Vol. 14(1), pp. 1-11. , 2026.

ISSN: 2384-6151

https://doi.org/10.14662/ijebm2026010

 

 

Full Length Research

 

Effect of Financial Capability on the Investment Decisions of MSMEs in Abuja, Nigeria.

 

1Amos Anyesha Audu, 2Dr. Dannap Edmund Nanzing and 3Prof. Michael Ikupolati

 

1Department of Business Administration, Faculty of Administration, Bingham University, Karu, Nasarawa State 2Department of Business Administration, Faculty of Administration, Bingham University, Karu, Nasarawa State E-mail: eddydannap2011@gmail.com 3Department of Business Administration, Faculty of Administration, Bingham University, Karu, Nasarawa State E-mail: ikupolati@yahoo.com  

Corresponding author’s E-mail: anyeshaamos@yahoo.com  

 

 

Accepted 10 March 2026

Abstract

 

This study investigates the effect of financial capability on the investment decisions of Micro Small and Medium Enterprises (MSMEs) in Abuja, Nigeria, with a particular focus on access to finance and savings and reserves. MSMEs are widely recognized as the backbone of economic growth and employment creation in developing economies, yet their ability to make sound investment decisions is often constrained by financial challenges. A descriptive survey design was adopted, targeting registered MSMEs in Abuja. Using Taro Yamane’s formula, a sample size of 330 was drawn from the MSME population of 1216, and data were collected through structured questionnaires. Reliability was tested using Cronbach’s Alpha, with values above 0.7 confirming the internal consistency of the instrument. Data analysis was carried out using SPSS version 28, applying descriptive statistics, correlation, and multiple regression. The findings revealed that access to finance and savings and reserves significantly influence MSMEs’ investment decisions. Access to finance was found to improve asset acquisition and expansion projects, while savings and reserves played a critical role in sustaining long-term investments and technology adoption. The regression model explained a large proportion of the variance in MSMEs’ investment decisions, underscoring the critical role of financial capability. The study concludes that strengthening financial access and promoting a culture of savings are vital for enabling MSMEs in Abuja to make productive and sustainable investment decisions.

 

Keywords: Financial capability, Access to finance, Savings and reserves, Investment decisions, MSMEs

 

Cite This Article As: Audu, AA., Nanzing, DE., Ikupolati, M. (2026). Effect of Financial Capability on the Investment Decisions of MSMEs in Abuja, Nigeria. Inter. J. Econ. Bus. Manage. Vol. 14(1), pp. 1-11.