Digital Lending and SMEs Financial Performance

The study investigated the effect of digital lending on SMEs financial performance: evidence from Jos South LGA, Plateau State, Nigeria. The objective of this study was to assess the effect of digital lending on SMEs financial performance in Jos South LGA, Plateau State. The study reviewed key concepts bordering on the independent (digital lending dimensions) and dependent variables (SMEs’ financial performance). The study adopted a survey research design to elicit specific information from respondents through the use of questionnaires. Data were obtained from primary and secondary sources. The data collected were processed and analyzed using linear regression through Statistical Package for Social Sciences (SPSS v 26). The analysis of 318 administered questionnaires revealed the following results. Firstly, credit assessment has a positive and significant impact on SMEs’ financial performance (B=.291, t=-2.654, p-value=0.008). Secondly, that loan approval has a positive and significant impact on SMEs’ financial performance (B=.269, t=-2.450, p-value=0.015). Thirdly, associated customer service has a positive and significant impact on SMEs financial performance (B=0.550, t=2.974, p-value=0.003). Lastly, business process management also has a positive and significant impact on SMEs’ financial performance (B=1.281, t=49.723, p-value=0.000). The study recommends business policy makers in Jos South LGA, Plateau State, to adopt a comprehensive policy for digital lending in order to help the SMEs perform better financially, especially those in the rural areas. Notwithstanding the importance of this research study mentioned earlier, the study has limitations. Notably, the study is limited to SMEs in Jos South LGA of the State. Future research studies may consider studying SMEs financial performance in the whole State to allow for result generalization.