An analysis of Islamic financing access in Nigeria: perspectives of MSME owners

Purpose Funding difficulties are particularly compounded for Muslim entrepreneurs in Nigeria, owing to the dominance of interest-based financial institutions prohibited in Islam. Thus, this study aims to explore the role of awareness of Islamic finance principles in ameliorating financial deprivation and financial anxiety to increase access to Islamic financing among Muslim entrepreneurs. Design/methodology/approach A quantitative survey method of data collection was used to collect data from a total of 208 micro, small and medium enterprises (MSME) owners based on hand-delivered questionnaires. The data was analyzed using a partial least square structural equation model. Findings The result supports the direct negative impact of relative financial deprivation and the positive impact of awareness of Islamic finance principles on access to Islamic finance. However, awareness of Islamic finance principles could not moderate any of the direct relationship. Practical implications This study implies that financial deprivation is detrimental to access to Islamic finance, but financial anxiety has no significant impact. In addition, policymakers and MSME owners could directly foster access to Islamic finance through awareness of Islamic finance principles, though it could not redirect the negative impact of relative financial deprivation on access to Islamic finance. Originality/value The valuable finding here is that the substantial positive impact of awareness of Islamic finance principles on access to Islamic finance is not enough to redirect the negative effect of relative financial deprivation on access to Islamic finance.