Determinant of Electronic Banking Adoption on Entrepreneurial Performance of SMEs in Nasarawa State

Abstract

Electronic banking offers small-and-medium enterprises (SMEs) faster payments, richer cash-flow data and wider market reach, yet adoption rates remain uneven in Nigeria. This study investigated how four adoption determinants of perceived ease of use, service reliability, service awareness and trust affect the entrepreneurial performance of SMEs in Nasarawa State. A quantitative survey was carried out in the study, in which a five-point Likert questionnaire was administered to a Yamane-derived sample of 347 owner-managers (drawn from the 1,816 SMEs registered with the State Ministry of Commerce and meeting a 36-month ownership threshold). Multiple regression analysis at the 0.05 level revealed a model with high explanatory power (R = 0.857; R² = 0.734; F = 472.399, p < 0.05). Trust emerged as the strongest predictor of performance (β = 0.368, p < 0.05), followed by Perceived Ease of Use (β = 0.342, p = 0.016), Service Awareness (β = 0.203, p = 0.000), and Service Reliability (β = 0.185, p = 0.000). These findings confirm that confidence in reliability and integrity of the service, intuitive interfaces, informed familiarity and dependable platforms jointly enhance SME profitability, growth and operational efficiency. The study recommends: (1) banks and fintech should simplify app and POS interfaces through local-language prompts and streamlined menus; (2) providers must fortify system reliability via redundant infrastructure and rapid incident-response protocols; (3) government–industry partnerships should mount targeted awareness clinics in local markets to demonstrate e-banking’s concrete business benefits. Implementing these measures is expected to accelerate digital-finance uptake and, consequently, bolster SME performance across Nasarawa State; and e-banking service providers should implement and visibly communicate robust security protocols to strengthen the confidence of operators of SMEs in electronic banking platforms.