Abstract

Agro-based SMEs experience resource constraints and poor access to finance and resources; hence the importance of finance to the success of SMEs cannot be overemphasized especially in the agricultural sector. This study is therefore, an attempt to ascertain the impact of financial inclusion and financial literacy on the performance of agro-based SMEs in Yobe State, Nigeria. A cross sectional research design was adopted. The population of the study was registered agro-based SMEs in Yobe State and the sample size of the study was 300. Questionnaires were used for data collection while hierarchical regression was adopted as data analysis technique. The result revealed that availability, accessibility, affordability and usability of financial services all have significant effect on the performance of agro-based SMEs in Yobe State. Also, financial literacy fully mediated the relationship between the availability of financial services and the performance of agro-based SMEs in Yobe State while partially mediating the relationship between accessibility and affordability of financial services and performance. The study recommended that financial inclusion should be encouraged by both the government and financial institutions and also that formal financial institutions should ensure the availability, accessibility, affordability and usability of financial resources to agro-based SMEs to improve their performance. Also, the government should implement training programmes at the grassroots to improve the financial literacy of agrobased business owners as this helps in the improvement of their business performance.