The Influence of Islamic Financing on SMEs Performance in Nigeria

Sa’adatu B. Adam
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Sa’adatu B. Adam: Islamic Business School, Universiti Utara Malaysia, Kedah, Malaysia.

International Journal of Research and Innovation in Social Science, 2020, vol. 4, issue 9, 593-598

Abstract: With emerging literature on Islamic finance and Islamic modes of financing, a number of research studies were conducted to analyze and look at the role of Islamic modes of financing for the growth of several sectors of economy. But few studies have been attempted to consider the influence of Islamic financing on SMEs performance in Nigeria. SMEs are the important determinants of economic growth; they contribute and enhance the general productivity and employment opportunities. Therefore, the purpose of this study is to examine the influence of Islamic financing on SMEs performance in Nigeria. This is cross sectional research using 354 owner/managers of SMEs in Kano, Kaduna and Sokoto State in north-western Nigeria. Regression analysis was used for the data analysis. It has found that Islamic financing (IF) has positive influence on SMEs’ performance. Theoretically the study provides additional understanding on the importance of Islamic financing in predicting SMEs’ performance. Consequently, the present study is useful to the government and its agencies, financial practitioners, as well as business and academic researchers, in furthering understanding of how the tangible resources in this model influence SMEs’ performance in Nigeria. This study recommends for the future empirical studies on this relationship should be replicated to cover the entire six geo-political regions of Nigeria if the findings are to be generalised to the whole country.

Date: 2020
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