EFFECT OF FINANCIAL TECHNOLOGY ADOPTION ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN KATSINA METROPOLIS: THE MEDIATING ROLE OF FINANCIAL LITERACY

Abstract

In spite of recognized significant contribution of SMEs to the world economy, Nigerian SMEs performance is below expectations. This is because SMEs in Nigeria faces severe limitations in financial management, modern technology and technical expertise among others. The objective of this study is to investigate the mediating role of financial literacy in the relationship between Perceived Usefulness (PU), Perceived Ease of Use (PEOU), and Perceived Risks (PR)and Small and Medium Enterprises (SMEs) performance in Katsina Metropolis, Nigeria. A sample size of 399 owner managers were selected using simple random sampling technique. The data collected was screen and analyzed using SPSS AND Smart PLS 3.0. The finding revealed that both Perceived Ease of Use and Perceived Usefulness have significant positive effects on SMEs performance. While Perceived Risk did not show a significant direct effect on performance, it significantly influenced financial literacy. Furthermore, all three FinTech constructs Perceived Usefulness, Perceived Ease of Use, and Perceived Risks were found to significantly impact financial literacy, which in turn strongly predicted SMEs performance. The mediation analysis confirmed that financial literacy significantly mediates the relationship between FinTech adoption and SMEs performance, emphasizing the critical role of financial education in optimizing the benefits of FinTech tools. The study implications for practices and limitations are discussed.   Keywords: Financial Literacy, Perceived Usefulness, Perceived ease of use, Perceived risk, SMEs Performance