Effect of Microfinance Services on the Growth of Micro, Small and Medium Enterprises in Plateau State, Nigeria: Moderating Role of Financial Literacy

The study examined the moderating role of Financial Literacy on the effect Microfinance services on the growth of Micro, Small and Medium Enterprises in Plateau State, Nigeria. Survey research designed was adopted by distributing 385 questionnaires to MSMEs owners in Jos North LGA of Plateau State. 346 of the distributed questionnaires were retrieved and subjected to analysis using multiple regression. The study found that Microfinance loan has a positive and significant effect on MSMEs performance and that financial literacy significantly affects MSMEs growth as entrepreneurs with financial literacy skills demonstrated better record-keeping, improved financial planning, and increased profitability. It was recommended that savings culture should be encourage by offering incentivized savings schemes and digital banking options tailored to MSMEs owners. Ensure that loan funds are strictly used for business growth and not for personal expenses and financial literacy programs should be encouraged and financial management courses should be incorporated into loan disbursement processes.