Financial Technology and Its Effects on Small and Medium-scale Enterprises in Ghana: An Explanatory Research

The study is motivated by the growing importance of financial technology in SME operations and the need to understand its impact on business performance in developing economies like Ghana. The research pursued three objectives: exploring awareness and perceptions of fintech adoption among SMEs, investigating the relationship between fintech adoption and SME performance, and examining the role of financial literacy in this relationship. The study was grounded in the Technology Acceptance Model and Resource-Based View Theory. An explanatory research design with a quantitative approach was employed, focusing on SMEs registered with the Association of Ghana Industries. Primary data was collected through structured questionnaires from 169 SMEs, examining fintech adoption and usage (12 items), financial literacy (15 items), and SME performance (10 items). Data analysis using PLS-SEM revealed high adoption rates for basic fintech solutions (M = 3.90) but lower rates for advanced technologies. A strong positive relationship was found between fintech adoption and SME performance (β = 0.910, p < 0.001). Financial literacy demonstrated a significant mediating effect (β = 0.530, p = 0.004) but not a moderating effect (β = 0.036, p = 0.312) on this relationship. The study recommended establishing demonstration centers for advanced fintech solutions, developing digital transformation policies, and creating integrated training programs combining fintech skills with financial management knowledge. These recommendations were directed at various stakeholders including the Ghana Association of Industries, Ministry of Trade and Industry, and financial institutions to enhance fintech adoption and its impact on SME performance.