The Moderating Effect of Access to Credit on the Relationship Between Entrepreneurial Orientation and Business Growth in Nigeria

This study investigates the relationship between entrepreneurial orientation and business growth among Nigerian small and medium enterprises (SMEs), with particular emphasis on the moderating role of access to credit. Using a quantitative cross-sectional survey design, data was collected from 423 (out of 41.5 million) SMEs across Nigeria's six geopolitical zones through stratified random sampling. Entrepreneurial orientation was measured through four dimensions: innovation propensity, risk-taking behavior, proactive market behavior, and competitive aggressiveness, while business growth was assessed using sales, market share, employee, asset, and profitability growth indicators over a three-year period. Structural Equation Modeling with SmartPLS was employed for data analysis. The findings reveal significant positive relationships between all entrepreneurial orientation dimensions and business growth, with innovation propensity demonstrating the strongest effect (β = 0.387, p < 0.001), followed by proactive market behavior (β = 0.329, p < 0.001), risk-taking behavior (β = 0.241, p < 0.001), and competitive aggressiveness (β = 0.198, p < 0.001). Access to credit significantly moderates all these relationships, with the strongest moderation occurring in the innovation propensity-business growth relationship (β = 0.156, p < 0.001). The model explains 67.3% of the variance in business growth outcomes. The study concludes that while entrepreneurial orientation serves as a critical strategic capability for business growth, its effectiveness is contingent upon access to financial resources that enable the translation of entrepreneurial intentions into actual growth achievements. The study recommends that SMEs should prioritize innovation investments while financial institutions develop specialized financing products that support entrepreneurial activities to maximize growth potential.