Impact of Financial Technology on Financial Performance of Manufacturing Firms in Nigeria

Abstract

This study examines the impact of financial technology (fintech) on the financial performance of manufacturing firms in Nigeria. Specifically, it focuses on two business models within the fintech sector, namely the payment business model (PBM) and the wealth management business model (WMBM). The analysis is based on a regression analysis of listed manufacturing firms in Nigeria, using Return on Assets (ROA) as a measure of financial performance. The findings reveal significant insights into the relationship between fintech business models and financial performance. The regression analysis shows that the payment business model has a significant negative impact on the financial performance of manufacturing firms in Nigeria. The coefficient for the payment business model is negative and statistically significant, indicating that for every 1% increase in the payment business model, the ROA of the firms decreases by 2%. This suggests that the adoption or expansion of the payment business model may have detrimental effects on the financial performance of manufacturing firms in Nigeria. On the other hand, the wealth management business model exhibits a negative coefficient but lacks statistical significance. The regression results indicate that for every 1% increase in the wealth management business model, the ROA of listed manufacturing firms in Nigeria decreases by 25%. However, the non-significant p-value suggests that the impact of the wealth management business model on financial performance is not statistically significant. Based on these findings, it is recommended that manufacturing firms in Nigeria carefully consider the potential risks and drawbacks of adopting the payment business model.