FINTECH, FINANCIAL INCLUSION AND ENTERPRISE DEVELOPMENT IN NORTHEAST NIGERIA: DRIVERS, CONSTRAINTS AND OUTCOMES
Abubakar Bala, PhD , Abubakar Sadiq Usman, PhD and Ibrahim Sule
Volume 12 Issue 3
Abstract
This study investigates the transformative role of financial technology (Fintech) in advancing financial inclusion and enterprise development within the conflict-affected and economically marginalized region of Northeast Ni-geria. The main objective is to examine the relationship between fintech adoption—encompassing mobile money, digital payments, and micro-credit—and the growth outcomes of Micro, Small, and Medium Enterprises (MSMEs) across the six states of the region. Employing a cross-sectional, explanatory mixed-methods design, the study utilized a structured survey of MSMEs for quantitative analysis and key-informant interviews with reg-ulators, fintech providers, and association leaders for qualitative context. Structural Equation Modelling (SEM) was applied to validate measurement models and estimate the structural relationships among the latent con-structs of fintech adoption, financial inclusion, and enterprise development. The findings reveal that fintech adoption significantly and positively influences financial inclusion, which in turn acts as a critical intermediary driving enterprise development by improving liquidity, transaction efficiency, and credit access. However, the results also highlight that the effectiveness of these digital tools is significantly moderated by environmental con-straints, specifically ongoing insecurity, infrastructural deficits, and low levels of digital literacy among entre-preneurs. Based on these findings, the study recommends that the Central Bank of Nigeria and regional stake-holders prioritize the strengthening of digital infrastructure and implement targeted digital literacy training pro-grams to bridge the usage gap. For further study, it is suggested that longitudinal research be conducted to track the long-term resilience of fintech-integrated MSMEs as they transition from informal to formal economic sectors. The primary limitations of the study include the volatile security situation in certain rural pockets of the Northeast, which restricted physical data collection in specific high-risk zones, and the reliance on self-reported business performance data from informal MSMEs. Keywords: Fintech Adoption, Financial Inclusion, MSME Development, Structural Equation Modelling (SEM)
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