighty for giving me the strength, wisdom and determination to complete this research project.
I appreciate my supervisor for the guidance, corrections and academic direction provided throughout the research process. The comments and recommendations received during the development of this work helped me improve the quality and organisation of the study.
I also appreciate the lecturers in the Department of [Department] for the knowledge and academic foundation they have provided throughout my programme.
My appreciation also goes to my family and friends for their encouragement and support. I am grateful to everyone who contributed directly or indirectly to the completion of this research project.
ABSTRACT
This study examined the effect of fintech services on small business growth in Nigeria. I focused on major fintech-enabled services including digital payments, point-of-sale services, mobile financial services, digital financial records and access to fintech-enabled financing. The study was motivated by the increasing use of digital financial services by Nigerian businesses and the need to determine whether the adoption of these services contributes to measurable business growth.
I adopted a quantitative survey research design for the study. The study focused on small-business operators in Nigeria, with the empirical model structured around 200 respondents and 180 valid responses. For the purpose of this research project, the Chapter Four dataset was modelled/simulated to demonstrate the statistical analysis and does not represent responses actually collected from named individuals or businesses. I used descriptive statistics, Pearson correlation and multiple regression to examine the relationship between fintech services and indicators of small-business growth.
The modelled findings indicated a positive relationship between fintech service adoption and small-business growth. Digital payment services, POS services, mobile financial services and fintech-enabled access to finance were positively associated with business growth in the modelled analysis. The regression results indicated that the combined fintech-service variables explained a substantial proportion of the variation in small-business growth. The results also indicated that transaction charges, network problems, fraud risks and digital-literacy challenges remain important concerns for small businesses using fintech services.
I concluded that fintech services can contribute to small-business growth by improving payment convenience, transaction efficiency, financial record keeping and access to financial services. However, the benefits depend on reliable infrastructure, reasonable transaction costs, effective consumer protection, cybersecurity and appropriate digital literacy. I recommended that fintech companies improve service reliability and customer support, while small-business owners should strengthen digital financial management and security practices. I also recommended that regulators continue to develop policies that encourage innovation while protecting businesses and consumers.
Keywords: Fintech, financial technology, small businesses, digital payments, POS, financial inclusion, business growth, Nigeria.
TABLE OF CONTENTS
Title Page
Certification
Declaration
Dedication
Acknowledgements
Abstract
Table of Contents
List of Tables
List of Figures
List of Abbreviations
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Objectives of the Study
1.5 Research Questions
1.6 Research Hypotheses
1.7 Significance of the Study
1.8 Scope of the Study
1.9 Operational Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
2.1 Conceptual Review
2.2 Concept of Fintech
2.3 Fintech Services in Nigeria
2.4 Digital Payment Services
2.5 Point-of-Sale Services
2.6 Mobile Financial Services
2.7 Digital Financial Records
2.8 Fintech-Enabled Financing
2.9 Concept of Small Business
2.10 Concept of Business Growth
2.11 Fintech and Small Business Growth
2.12 Theoretical Review
2.13 Technology Acceptance Model
2.14 Diffusion of Innovation Theory
2.15 Financial Inclusion Perspective
2.16 Empirical Review
2.17 Gap in Literature
2.18 Conceptual Framework
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research Design
3.2 Area of the Study
3.3 Population of the Study
3.4 Sample Size
3.5 Sampling Technique
3.6 Sources of Data
3.7 Instrument for Data Collection
3.8 Validity of the Instrument
3.9 Reliability of the Instrument
3.10 Method of Data Collection
3.11 Method of Data Analysis
3.12 Model Specification
3.13 Ethical Considerations
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION
4.1 Nature of the Modelled Dataset
4.2 Questionnaire Distribution and Response
4.3 Demographic Characteristics
4.4 Business Characteristics
4.5 Fintech Usage
4.6 Descriptive Analysis
4.7 Correlation Analysis
4.8 Regression Analysis
4.9 Test of Hypotheses
4.10 Discussion of Findings
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Summary of Findings
5.3 Conclusion
5.4 Recommendations
5.5 Contribution to Knowledge
5.6 Limitations of the Study
5.7 Suggestions for Further Studies
References
Appendix
LIST OF TABLES
Table 4.1: Questionnaire Distribution and Response
Table 4.2: Gender Distribution
Table 4.3: Age Distribution
Table 4.4: Educational Qualification
Table 4.5: Business Sector
Table 4.6: Years of Business Operation
Table 4.7: Number of Employees
Table 4.8: Fintech Services Used
Table 4.9: Frequency of Fintech Usage
Table 4.10: Descriptive Statistics of Fintech Services
Table 4.11: Descriptive Statistics of Small Business Growth
Table 4.12: Correlation Matrix
Table 4.13: Model Summary
Table 4.14: Analysis of Variance
Table 4.15: Regression Coefficients
Table 4.16: Summary of Hypotheses Testing
LIST OF ABBREVIATIONS
CBN – Central Bank of Nigeria
DFS – Digital Financial Services
Fintech – Financial Technology
MSME – Micro, Small and Medium Enterprise
NBS – National Bureau of Statistics
POS – Point of Sale
SME – Small and Medium Enterprise
TAM – Technology Acceptance Model
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The development of financial technology has significantly changed the way financial services are delivered in Nigeria. Businesses that previously depended heavily on cash transactions and conventional banking channels can now receive payments, transfer money, manage financial records and access some financial services through digital platforms.
I consider fintech particularly important to small businesses because these businesses often operate with limited financial resources and need convenient methods of receiving payments and managing their daily transactions. A small retailer, restaurant, pharmacy, fashion business, transport operator or service provider can now accept electronic payments without depending entirely on cash.
The Central Bank of Nigeria has recognised financial technology as an important part of financial inclusion and has promoted digital financial services as part of efforts to expand access to financial services. The CBN has also identified MSMEs as one of the priority groups within its financial-inclusion strategy.
The Nigerian payments environment has experienced substantial growth in electronic transactions. According to the CBN’s published payment-channel information, as of June 30, 2024, web transfers accounted for 51.91% of the volume of non-cash retail payment transactions, while POS accounted for 28.53% and mobile channels accounted for 15.58%.
This development is important for small businesses because payment systems influence how businesses interact with customers. Customers increasingly expect businesses to accept electronic payments, particularly when they do not have sufficient cash available.
Fintech services also extend beyond payments. Digital platforms can provide business accounts, transaction records, financial management tools, digital lending and other services. These services can potentially improve the ability of small businesses to manage working capital and make financial decisions.
The Central Bank of Nigeria’s Payments System Vision 2025 identified electronic payment adoption, safety, reliability, resilience, financial inclusion and economic growth among the objectives of Nigeria’s payments-system development.
The relationship between financial technology and small-business performance has also received attention in academic research. Effiom and Edet found that financial innovation had a positive and significant effect on SME productivity in Nigeria. Their study considered financial instruments including POS, internet banking, electronic funds transfer, instant payments and mobile money operations.
More recent Nigerian research has continued to examine the relationship between fintech, digital financial inclusion and MSME performance. A 2026 study using Nigerian macro-level data examined digital financial inclusion and MSME performance using data from 2014 to 2024.
However, fintech adoption does not automatically eliminate all the challenges faced by small businesses. Businesses may encounter network failures, transaction charges, fraud, cybersecurity risks, failed transactions, account restrictions and difficulties associated with digital literacy.
I therefore consider it necessary to examine the effect of fintech services on small business growth in Nigeria. This study focuses on the major ways through which fintech services may influence business growth, particularly through digital payments, POS services, mobile financial services, digital financial records and access to fintech-enabled finance.
1.2 Statement of the Problem
Small businesses play an important role in employment creation, income generation and economic activity in Nigeria. However, many small businesses operate under difficult conditions that can limit their ability to grow.
Access to finance remains an important concern for many businesses. Other challenges include poor infrastructure, changing consumer behaviour, high operating costs, limited financial records and difficulties associated with traditional financial services.
The increasing availability of fintech services appears to provide possible solutions to some of these problems. A business owner can receive payment electronically, transfer money to suppliers, monitor transactions and potentially access digital financial services without relying exclusively on conventional banking arrangements.
However, the increasing use of fintech raises an important question: does the adoption of fintech services actually translate into small-business growth?
There are also possible disadvantages. Transaction charges can increase operating costs. Network failures can interrupt business activities. Fraud and cybersecurity threats can result in financial losses. Some business owners may also lack sufficient digital knowledge to use financial technology effectively.
Previous empirical studies have produced evidence of positive relationships between financial innovation and SME performance, but findings are not necessarily uniform across every fintech channel or business environment. For example, research on Nigerian SMEs has found positive effects for financial innovation generally, while other research has reported different effects across individual financial-technology channels.
I therefore identified a need to examine the broader effect of fintech services on small business growth in Nigeria rather than concentrating on only one fintech product.
1.3 Purpose of the Study
The main purpose of this study is to examine the effect of fintech services on small business growth in Nigeria.
1.4 Objectives of the Study
I developed the following objectives:
- To examine the effect of digital payment services on small business growth in Nigeria.
- To determine the effect of POS services on small business growth.
- To examine the effect of mobile financial services on small business growth.
- To determine the effect of digital financial record keeping on small business growth.
- To examine the effect of fintech-enabled access to finance on small business growth.
- To identify the major challenges encountered by small businesses when using fintech services.
1.5 Research Questions
I formulated the following research questions:
- What effect do digital payment services have on small business growth in Nigeria?
- What effect do POS services have on small business growth?
- What effect do mobile financial services have on small business growth?
- What effect does digital financial record keeping have on small business growth?
- What effect does fintech-enabled access to finance have on small business growth?
- What are the major challenges encountered by small businesses when using fintech services?
1.6 Research Hypotheses
I formulated the following null hypotheses:
H₀₁: Digital payment services have no significant effect on small business growth in Nigeria.
H₀₂: POS services have no significant effect on small business growth in Nigeria.
H₀₃: Mobile financial services have no significant effect on small business growth in Nigeria.
H₀₄: Digital financial record keeping has no significant effect on small business growth in Nigeria.
H₀₅: Fintech-enabled access to finance has no significant effect on small business growth in Nigeria.
1.7 Significance of the Study
Small-business owners
The findings will help small-business owners understand how fintech services can support payment collection, financial management and business operations.
Fintech companies
The findings will provide useful information about the benefits and challenges experienced by small-business users.
Government and regulators
The study will provide information that may assist policymakers in developing policies concerning digital payments, financial inclusion, consumer protection and small-business development.
Financial institutions
The study will contribute to understanding how digital financial services are changing the financial behaviour of small businesses.
Researchers and students
The study will provide additional literature for researchers interested in fintech, financial inclusion, entrepreneurship and small-business development in Nigeria.
1.8 Scope of the Study
I limited this study to the effect of fintech services on small business growth in Nigeria.
The independent variables are:
- Digital payment services
- POS services
- Mobile financial services
- Digital financial record keeping
- Fintech-enabled access to finance
The dependent variable is small business growth.
Small business growth is measured through indicators including:
- Sales growth
- Customer growth
- profitability
- business expansion
- operational efficiency
1.9 Operational Definition of Terms
Fintech: The application of technology to the delivery of financial products and services.
Digital Payment: Electronic payment made through digital channels rather than physical cash.
POS: Point-of-Sale technology used to process electronic transactions.
Mobile Financial Services: Financial services accessed through mobile phones and related digital applications.
Digital Financial Records: Electronic records of business transactions, payments, transfers and other financial activities.
Fintech-Enabled Finance: Financial services, including certain forms of digital credit or financing, made accessible through technology-based platforms.
Small Business: A business operating on a relatively small scale in terms of capital, employees, assets and operations.
Business Growth: Improvement in business performance measured through indicators such as sales, customers, profitability, employment and expansion.
CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Review
2.2 Concept of Fintech
Fintech is a combination of financial services and technology. It refers broadly to the use of technological innovations to provide, improve or automate financial services.
Fintech has changed traditional financial-service delivery by introducing mobile applications, digital wallets, electronic payments, POS terminals, online financial platforms and other technology-based services.
In Nigeria, fintech has become particularly important because digital financial services can reach customers and businesses beyond the traditional branch-based banking structure. The CBN recognises fintech as an important component of the country’s financial-inclusion development.
2.3 Fintech Services in Nigeria
Fintech services in Nigeria include:
- Electronic payments
- Mobile money
- Digital wallets
- POS services
- Online transfers
- Digital banking
- Digital lending
- Payment gateways
- Financial management services
The growth of these services has been supported by increasing mobile-phone use, internet access, electronic payment infrastructure and consumer demand for convenient financial transactions.
The CBN’s payment-system strategy specifically aims to strengthen electronic payments, safety, reliability and financial inclusion.
2.4 Digital Payment Services
Digital payment services allow customers to pay businesses electronically.
For small businesses, digital payments can reduce dependence on physical cash and enable businesses to serve customers who prefer electronic transactions.
Digital payments may also improve transaction records because electronic transactions can leave digital evidence of payment.
The CBN’s payment-channel statistics demonstrate the significant role electronic payment channels now play in Nigeria’s retail payment environment.
2.5 Point-of-Sale Services
POS services enable businesses to accept card-based and other electronic payments.
POS terminals have become particularly visible among Nigerian small businesses and informal-sector operators. They are used not only by retailers but also by agents and businesses that provide financial transactions to customers.
POS services may improve business convenience and customer access to payment facilities. However, network interruptions, transaction failures and charges can affect their usefulness.
2.6 Mobile Financial Services
Mobile financial services allow users to conduct financial transactions through mobile devices.
Small businesses can use mobile applications for transfers, payment collection, account management and other financial activities.
Mobile financial services can reduce the need for physical visits to bank branches and provide business owners with access to financial information from different locations.
2.7 Digital Financial Records
Digital transactions can generate records that help business owners monitor financial activities.
A small-business owner who records sales and payments electronically may have better information about daily revenue and transaction patterns than an owner who relies exclusively on memory or informal paper records.
Digital records can also assist in monitoring customer payments, supplier transactions and business cash flow.
2.8 Fintech-Enabled Financing
Some fintech platforms provide or facilitate access to credit and other financial products.
This is relevant to small businesses because working capital is necessary for purchasing inventory, paying workers, meeting operating expenses and expanding business activities.
However, digital credit must be used carefully because interest, fees and repayment requirements can affect business profitability.
2.9 Concept of Small Business
Small businesses are enterprises operating with relatively limited resources compared with larger firms.
They may include:
- Retail shops
- Food businesses
- Fashion businesses
- Small manufacturing enterprises
- Agricultural businesses
- Transportation businesses
- Repair services
- Personal-service businesses
- Wholesale and distribution businesses
Small businesses are important to Nigeria’s economy because they provide employment and income opportunities and support economic activity across different communities.
2.10 Concept of Business Growth
Business growth refers to measurable improvement in the size, performance or capacity of a business.
I measure business growth in this study through:
- Sales growth
- Customer growth
- Profitability
- Business expansion
- Operational efficiency
Business growth does not necessarily mean that every business must open additional branches. A business may also experience growth through increased sales, more customers, greater inventory, improved profitability or improved operational capacity.
2.11 Fintech and Small Business Growth
Fintech can affect small businesses through several mechanisms.
First, electronic payments can make it easier for businesses to receive money from customers.
Second, digital financial records can improve the availability of transaction information.
Third, fintech services can reduce some transaction barriers.
Fourth, fintech-enabled financial services can potentially improve access to working capital.
Previous empirical research has found evidence that financial innovation can improve SME performance in Nigeria. Effiom and Edet reported that several financial innovation instruments were significant predictors of SME performance.
Recent research also continues to examine digital financial inclusion as a factor associated with MSME performance in Nigeria.
2.12 Theoretical Review
2.13 Technology Acceptance Model
The Technology Acceptance Model (TAM), developed by Davis, explains technology adoption through factors including perceived usefulness and perceived ease of use.
I consider TAM appropriate for this study because small-business owners are more likely to use fintech services when they believe that the services are useful and easy to operate.
In the context of this study:
Perceived usefulness → Fintech adoption → Business outcomes
When a business owner believes that digital payments save time, improve payment collection and support business operations, the owner may be more willing to adopt fintech services.
2.14 Diffusion of Innovation Theory
Diffusion of Innovation Theory, associated with Everett Rogers, explains how innovations spread through a population.
The theory is relevant because fintech adoption among Nigerian businesses has developed progressively. Business owners observe other businesses using POS terminals, mobile applications and electronic payments and may subsequently adopt similar technologies.
The perceived advantages, compatibility, complexity and observability of an innovation can influence adoption.
2.15 Financial Inclusion Perspective
Financial inclusion refers to access to appropriate and useful financial services.
Fintech can contribute to financial inclusion by making financial services more accessible through digital channels. The CBN’s financial-inclusion framework specifically recognises the importance of digital financial services and identifies MSMEs among priority segments.
Improved financial access can potentially contribute to business growth when businesses can use the services effectively.
2.16 Empirical Review
Effiom and Edet investigated financial innovation and SME performance in Nigeria using financial innovation indicators and SME productivity. Their findings indicated that financial innovation had a positive and significant effect on SME productivity, with several payment and electronic financial instruments emerging as significant predictors.
A 2024 study on financial technology and Nigerian SMEs examined relationships involving digital financial technologies and SME performance. Its findings were not uniformly positive across all fintech channels, demonstrating that the effects of individual technologies can differ.
Usman, Muhammad and Kassim examined the effect of financial technology on MSME performance and considered financial inclusion as a mediating factor. Their study focused on the role of digital payment methods and alternative financial platforms in improving access to financial services and business performance.
A 2026 Nigerian study using macro-level data examined digital financial inclusion and MSME performance over the 2014–2024 period. The study demonstrates the continuing importance of digital finance in research concerning Nigerian MSMEs.
These studies provide evidence that fintech and financial innovation are relevant to business performance. However, differences in research design, location, variables and measurement make it necessary to continue examining the relationship.
2.17 Gap in Literature
I identified three major gaps.
First, previous studies have examined financial innovation and fintech using different combinations of technologies. This makes it difficult to generalise the findings to every form of fintech service.
Second, some studies have concentrated on specific geographical locations or specific categories of businesses.
Third, fintech services continue to evolve rapidly, meaning that the relationship between digital finance and small-business growth requires continuing investigation.
This study therefore examines several dimensions of fintech services together and considers their combined effect on small-business growth.
2.18 Conceptual Framework
The conceptual framework for this study is presented below:
FINTECH SERVICES
Digital Payment Services
↓
POS Services
↓
Mobile Financial Services
↓
Digital Financial Record Keeping
↓
Fintech-Enabled Access to Finance
↓
SMALL BUSINESS GROWTH
Sales Growth
Customer Growth
Profitability
Business Expansion
Operational Efficiency
The framework assumes that fintech services can influence business growth through improved transaction efficiency, financial access, payment convenience and financial information.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
I adopted a quantitative survey research design for this study.
The design was considered appropriate because I sought to examine relationships between fintech services and measurable indicators of small-business growth.
3.2 Area of the Study
I situated the study within Nigeria, with the modelled survey framework reflecting small-business operators in an urban Nigerian business environment.
Nigeria was selected because of the increasing importance of digital financial services to businesses and consumers.
3.3 Population of the Study
The population consists of small-business operators who use or have access to fintech services in Nigeria.
Because small businesses operate across numerous sectors and locations, I structured the empirical component around a manageable sample rather than attempting to survey the entire Nigerian small-business population.
3.4 Sample Size
For the modelled study, I used a sample size of 200 respondents.
This sample was selected to provide sufficient observations for descriptive analysis, correlation analysis and multiple regression.
3.5 Sampling Technique
I adopted a structured sampling approach covering different categories of small businesses.
The modelled respondents were distributed across retail, food services, fashion, transportation, personal services, wholesale/distribution and other small-business categories.
3.6 Sources of Data
I used two broad sources of information:
- Primary-style questionnaire data represented through a modelled dataset for the empirical analysis.
- Secondary information obtained from academic publications and institutional sources.
For transparency, the numerical responses presented in Chapter Four are simulated/modelled research data prepared for this project. They are not represented as actual responses collected from identifiable individuals.
3.7 Instrument for Data Collection
I designed a structured questionnaire divided into five sections.
Section A: Respondent Information
This section covers:
- Gender
- Age
- Educational qualification
- Business sector
- Years of operation
- Number of employees
Section B: Fintech Usage
This section measures the use of:
- Digital payments
- POS services
- Mobile financial services
- Digital records
- Fintech-enabled financing
Section C: Business Growth
This section measures:
- Sales growth
- Customer growth
- Profitability
- Business expansion
- Operational efficiency
Section D: Benefits of Fintech
This section examines:
- Convenience
- transaction speed
- payment accessibility
- record keeping
- financial access
Section E: Challenges
This section examines:
- Network problems
- transaction charges
- fraud
- cybersecurity
- failed transactions
- digital-literacy difficulties
I used a five-point Likert scale:
5 – Strongly Agree
4 – Agree
3 – Undecided
2 – Disagree
1 – Strongly Disagree
3.8 Validity of the Instrument
I structured the questionnaire around the research objectives and hypotheses to ensure that the instrument measured the major variables of the study.
The questionnaire items were designed to correspond directly with the independent variables and the indicators of business growth.
3.9 Reliability of the Instrument
I adopted Cronbach’s Alpha as the proposed reliability measure for the questionnaire scales.
A coefficient of 0.70 or above is commonly used as a practical benchmark for acceptable internal consistency in many social-science studies.
3.10 Method of Data Collection
For the purposes of this modelled project, I constructed a simulated response dataset corresponding to the questionnaire.
The modelled dataset contains 200 questionnaire records, of which 180 were treated as valid responses for the statistical analysis.
This approach allows me to demonstrate a complete empirical research process without falsely claiming that the data were collected from actual named respondents.
3.11 Method of Data Analysis
I analysed the modelled data using:
- Frequency
- Percentage
- Mean
- Standard deviation
- Pearson correlation
- Multiple regression
I tested the hypotheses at a 0.05 level of significance.
3.12 Model Specification
I specified the regression model as:
SBG = β₀ + β₁DPS + β₂POS + β₃MFS + β₄DFR + β₅FAF + ε
Where:
SBG = Small Business Growth
DPS = Digital Payment Services
POS = Point-of-Sale Services
MFS = Mobile Financial Services
DFR = Digital Financial Record Keeping
FAF = Fintech-Enabled Access to Finance
β₀ = Constant
β₁–β₅ = Regression coefficients
ε = Error term
3.13 Ethical Considerations
I recognised the importance of protecting research participants and avoiding the disclosure of personal information.
Because the empirical figures used in Chapter Four are modelled data, no real respondent’s personal information is presented.
I also ensured that academic sources used in the study are acknowledged appropriately.
DATA PRESENTATION, ANALYSIS AND DISCUSSION
4.1 Nature of the Modelled Dataset
For this research project, I used a modelled/simulated dataset to demonstrate the empirical analysis required for the study.
The dataset contains 200 modelled questionnaire records, with 180 treated as valid responses for analysis.
The figures below are therefore not actual survey responses from named individuals or businesses. They are constructed research data designed to be internally consistent with the questionnaire, objectives and statistical model.
4.2 Questionnaire Distribution and Response
Table 4.1: Questionnaire Distribution and Response
| Category | Frequency | Percentage |
|---|---|---|
| Questionnaires distributed/modelled | 200 | 100.0 |
| Valid responses | 180 | 90.0 |
| Invalid/incomplete responses | 20 | 10.0 |
| Total | 200 | 100.0 |
The table shows that 180 out of the 200 modelled questionnaires were treated as valid responses, representing a usable response rate of 90%.
4.3 Demographic Characteristics of Respondents
Table 4.2: Gender Distribution
| Gender | Frequency | Percentage |
|---|---|---|
| Male | 104 | 57.8 |
| Female | 76 | 42.2 |
| Total | 180 | 100.0 |
The modelled distribution indicates that male respondents constituted 57.8%, while female respondents constituted 42.2%.
Table 4.3: Age Distribution
| Age | Frequency | Percentage |
|---|---|---|
| 18–25 years | 31 | 17.2 |
| 26–35 years | 63 | 35.0 |
| 36–45 years | 49 | 27.2 |
| 46–55 years | 25 | 13.9 |
| 56 years and above | 12 | 6.7 |
| Total | 180 | 100.0 |
The largest modelled group was respondents aged 26–35 years, representing 35.0%.
Table 4.4: Educational Qualification
| Qualification | Frequency | Percentage |
|---|---|---|
| Secondary education | 32 | 17.8 |
| OND/NCE | 47 | 26.1 |
| HND/Bachelor’s degree | 78 | 43.3 |
| Postgraduate | 23 | 12.8 |
| Total | 180 | 100.0 |
The table indicates that 43.3% of the modelled respondents had HND or bachelor’s-level qualifications.
4.4 Business Characteristics
Table 4.5: Business Sector
| Business Sector | Frequency | Percentage |
|---|---|---|
| Retail/trading | 49 | 27.2 |
| Food/restaurant | 28 | 15.6 |
| Fashion | 21 | 11.7 |
| Transportation/logistics | 19 | 10.6 |
| Personal services | 25 | 13.9 |
| Wholesale/distribution | 22 | 12.2 |
| Other | 16 | 8.9 |
| Total | 180 | 100.0 |
Retail and trading businesses constituted the largest category in the modelled dataset.
Table 4.6: Years of Business Operation
| Years | Frequency | Percentage |
|---|---|---|
| Less than 2 years | 27 | 15.0 |
| 2–5 years | 66 | 36.7 |
| 6–10 years | 51 | 28.3 |
| 11–15 years | 23 | 12.8 |
| More than 15 years | 13 | 7.2 |
| Total | 180 | 100.0 |
The largest group had operated for between two and five years.
Table 4.7: Number of Employees
| Employees | Frequency | Percentage |
|---|---|---|
| 1–2 | 61 | 33.9 |
| 3–5 | 69 | 38.3 |
| 6–10 | 34 | 18.9 |
| 11–20 | 12 | 6.7 |
| Above 20 | 4 | 2.2 |
| Total | 180 | 100.0 |
The modelled data show that most businesses employed between three and five workers.
4.5 Fintech Usage
Table 4.8: Fintech Services Used
| Fintech Service | Users | Percentage |
|---|---|---|
| Digital payments | 168 | 93.3 |
| POS services | 151 | 83.9 |
| Mobile financial services | 159 | 88.3 |
| Digital financial records | 132 | 73.3 |
| Fintech-enabled finance | 94 | 52.2 |
Digital payment services recorded the highest level of modelled adoption at 93.3%.
Table 4.9: Frequency of Fintech Usage
| Frequency | Frequency | Percentage |
|---|---|---|
| Several times daily | 92 | 51.1 |
| Daily | 54 | 30.0 |
| Several times weekly | 22 | 12.2 |
| Occasionally | 12 | 6.7 |
| Total | 180 | 100.0 |
The modelled responses indicate that 81.1% used fintech services either several times daily or daily.
4.6 Descriptive Analysis
Table 4.10: Descriptive Statistics of Fintech Services
| Variable | Mean | Std. Deviation |
|---|---|---|
| Digital payment services | 4.21 | 0.71 |
| POS services | 4.03 | 0.79 |
| Mobile financial services | 4.12 | 0.73 |
| Digital financial records | 3.84 | 0.86 |
| Fintech-enabled finance | 3.57 | 0.94 |
The mean scores indicate relatively high adoption of digital payment, POS and mobile financial services.
Digital payment services recorded the highest mean of 4.21.
Fintech-enabled finance recorded the lowest mean among the variables at 3.57, suggesting comparatively lower utilisation.
Table 4.11: Descriptive Statistics of Small Business Growth
| Growth Indicator | Mean | Std. Deviation |
|---|---|---|
| Sales growth | 4.02 | 0.76 |
| Customer growth | 3.91 | 0.82 |
| Profitability improvement | 3.78 | 0.88 |
| Business expansion | 3.63 | 0.93 |
| Operational efficiency | 4.10 | 0.70 |
| Overall business growth | 3.89 | 0.75 |
Operational efficiency recorded the highest mean score, followed by sales growth.
The overall mean of 3.89 suggests that the modelled respondents generally reported positive business-growth outcomes associated with fintech usage.
4.7 Correlation Analysis
Table 4.12: Correlation Matrix
| Variables | DPS | POS | MFS | DFR | FAF | SBG |
|---|---|---|---|---|---|---|
| DPS | 1 | .54** | .58** | .47** | .42** | .61** |
| POS | .54** | 1 | .51** | .44** | .39** | .56** |
| MFS | .58** | .51** | 1 | .49** | .46** | .59** |
| DFR | .47** | .44** | .49** | 1 | .52** | .55** |
| FAF | .42** | .39** | .46** | .52** | 1 | .57** |
| SBG | .61** | .56** | .59** | .55** | .57** | 1 |
**Note: p < 0.01
The modelled correlation results show positive relationships between all fintech variables and small-business growth.
Digital payment services had the strongest correlation with small-business growth at r = 0.61, while POS services had a correlation of r = 0.56.
The results indicate that higher fintech-service usage was associated with higher reported business-growth scores within the modelled dataset.
4.8 Regression Analysis
Table 4.13: Model Summary
| Model | R | R Square | Adjusted R Square | Std. Error |
|---|---|---|---|---|
| 1 | .746 | .557 | .544 | .512 |
The model produced an R value of 0.746, indicating a strong positive relationship between the combined fintech variables and small-business growth.
The R-square value of 0.557 indicates that approximately 55.7% of the variation in small-business growth is explained by the fintech variables included in the model.
The remaining 44.3% may be associated with other factors not included in the model.
Table 4.14: Analysis of Variance
| Model | Sum of Squares | df | Mean Square | F | Sig. |
|---|---|---|---|---|---|
| Regression | 82.461 | 5 | 16.492 | 62.87 | .000 |
| Residual | 45.610 | 174 | .262 | ||
| Total | 128.071 | 179 |
The modelled ANOVA result produced an F-value of 62.87 with a significance level below 0.05.
This indicates that the combined fintech variables significantly predict small-business growth within the modelled dataset.
Table 4.15: Regression Coefficients
| Variable | B | Std. Error | Beta | t | Sig. |
|---|---|---|---|---|---|
| Constant | 0.814 | 0.271 | — | 3.00 | .003 |
| Digital payment services | 0.286 | 0.071 | .291 | 4.03 | .000 |
| POS services | 0.184 | 0.068 | .191 | 2.71 | .007 |
| Mobile financial services | 0.231 | 0.073 | .236 | 3.16 | .002 |
| Digital financial records | 0.157 | 0.065 | .161 | 2.42 | .017 |
| Fintech-enabled finance | 0.201 | 0.062 | .218 | 3.24 | .001 |
The regression results show that each of the five fintech variables had a positive coefficient.
Digital payment services had the largest standardised beta coefficient among the variables, while digital financial record keeping had the smallest.
All five variables recorded significance values below 0.05 in the modelled analysis.
4.9 Test of Hypotheses
Hypothesis One
H₀₁: Digital payment services have no significant effect on small business growth in Nigeria.
The regression result produced a coefficient of β = 0.291 and a significance value of p < 0.001.
Since the significance value is below 0.05, I rejected the null hypothesis.
Decision: H₀₁ is rejected.
I therefore found, within the modelled dataset, a statistically significant positive relationship between digital payment services and small-business growth.
Hypothesis Two
H₀₂: POS services have no significant effect on small business growth in Nigeria.
The modelled regression result produced β = 0.191 with p = 0.007.
Since p < 0.05, I rejected the null hypothesis.
Decision: H₀₂ is rejected.
The modelled result indicates a statistically significant positive relationship between POS services and small-business growth.
Hypothesis Three
H₀₃: Mobile financial services have no significant effect on small business growth in Nigeria.
The modelled regression result produced β = 0.236 with p = 0.002.
Since p < 0.05, I rejected the null hypothesis.
Decision: H₀₃ is rejected.
The modelled result therefore indicates a statistically significant positive relationship between mobile financial services and small-business growth.
Hypothesis Four
H₀₄: Digital financial record keeping has no significant effect on small business growth in Nigeria.
The regression result produced β = 0.161 with p = 0.017.
Since p < 0.05, I rejected the null hypothesis.
Decision: H₀₄ is rejected.
The modelled findings indicate a significant positive relationship between digital financial records and small-business growth.
Hypothesis Five
H₀₅: Fintech-enabled access to finance has no significant effect on small business growth in Nigeria.
The regression result produced β = 0.218 with p = 0.001.
Since p < 0.05, I rejected the null hypothesis.
Decision: H₀₅ is rejected.
The modelled findings indicate a significant positive relationship between fintech-enabled access to finance and small-business growth.
Table 4.16: Summary of Hypotheses Testing
| Hypothesis | β | p-value | Decision |
|---|---|---|---|
| H₀₁ Digital payment services | .291 | .000 | Rejected |
| H₀₂ POS services | .191 | .007 | Rejected |
| H₀₃ Mobile financial services | .236 | .002 | Rejected |
| H₀₄ Digital financial records | .161 | .017 | Rejected |
| H₀₅ Fintech-enabled finance | .218 | .001 | Rejected |
4.10 Discussion of Findings
The first finding indicates that digital payment services have a positive relationship with small-business growth in the modelled analysis. I found this reasonable because electronic payment systems can allow businesses to receive money from customers who do not have cash available. The finding is also consistent with previous Nigerian research showing that financial innovation can contribute to SME performance.
The second finding indicates that POS services have a significant positive relationship with business growth. POS services can provide small businesses with another channel for receiving payments and may also improve convenience for customers.
The third finding shows a positive relationship between mobile financial services and small-business growth. Mobile financial services can allow business owners to make transfers, monitor transactions and conduct financial activities without being physically present at a bank branch.
The fourth finding concerns digital financial records. I found a positive relationship between digital records and business growth. Proper records can help business owners monitor income and expenditure and may provide useful information for business decisions.
The fifth finding indicates a positive relationship between fintech-enabled access to finance and business growth. Access to working capital can help businesses purchase inventory, meet operating expenses and expand their activities.
Overall, the modelled findings support the view that fintech services can contribute to small-business development. However, I recognise that fintech should not be regarded as the only determinant of business growth. Other factors such as inflation, consumer demand, infrastructure, management ability, access to conventional finance, competition and government policies can also affect business performance.
The findings are therefore consistent with the broader Nigerian literature indicating that financial innovation and digital financial inclusion are relevant to SME and MSME performance.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
In this study, I examined the effect of fintech services on small business growth in Nigeria.
I focused on five major dimensions of fintech services:
- Digital payment services.
- POS services.
- Mobile financial services.
- Digital financial record keeping.
- Fintech-enabled access to finance.
I adopted a quantitative research approach and used a modelled dataset of 200 questionnaire records, with 180 valid responses used in the statistical analysis.
I employed descriptive statistics, correlation analysis and multiple regression.
The modelled regression produced an R-square of 0.557, indicating that the fintech variables collectively explained 55.7% of the variation in small-business growth within the modelled dataset.
The five hypotheses were rejected because their modelled significance values were below 0.05.
5.2 Summary of Findings
I made the following findings:
Digital payment services
I found a statistically significant positive relationship between digital payment services and small-business growth.
POS services
I found a statistically significant positive relationship between POS services and small-business growth.
Mobile financial services
I found a statistically significant positive relationship between mobile financial services and small-business growth.
Digital financial records
I found a statistically significant positive relationship between digital financial record keeping and small-business growth.
Fintech-enabled finance
I found a statistically significant positive relationship between fintech-enabled access to finance and small-business growth.
Overall fintech effect
The combined fintech variables demonstrated a strong positive relationship with small-business growth in the modelled analysis.
5.3 Conclusion
Based on the findings of this study, I conclude that fintech services have an important relationship with small-business growth in Nigeria.
Digital payments can improve the ease with which businesses receive money from customers. POS services can provide convenient payment channels, while mobile financial services can make financial transactions more accessible to business owners.
Digital financial records can also support better financial management by making transaction information easier to monitor. In addition, fintech-enabled access to finance can provide businesses with additional opportunities to obtain working capital.
However, I do not conclude that fintech alone determines business growth. The success of a small business depends on several factors, including management, capital, market demand, infrastructure, competition, government policies and the general economic environment.
The modelled findings nevertheless indicate that fintech services can form an important part of the financial and operational infrastructure supporting Nigerian small businesses.
5.4 Recommendations
Based on the findings, I make the following recommendations.
1. Fintech companies should improve transaction reliability
I recommend that fintech companies continue investing in reliable payment infrastructure so that failed transactions and unnecessary interruptions are reduced.
2. Transaction charges should remain transparent
Fintech providers should clearly communicate transaction charges and other fees to business users. Transparent pricing will allow small-business owners to make better financial decisions.
3. Customer support should be strengthened
Fintech companies should improve their customer-support systems so that merchants can resolve failed transactions, account issues and other problems quickly.
4. Cybersecurity should be strengthened
I recommend continuous investment in fraud detection, cybersecurity and consumer-protection mechanisms. Small businesses are vulnerable to financial losses when digital accounts are compromised.
5. Small-business owners should maintain digital records
I recommend that small-business owners use digital transaction records to monitor sales, expenses and cash flow. Digital records should complement proper accounting practices rather than replace them.
6. Digital financial literacy should be improved
Business owners should improve their knowledge of digital financial services, particularly cybersecurity, transaction verification, password protection and responsible borrowing.
7. Fintech-enabled credit should be used responsibly
Small-business owners should evaluate interest, fees and repayment obligations before taking digital loans. Access to credit is useful only when the expected business benefit can reasonably support repayment.
8. Regulators should strengthen consumer protection
Regulatory authorities should continue developing rules that protect businesses and consumers while allowing responsible fintech innovation.
9. Digital infrastructure should be improved
Reliable telecommunications and electricity infrastructure are important to the effective use of fintech services. Continued investment in these areas will support digital financial inclusion and business activity.
5.5 Contribution to Knowledge
I believe this study contributes to the literature by examining fintech services as a multidimensional concept rather than focusing only on one technology.
The study considers digital payments, POS services, mobile financial services, digital records and fintech-enabled finance together.
It also connects these services directly with measurable dimensions of small-business growth.
The study therefore provides a framework that can be used by future researchers to investigate specific fintech services and business outcomes in different Nigerian locations.
5.6 Limitations of the Study
I recognise several limitations.
First, fintech services are changing rapidly, meaning that the findings may change as new technologies, regulations and business models emerge.
Second, small businesses operate under different economic and infrastructural conditions across Nigeria. Therefore, the relationship observed in one environment may not be identical in another.
Third, the empirical Chapter Four dataset used in this project is modelled/simulated data rather than responses collected from actual respondents. The statistical findings should therefore be understood as an academically structured demonstration of the proposed research model rather than evidence of an actual field survey.
Fourth, the study focuses on selected dimensions of fintech and does not cover every digital financial service available in Nigeria.
5.7 Suggestions for Further Studies
I recommend that future studies examine:
- The effect of specific fintech companies on small-business performance.
- Fintech adoption among women-owned businesses in Nigeria.
- The effect of digital lending on SME survival.
- The relationship between POS services and profitability.
- Cybersecurity risks among small-business fintech users.
- Fintech transaction charges and business profitability.
- Digital financial literacy and fintech adoption.
- Fintech and informal-sector business formalisation.
- Comparative fintech adoption between rural and urban businesses.
- Long-term effects of fintech adoption on business survival.
REFERENCES
Central Bank of Nigeria. (2022). Payments System Vision 2025. Central Bank of Nigeria.
Central Bank of Nigeria. (n.d.). Financial inclusion. Central Bank of Nigeria.
Central Bank of Nigeria. (n.d.). Payment modes in Nigeria. Central Bank of Nigeria.
Effiom, L., & Edet, S. E. (2022). Financial innovation and the performance of small and medium scale enterprises in Nigeria. Journal of Small Business & Entrepreneurship, 34(2).
Ojima, N. (2026). Financial technology investment and the performance of small and medium enterprises in Nigeria: A dynamic panel analysis (2015–2024). World Journal of Finance and Investment Research, 10(3).
Usman, M. H., Muhammad, S. M., & Kassim, S. I. (2025). The effect of financial technology on MSMEs performance: The mediating role of financial inclusion. FUDMA Journal of Accounting and Finance Research, 3(2), 106–120.
APPENDIX
QUESTIONNAIRE
EFFECT OF FINTECH SERVICES ON SMALL BUSINESS GROWTH IN NIGERIA
Dear Respondent,
I am conducting a research study on the Effect of Fintech Services on Small Business Growth in Nigeria.
The questionnaire is designed to obtain information about the use of digital financial services and their relationship with small-business performance.
Please provide answers that best represent your experience. The information provided is intended for academic purposes.
Thank you for your cooperation.
SECTION A: PERSONAL AND BUSINESS INFORMATION
Please tick (✓) the appropriate answer.
1. Gender
[ ] Male
[ ] Female
2. Age
[ ] 18–25
[ ] 26–35
[ ] 36–45
[ ] 46–55
[ ] 56 and above
3. Educational Qualification
[ ] Secondary education
[ ] OND/NCE
[ ] HND/Bachelor’s degree
[ ] Postgraduate
4. Type of Business
[ ] Retail/Trading
[ ] Food/Restaurant
[ ] Fashion
[ ] Transportation/Logistics
[ ] Personal Services
[ ] Wholesale/Distribution
[ ] Other
5. How long has your business operated?
[ ] Less than 2 years
[ ] 2–5 years
[ ] 6–10 years
[ ] 11–15 years
[ ] More than 15 years
6. Number of employees
[ ] 1–2
[ ] 3–5
[ ] 6–10
[ ] 11–20
[ ] Above 20
SECTION B: FINTECH SERVICE USAGE
Please indicate your level of agreement.
SA = Strongly Agree
A = Agree
U = Undecided
D = Disagree
SD = Strongly Disagree
| Statement | SA | A | U | D | SD |
|---|---|---|---|---|---|
| I regularly use digital payment services in my business. | |||||
| Digital payments make it easier for my customers to pay. | |||||
| I use POS services for business transactions. | |||||
| POS services have improved payment convenience in my business. | |||||
| I use mobile financial applications for business transactions. | |||||
| Mobile financial services save me time. | |||||
| I maintain digital records of some business transactions. | |||||
| Digital records help me monitor my business finances. | |||||
| I have used or considered fintech-enabled financing for my business. | |||||
| Fintech services have improved my access to financial services. |
SECTION C: SMALL BUSINESS GROWTH
| Statement | SA | A | U | D | SD |
|---|---|---|---|---|---|
| My business sales have improved since I began using fintech services. | |||||
| My business has gained more customers through digital payment options. | |||||
| Fintech services have improved my business profitability. | |||||
| Fintech services have helped me expand my business. | |||||
| Fintech services have improved my operational efficiency. | |||||
| Digital transactions have improved my ability to monitor business performance. | |||||
| Fintech services have helped me manage business cash flow. | |||||
| Fintech services have contributed to the overall growth of my business. |
SECTION D: CHALLENGES OF USING FINTECH SERVICES
| Statement | SA | A | U | D | SD |
|---|---|---|---|---|---|
| Network problems affect my use of fintech services. | |||||
| Transaction charges increase my business costs. | |||||
| Failed transactions affect my business operations. | |||||
| I am concerned about fraud when using digital financial services. | |||||
| Cybersecurity is a concern for my business. | |||||
| Some fintech services are difficult to understand or use. | |||||
| Customer-service problems affect my experience with fintech services. |
END OF QUESTIONNAIRE
Note on the empirical chapter: The numerical results in Chapter Four are explicitly modelled/simulated for this academic project. They should not be represented outside this project as actual survey responses collected from real respondents.