Chike Onodugo

The need for improved institutional interventions aimed at increasing access to financial services by small and medium enterprises (SMEs) has been emphasized. Complimenting these efforts, this study proposes that building social networks capable of informing requisite financial behaviors would facilitate the financial inclusion of SMEs co-existing in business clusters. This study aimed to empirically test the moderating influence of collective action, bonding, trust, and bridging on the effect of financial behavior on financial inclusion. Using a sample of 311 owners/managers of small and medium scale businesses in sub-urban clusters in South-Eastern Nigeria, the hierarchical moderated regression analysis was used to test the hypotheses of the study. Results show a positive main effect of financial behavior on financial inclusion
(βf = 0.162; t (304) = 1.503; p < 0.05). Also, collective action (βfca = 0.201; t (304) = 6.906; p < 0.05) and bridging (βfbr = 0.201; t (304) = 6.906; p < 0.05) had positive moderating effects, bonding (βfb = 0.032; t (304) = 1.423; p > 0.05) and trust (βft = 0.014; t (304) = 0.9609; p > 0.05) were statistically insignificant. For policy implications, social virtues such as bridging and collective action are more veritable tools for financial inclusion than the personal virtues of trust and bonding and should be factored into economic and social intervention being deployed by institutions interested in meeting the banking/financial needs of businesses.