FINANCIAL INNOVATIONS AND REVENUE GROWTH OF REGISTERED MSMEs IN ABIA STATE

This study investigated the effect of financial innovation proxied by Point of Sale (POS) usage and Mobile Transfers (MT) on the revenue growth (RG) of Micro, Small, and Medium Enterprises (MSMEs) in Abia State, Nigeria. Guided by Schumpeter’s Theory of Innovation, the study posits that financial innovations stimulate entrepreneurial dynamism and revenue expansion by introducing efficient payment systems that enhance business operations.

The study adopted a descriptive survey research design, focusing on MSMEs across the 17 Local Government Areas (LGAs) of Abia State. The population comprised all registered MSME operators in the state, totaling 7,225 as obtained from the Abia State Ministry of Commerce and Industry. Using a stratified random sampling technique, a sample size of 425 respondents was drawn, with 25 respondents selected from each LGA. Primary data were collected through a structured five-point Likert scale questionnaire designed around the key variables POS, MT, and RG and validated using Cronbach’s Alpha reliability coefficients exceeding 0.70.

Descriptive statistics (mean, standard deviation, skewness, and kurtosis) and correlation analysis were employed to analyze the data using EViews 13. The results indicated that POS and MT recorded mean scores above 3.6, reflecting high adoption levels among MSMEs. The correlation matrix revealed weak but positive associations between financial innovation variables and revenue growth, implying that digital payment tools contribute moderately to MSME performance.

These findings align with a priori expectations and Schumpeter’s innovation framework, suggesting that technological adoption enhances market efficiency and competitiveness. The study recommends improved digital infrastructure and financial literacy training for entrepreneurs to optimize the benefits of cashless innovations.