Analytical Study of the Research Gap in Digital Financial Services and SME Performance in South West Nigeria

Digital financial services have transformed SME finance access globally, yet the empirical literature on their specific impacts on SME performance in South West Nigeria is fragmented and methodologically heterogeneous, creating a research gap requiring systematic characterisation. This study analytically examined the research gap in digital financial services and SME performance in South West Nigeria through systematic literature review and original empirical contribution. A systematic scoping review of nine databases identified 28 publications from 2019 to 2024 on digital finance and SMEs in South West Nigeria, of which only 11 used rigorous impact evaluation methodologies and only 4 addressed longitudinal performance measurement. Original empirical research using a difference-in-differences design compared performance outcomes between 180 SMEs that adopted digital payment and credit platforms (Moniepoint, Kuda Business, Carbon for Business) and 180 matched non-adopters across Lagos, Ogun, and Oyo States over 24 months. Adopters showed significantly higher revenue growth (24.7 percent versus 9.3 percent, p < 0.001), employment growth (14.2 percent versus 5.6 percent), and formal credit access. Three major research gaps were identified: the absence of gender-differentiated digital finance impact analysis, limited evidence on rural SME adoption barriers, and the understudied interaction between digital finance and business formalisation. Recommendations include SMEDAN commissioning a comprehensive longitudinal digital finance-SME performance study and EFInA incorporating SME performance indicators in its biennial financial inclusion surveys. Keywords: digital financial services, SME performance, South West Nigeria, fintech, research gap