2025, Vol. 8, Issue 2

author(s)
Thelma Chibueze, Onome Orivri and Mayowa Egunjobi

abstract
The emergence of digital banking has transformed financial service delivery worldwide, reshaping access to credit, savings, and payment systems. In emerging economies, where traditional banking infrastructure is often limited, digital platforms present new opportunities to expand financial inclusion and stimulate enterprise growth. Micro, small, and medium enterprises (MSMEs), which constitute the backbone of Nigeria’s economy in terms of employment generation and GDP contribution, face persistent challenges such as restricted access to finance, high transaction costs, and bureaucratic inefficiencies. Digital banking provides a promising pathway to mitigate these barriers by offering mobile-based credit facilities, online payment systems, and real-time financial management tools that can strengthen MSME competitiveness. From a broader perspective, digital banking integrates technology with financial intermediation to reduce dependence on brick-and-mortar branches, enabling entrepreneurs in rural and urban settings to access services more efficiently. As adoption accelerates, it also fosters transparency, reduces cash-handling risks, and supports financial literacy through user-friendly platforms. Narrowing this focus to Nigeria, empirical evidence suggests that MSMEs leveraging digital banking tools experience improvements in operational efficiency, credit accessibility, and customer engagement. Nevertheless, gaps persist due to infrastructural constraints, cybersecurity threats, and uneven digital literacy among entrepreneurs. Addressing these challenges requires targeted policy frameworks, investment in digital infrastructure, and collaborative initiatives between banks, fintech firms, and government institutions. In conclusion, digital banking holds significant potential to enhance MSME performance in Nigeria by bridging long-standing financial access gaps. Its successful integration, however, depends on building trust, ensuring regulatory support, and equipping MSMEs with the capacity to utilize technology-driven banking solutions effectively.