Home / Current Issue / Paper 1711816
Evaluating Government-Led SME Financial Inclusion Strategies in Nigeria: Evidence from the SMEDAN Select Programme
Subject area: Management and Commerce · Area of research: Financial Inclusion
Abstract
Small and Medium Enterprises (SMEs) were instrumental in Nigeria?s economic growth, job creation, and industrial diversification. But they remain at odds with finance because of structural market inefficiencies, high collateral demands and limited credit history documents. In response, the Federal Government of Nigeria launched a number of inclusion-focused initiatives, including the SMEDAN Select Programme as one of the largest efforts to integrate small business with the formal financial system. As a model for government-funded financial inclusion in Nigeria, the research studies in this paper critically examines the design, implementation, and outcomes of the SMEDAN Select Program as a model for government-led financial inclusion in Nigeria. The paper is based on primary survey data from selected SMEs in six geopolitical zones and secondary data from SMEDAN, Central Bank of Nigeria (CBN), and National Bureau of Statistics (NBS). In addition to descriptive statistics, regression analysis and thematic interpretation the paper utilizes multi-method analyses with descriptive statistics, regression analysis, and thematic interpretation. The results showed that participating in the programme significantly increased SME access to credit facilities, financial literacy, and digital payment adoption. But, persistent obstacles, such as inadequate monitoring, bureaucratic delays and regional imbalances hamper its impact. To wrap up, I conclude that while SMEDAN Select has substantially improved on its progress towards financial inclusion, it is rooted in enhanced public-private coordination, digital finance integration and data-driven policy changes which require a greater commitment to public-private coordination and digital finance. It provides policy recommendations for institutional adjustment to the institutional model for inclusive SME financing in Nigeria and empirical evidence of relevant to other debates over development finance in emerging economies.
Keywords
Financial Inclusion, SMEs, SMEDAN Select Programme, Credit Access, Public?Private Partnership, Nigeria.
References
[1] Adewumi, T., & Yusuf, A. (2024). Reassessing financial inclusion policies for small enterprises in West Africa: The Nigerian perspective. Journal of Development Policy and Practice, 19(2), 145–168. https://doi.org/10.1177/2455133324123456 [Crossref]
[2] African Development Bank (AfDB). (2023). Enhancing access to finance for micro, small, and medium enterprises in Africa: Country diagnostic report—Nigeria. Abidjan: AfDB Publications.
[3] Bank of Industry (BOI). (2022). Annual report and financial statements 2022. Lagos: BOI.
[4] Central Bank of Nigeria (CBN). (2023). National financial inclusion strategy (Revised edition). Abuja: CBN Publications.
[5] International Finance Corporation (IFC). (2023). Digital financial services and SME growth in sub-Saharan Africa. Washington, DC: World Bank Group.
[6] Kalejaiye, P. O., & Adetunji, S. (2023). Evaluating SME policy coordination and impact measurement in Nigeria. African Journal of Economic Policy, 30(1), 77–101.
[7] NIRSAL. (2022). Micro, small and medium enterprise risk sharing framework report. Abuja: Nigerian Incentive-Based Risk Sharing System for Agricultural Lending.
[8] Onuoha, C., & Adebayo, O. (2022). Financial inclusion and SME productivity in Nigeria: A panel data approach. Journal of African Business Studies, 18(4), 233–258.
[9] SMEDAN. (2023). SMEDAN annual report 2023: Empowering enterprises through the Select Programme. Abuja: Small and Medium Enterprises Development Agency of Nigeria.
[10] United Nations Development Programme (UNDP). (2024). Inclusive finance for sustainable development: Policy lessons from emerging economies. New York: UNDP Publications.
[11] World Bank. (2024). Nigeria SME finance and innovation ecosystem review. Washington, DC: World Bank Group.
[12] World Economic Forum (WEF). (2023). Financing the future: Inclusive credit models for African entrepreneurs. Geneva: WEF Publications.
How to cite this paper
@article{1711816,
author = {Tolulope A Shokunbi},
title = {Evaluating Government-Led SME Financial Inclusion Strategies in Nigeria: Evidence from the SMEDAN Select Programme},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {9},
number = {5},
pages = {431-439},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1711816.pdf},
abstract = {Small and Medium Enterprises (SMEs) were instrumental in Nigeria?s economic growth, job creation, and industrial diversification. But they remain at odds with finance because of structural market inefficiencies, high collateral demands and limited credit history documents. In response, the Federal Government of Nigeria launched a number of inclusion-focused initiatives, including the SMEDAN Select Programme as one of the largest efforts to integrate small business with the formal financial system. As a model for government-funded financial inclusion in Nigeria, the research studies in this paper critically examines the design, implementation, and outcomes of the SMEDAN Select Program as a model for government-led financial inclusion in Nigeria. The paper is based on primary survey data from selected SMEs in six geopolitical zones and secondary data from SMEDAN, Central Bank of Nigeria (CBN), and National Bureau of Statistics (NBS). In addition to descriptive statistics, regression analysis and thematic interpretation the paper utilizes multi-method analyses with descriptive statistics, regression analysis, and thematic interpretation. The results showed that participating in the programme significantly increased SME access to credit facilities, financial literacy, and digital payment adoption. But, persistent obstacles, such as inadequate monitoring, bureaucratic delays and regional imbalances hamper its impact. To wrap up, I conclude that while SMEDAN Select has substantially improved on its progress towards financial inclusion, it is rooted in enhanced public-private coordination, digital finance integration and data-driven policy changes which require a greater commitment to public-private coordination and digital finance. It provides policy recommendations for institutional adjustment to the institutional model for inclusive SME financing in Nigeria and empirical evidence of relevant to other debates over development finance in emerging economies.},
keywords = {Financial Inclusion, SMEs, SMEDAN Select Programme, Credit Access, Public?Private Partnership, Nigeria.},
month = {November},
}