Abstract
Small and Medium Enterprises (SMEs) play a critical role in modern economies, contributing significantly to employment creation, innovation, poverty alleviation, and overall economic stability. However, there impact on income generation and SME growth remains debatable, as many programmes have failed to achieve their intended objectives, as a result of weak policy implementation, governance challenges, and corruption, which have undermined the effectiveness of enterprise development initiatives. This study examines the effect of mobile money usage on SME access to credit in Nigeria, while accounting for macroeconomic factors and structural disruptions, including the COVID-19 pandemic. Adopting an ex-post facto research design, the analysis utilizes quarterly data from 2009 to 2024 and applies the Autoregressive Distributed Lag (ARDL) model to explore both short-run and long-run relationships. The findings reveal that, in the short term, lagged increases in mobile money usage temporarily reduce SMEs’ access to traditional credit, reflecting transitional disruptions associated with the rapid uptake of digital financial services. Economic growth enhances short-term credit availability, whereas rising inflation and higher interest rates constrain SME financing, aligning with the monetary transmission mechanisms emphasized in financial intermediation theory. The COVID-19 pandemic dummy demonstrates significant short-term shocks with partial recovery, underscoring SMEs’ susceptibility to systemic disturbances. In the long run, mobile money usage negatively influences SME credit, indicating partial substitution of conventional lending by digital finance. The study concludes that mobile money usage has enhanced short-term access to credit for SMEs in Nigeria, but this effect has not yet translated into long-term improvements. it is recommended that policymakers should focus on strengthening the link between mobile money platforms and formal credit systems rather than assuming direct credit expansion from digital usage alone.