Effect of Financial Technology on SMEs Performance in Cameroon amid COVID-19 Recovery: The Mediating Effect of Financial Literacy

Abstract

The paper examines the mediating effect of financial literacy on fintech and SMEs’ performance during COVID-19 recovery in Cameroon. The study collects 381 survey data from SMEs in Yaoundé and Douala, the country’s business hub, to determine how these financial technology innovations affect SMEs’ business performance. Similarly, the PLS-SEM model was used to test the proposed hypotheses. The study results show that the relationship between fintech and financial literacy was positive and significant. The findings also reveal that fintech has a positive and significant effect on SMEs performance. In addition, the results further indicate that financial literacy positively and significantly mediates the relationship between fintech services and the performance of SMEs. Therefore, the study concludes that financial literacy is an essential mechanism through which fintech services influence SMEs’ operational and financial performance in Cameroon. The study has provided a better understanding of how SMEs can improve their performance by leveraging fintech solutions through financial literacy.