Inclusive Business Models and the Profitability of Horticultural Farming in Southwest Nigeria: Evidence from a Partial Least Squares Structural Equation Model

Abstract

Background: Horticulture has emerged as a major undertaking among rural farmers and one of the more viable pathways to inclusive rural development in developing countries, owing to its rapid production turnover, strong market demand, and capacity to create employment for youth and women. Yet, empirical work on inclusive business models (IBMs) in African agriculture, including Nigeria, remains concentrated on staple crops, leaving horticulture's profitability drivers comparatively under-examined. Purpose: This study examined the effect of five inclusive business model dimensions on the profitability of horticulture farming in South West Nigeria, and tested gender diversity as a moderator of the IBM–outcome relationships. Methods: The study used a descriptive, cross-sectional survey design. Structured questionnaires built on a 5-point Likert scale were administered to 422 horticulture farmers selected through multistage sampling across six South-West Nigerian states (Lagos, Ogun, Oyo, Osun, Ondo and Ekiti); 353 usable responses were returned (83.6%). Data were analyzed descriptively and, for hypothesis testing, using Partial Least Squares Structural Equation Modelling (PLS-SEM) estimated in Smart PLS, with path significance assessed through bootstrapping (5,000 subsamples). Results: The hypothesized model explained 88.7% of the variance in profitability (R² = 0.887). Access to farm in puts was the strongest positive predictor of profitability (β = 0.125, p = 0.016), followed by quality control (β = 0.181, p = 0.006) and capacity building (β = 0.126, p = 0.036), while access to credit (β = –0.125, p = 0.023) and technical assistance (β = –0.129, p = 0.016) had significant negative effects. Conclusion: IBM dimensions do not act uniformly on horticultural profitability; input access, quality control and capacity building function largely as Stakeholder Theory would predict, whereas credit and technical assistance underperform relative to theoretical expectations, a pattern that points to implementation and delivery-design failures rather than a failure of the inclusive-business logic itself. Practical implication. Program implementers such as 2Scale should prioritize and adequately resource input-support and quality-assurance components, while redesigning credit terms (aligning repayment with horticultural seasonality) and technical assistance (tailoring advice to specific crops) so that these services translate into measurable performance gains.