Effect of Digitalisation on the Financial Performance of Retail Small and Medium-Scale Enterprises in Lagos, Nigeria

This study analyses the impact of digitalisation on the financial performance of retail Small and Medium Enterprises (SME) in Lagos, Nigeria. It addresses critical gaps in the existing literature concerning the financial performance on digital technologies and the effects within Nigeria’s largely informal economy. Focusing on the period from 2019 to 2023, the research employed a quantitative methodology, combining a survey of 400 SME managers with an analysis of financial records across four major Lagos markets. Stratified random sampling ensured diverse representation, and regression analysis (using SPSS 28) was used to assess the effects of five digital technologies.From 345 valid responses, the findings revealed that internet banking (β = 0.853, p = .000) and e-commerce adoption (β = 0.366, p = .000) had a statistically significant positive effect on financial performance (p<0.05). On the contrary, Point of Sale (POS) systems and Peer-to-Peer (P2P) platforms showed no significant effect. The study provides empirical evidence to inform Nigeria’s digital strategy, enabling retail SME and policymakers to prioritise highly performing technologies. It also extends the application of the Unified Theory of Acceptance and Use of Technology (UTAUT) in emerging market contexts. Future research should investigate efficacy of technology bundling strategies for SME.