Abstract
This study examined the impact of electronic banking on the performance of Small and Medium Enterprises (SMEs) in Ogbia Local Government Area, Bayelsa State. Specifically, it identified electronic banking services used by SMEs, assessed their effect on transaction efficiency, examined adoption challenges, and determined their overall impact on SME performance. The study adopted a descriptive survey design, with a sample of 303 respondents selected using the Taro Yamane formula. Data were collected through a structured questionnaire, with 296 valid responses representing a 97.7% response rate. Descriptive statistics were used to analyse the research objectives, while binary logistic regression tested the hypothesis at the 5% significance level. Findings revealed widespread use of SMS alerts, POS, mobile banking, internet banking and ATM services. Electronic banking significantly improved transaction speed, cash flow management, payment processing and reduction of transaction errors. However, poor internet connectivity, security concerns, high transaction charges, limited digital knowledge and inadequate bank support constrained adoption. The regression results showed a positive and significant effect of electronic banking on SME performance, with POS services exerting the strongest influence. The study recommends improved digital infrastructure, reduced transaction charges, enhanced cybersecurity and increased financial literacy.
References
Adeoti, J. O., & Oshotimehin, K. O. (2012). Adoption of point of sale terminals in Nigeria: Assessment of consumers’ level of satisfaction. Research Journal of Finance and Accounting, 3(1), 1–6.
Akinyele, S. T., & Olorunleke, K. (2010). Technology and service quality in the banking industry. African Journal of Business Management, 4(10), 2094–2105.
Aladwani, A. M. (2001). Online banking: A field study of drivers, development challenges, and expectations. International Journal of Information Management, 21(3), 213–225.
Ayo, C. K., Adewoye, J. O., & Oni, A. A. (2011). Business-to-consumer e-commerce in Nigeria: Prospects and challenges. African Journal of Business Management, 5(13), 5109–5117.
Berger, A. N., & Udell, G. F. (2006). A more complete conceptual framework for SME finance. Journal of Banking and Finance, 30(11), 2945–2966.
Berger, A. N., & Udell, G. F. (2006). A more complete conceptual framework for SME finance. Journal of Banking & Finance, 30(11), 2945–2966. https://doi.org/10.1016/j.jbankfin.2006.05.008
Central Bank of Nigeria (CBN). (2012). Cashless Nigeria Policy. Abuja: CBN.
Daniel, E. (1999). Provision of electronic banking in the UK and the Republic of Ireland. International Journal of Bank Marketing, 17(2), 72–82.
Daniel, E. (1999). Provision of electronic banking in the UK and the Republic of Ireland. International Journal of Bank Marketing, 17(2), 72–82. https://doi.org/10.1108/02652329910263695
Ezeoha, A. (2005). Financial reforms and bank performance in Nigeria: An empirical study. African Journal of Accounting, Economics, Finance and Banking Research, 2(2), 1–15.
Ezeoha, A. (2005). Regulating internet banking in Nigeria: Problems and challenges. Journal of Internet Banking and Commerce, 10(3), 1–10.
Israel, M., & Hay, I. (2006). Research ethics for social scientists: Between ethical conduct and regulatory compliance. London: Sage Publications.
Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard: Measures that drive performance. Harvard Business Review, 70(1), 71–79.
Kothari, C. R. (2014). Research methodology: Methods and techniques (3rd ed.). New Delhi: New Age International Publishers.
Laudon, K. C., & Traver, C. G. (2019). E-commerce 2019: Business, technology, society (15th ed.). Pearson.
Laudon, K. C., & Traver, C. G. (2019). E-commerce: Business, Technology, Society. Pearson.
Mbah, S. A., & Obiezekwem, N. O. (2019). Electronic banking and performance of small and medium enterprises in Anambra State, Nigeria. International Journal of Economics, Commerce and Management, 7(11), 1–15.
Mustapha, R., Onimole, T., & Adebusoye, O. (2025). Effect of electronic banking on operational efficiency of SMEs in Ilorin Metropolis, Nigeria. Journal of Entrepreneurship and Innovation, 14(2), 45–62.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York: McGraw-Hill.
Nwankwo, O., & Eze, O. R. (2013). Electronic payment in cashless economy of Nigeria: Problems and prospects. Journal of Management Research, 5(1), 138–151.
Nwankwo, O., & Eze, S. (2013). Challenges of electronic banking in Nigeria: An empirical study of SMEs. Journal of Banking and Finance Research, 3(1), 12–25.
Richard, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2009). Measuring organizational performance: Towards methodological best practice. Journal of Management, 35(3), 718–804. https://doi.org/10.1177/0149206308330560
Rogers, E. M. (2003). Diffusion of innovations (5th ed.). New York: Free Press.
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill-building approach (7th ed.). Chichester, UK: Wiley.
SMEDAN (2020). National Survey of Micro, Small and Medium Enterprises in Nigeria. Abuja: SMEDAN.
SMEDAN (Small and Medium Enterprises Development Agency of Nigeria). (2020). Annual report on SMEs in Nigeria. Abuja: SMEDAN Publications.
Umoh, E., Effiong, P., & Bassey, A. (2024). Mobile banking adoption and performance of SMEs in Akwa Ibom State, Nigeria. African Journal of Business Management, 18(4), 58–72.
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), 186–204. https://doi.org/10.1287/mnsc.46.2.186.11926
Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). New York: Harper & Row.
