Financial Inclusion and Growth of Small and Medium Enterprises in Cross River State, Nigeria

Recently, financial inclusion has assumed greater level of importance due to its perceived importance as a driver of economic growth. Giving access to hundreds of millions of people especially those in the small and medium scale enterprises sub-sector who are presently excluded from financial services would provide the possibilities for the creation of a large depository of savings, investible funds, income, hence poverty reduction. This study investigates the influence of financial inclusion on growth of small and medium enterprises in Cross River State. The study conducted a cross sectional survey of small and medium scale businesses in Calabar Metropolis using purposive sampling technique. The population of the study was one thousand two hundred and ninety-four (1294) SMEs in the state and a sample size of 306 was obtained for the study. The data obtained were analyzed using the Pearson Correlation technique and the results of the analysis revealed that financial inclusion in terms of bank loans and advances, access to ATM and internet banking have statistically significant correlation with growth of small and medium scale enterprises in Cross River State. Hence, the policy implication of the study is that banks should reduce their lending rate in order to induce many SMEs operators to access bank loans for their businesses. Furthermore, commercial banks and microfinance institutions should ensure that more bank branches are established so as to enhance bank penetration whereby many SMEs operators can have access to ATM machines to transact their businesses.