DIGITAL ACCOUNTING AS A CATALYST FOR MSME GROWTH AND FINANCIAL INCLUSION IN NATIONAL DEVELOPMENT

Abstract

The growth of Micro, Small and Medium Enterprises (MSMEs) and their integration into the formal financial system remain critical for national development in Nigeria. However, poor financial record-keeping and exclusion from credit markets continue to limit MSME contributions to GDP and employment. This study examined digital accounting as a catalyst for MSME growth and financial inclusion in national development. Anchored on the Technology Acceptance Model and Diffusion of Innovation Theory, the study adopted a descriptive survey design. A sample of 400 MSMEs was drawn from the registered MSMEs in Nigeria using stratified random sampling. Data were collected with a structured questionnaire and analyzed using descriptive statistics, Pearson correlation, and multiple regression. Findings revealed that digital accounting adoption has a significant positive effect on MSME growth (β = .54, p < .05) and financial inclusion (r = .67, p < .05). Major challenges to adoption include high cost of software, poor internet connectivity, and low digital literacy. The study concludes that digital accounting can drive formalization, access to credit, and tax compliance among MSMEs. It is recommended that government subsidize accounting software, improve digital infrastructure, and mandate e-reporting to enhance adoption for national development.