ASSESSING THE IMPACT OF ELECTRONIC BANKING ON SMES
CHAPTER ONE
INTRODUCTION
1.1 The Study’s Background
Most countries, at all levels of development, small and medium-sized enterprises (SME) play an important role in achieving the SDGs by promoting inclusive and sustainable economic growth, providing employment and decent work for all, promoting sustainable industrialization, fostering innovation, creating values, and reducing income inequalities (OECD, 2017).
Sustainable economic growth is the key to reducing poverty in developing countries. As a result of the high level of poverty and the flexibility of Small medium enterprises in comparison to other ventures, interest in Small medium enterprises should be greater in developing countries.
In Nigeria, a developing country with over 160 million people and over 65 percent of the population under 35 years old (SMEDAN/NBS MSME Survey, 2013), policymakers must seek national economic development through small and medium-sized enterprises rather than relying on the oil sector.
This shift in Nigeria’s economic policy direction is due not only to the depletion of oil reserves, but also to the abundant potentials; availability of land, cheap labor, and so on of small and medium-sized enterprises.
Despite the fact that the change in economic policies in favor of small and medium-sized enterprises has resulted in a significant increase in the number of available small and medium-sized enterprises, the contribution of this sector to Nigeria’s Gross Domestic Product (GDP) is low.
The education, wholesale/trade, and manufacturing sectors, which have the highest concentration of SME, do not account for up to 50% of Nigeria’s independent contribution to the national GDP (SMEDAN/NBS MSME Survey, 2013).
This low rate of contribution to Nigeria’s national GDP could be attributed to a lack of access to finance, multiple taxation, market access, and outdated technology, all of which affect the ease of doing business in small and medium-sized enterprises (SMEDAN/NBS MSME Survey, 2013).
The inability of small and medium-sized businesses to gain access to information and communication technology (ICT) is viewed as a major barrier to developing strong operations and expanding their businesses (Dutta & Mia, 2009).
Economic sectors that use ICT advances have a high level of efficiency, ease of operation, and convenience. The internet and mobile technology are key information communication technologies that have improved the way businesses do business in recent years.
The growing number of internet applicants has also been very important in product marketing and distribution in many businesses (Yang, Li, Ma, & Chen, 2018).
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ASSESSING THE IMPACT OF ELECTRONIC BANKING ON SMES
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