Understanding the Importance of the Role of Financial Inclusion to Economic Development: The Mindset of The Nigerian Entrepreneur

Kalu; Okwuagwu Okuu Ph.D; Chiana Cyril Anamelechi Ph.D; Chukwunenye; Ihechukwumere

doi:10.56201/wjeds.v11.no1.2026

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Understanding the Importance of the Role of Financial Inclusion to Economic Development: The Mindset of The Nigerian Entrepreneur

Kalu, Okwuagwu Okuu Ph.D, Chiana Cyril Anamelechi Ph.D, Chukwunenye, Ihechukwumere

Abstract

Financial inclusion is widely regarded as a catalyst for economic development, yet its impact on the entrepreneurial mindset in Nigeria remains under-explored. This study investigates how Nigerian SME owners perceive the role of financial inclusion, how access to formal services influences business performance, the barriers that impede inclusion, and the expectations entrepreneurs hold for future policy initiatives. A quantitative, cross-sectional survey was administered to 80 SME owners across agriculture, manufacturing, services, technology and other sectors; 56 questionnaires were fully completed (70 % response rate). The instrument comprised six sections measuring demographic characteristics, perceived importance of financial inclusion, and access to formal services, business impact, challenges, and future expectations using 5-point Likert scales. Data were coded, cleaned in Microsoft Excel and analyz\ed in EViews. Reliability analysis yielded Cronbach’s ? values ranging from 0.79 to 0.88, indicating good internal consistency. Exploratory factor analysis confirmed five distinct constructs (Financial Inclusion Perception, Access to Formal Services, Business Impact, Perceived Barriers, Future Expectations) with eigenvalues > 1 and cumulative variance explained of 68 %. Pearson correlations showed significant positive associations between perceived inclusion and business impact (r = 0.42, p < 0.01) and between access to formal services and cash-flow management (r = 0.35, p < 0.05). Ordinary least-squares regression, controlling for age, education and business tenure, supported all four hypotheses: perceived importance of financial inclusion positively predicts business performance (? = 0.38, p < 0.001); access to formal services improves cash-flow management (? = 0.31, p = 0.012); higher financial literacy (proxied by education) reduces perceived barriers (? = -0.22, p = 0.024); and positive future expectations increase willingness to engage with formal finance (?

Keywords

financial inclusionNigerian entrepreneursSME performancefinancial literacyexploratory factor analysisOLS regression.

References

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Understanding the Importance of the Role of Financial Inclusion to Economic Development: The Mindset of The Nigerian Entrepreneur

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