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Global Academic Journal of Economics and Business
Volume-5 | Issue-03
Original Research Article
Impact of Digital Financing on Organizational Performance: The COVID-19 Lockdown Experience
Igbara Neeka , Zukbee Sira , Eke Ikechukwu, Naluba Bariyaa Sunday
Published : May 6, 2023
DOI : 10.36348/gajeb.2023.v05i03.001
Abstract
The relationship between digital financing and firm’s profitability, customer satisfaction or organizational performance has been a topical issue in the field of finance and management over time. Nevertheless, the new reality introduced by the Covid-19 lockdown experience globally, has introduce a renewed interest on the impact of digital finance on organizational performance. The fact that people’s movements were restricted, yet there was needed to survive, so businesses had to go on to supply people’s need, payments needed to be made for people to purchase their wants. All these challenges made it clearer that digital financing was a solution to unlimited business transactions. Previous studies have looked at the relationship as well as impacts of digital financing on mostly financial institution. This study therefore, went further to look at the organisations that consume these financial services. The study’s objectives were to find out the impact of digital financing on firms’ profitability; the impact of digital financing on firms’ revenue and the effect of digital financing on firms’ market share. The study used primary data (sourced through questionnaire), from 326 respondents (MSME owners and management staff) sampled from 4,796 MSMEs in Uyo senatorial district of Akwa Ibom state. The collected data were analysed descriptively using means and standard deviation, while the PPMC was used to test the stated hypotheses. The findings of the study show that there is a significant impact of digital financing on firms’ profitability; that digital financing has a significant impact on firms’ revenue; and that digital financing has a positive relationship but an insignificant effect on firm’s market share. Therefore, the study recommends that firms that are yet to adopt digital financing should avail themselves, in order to stand a chance in the competition of the new reality (technology). Firms that had already adopted digital financing should acquire more digital capability and train their staff on digital financing skills.

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