Moderating Effects of Innovation on the Relationship between Micro-Credit and Financial Performance of Microenterprises in Kaduna Metropolis

Abstract

The financial performance which measures the overall financial health of microenterprise is dismal and can become worrisome to government and stakeholders in the private sector of a nation’s economy. Moderating effects of innovation on the relationship between microcredit and financial performance of microenterprises in Kaduna metropolis was examined. The study formulates two hypotheses and applied Multiple Regression technique aided by SPSS to analyze the relationship between financial performance and microcredit with innovation as moderator. Primary data used, were collected from a sample size of 413 owners-managers of microenterprises using structured questionnaires. The finding of the study is that micro-credit significantly has positive effect on the financial performance of microenterprises in Kaduna metropolis. Findings also revealed the moderating effect of innovation on micro-credit and financial performance as significant. It is recommended micro-finance institutions increase the quantum of microcredit so as to enhance and improve the financial performance of microenterprises. Also, the microfinance institutions should employ innovation which may include product innovation, process innovation, technological innovation among others, to strengthen the relationship between micro-credit and financial performance of the microenterprise