From Payments to Profits: Business Operational Efficiency as a Mediator of the Impact of Digital Financial Services on the Financial Performance of Cameroonian SMEs
DOI:
https://doi.org/10.65150/EP-jefrr/V2E8/2026-05Keywords:
digital financial services, business operational efficiency, financial performance, SMEs, PLS-SEM, Cameroon, mediation analysis.Abstract
This study examines business operational efficiency as a mediator of the relationship between digital financial services (DFS) adoption and financial performance among Cameroonian small and medium-sized enterprises (SMEs). Drawing on the Resource-Based View theory and employing Partial Least Squares Structural Equation Modelling (PLS-SEM) on a cross-sectional sample of 135 SMEs, the study finds that DFS adoption positively and significantly influences both business operational efficiency (β = 0.283, p = 0.008) and financial performance (β = 0.265, p = 0.010). Business operational efficiency in turn significantly predicts financial performance (β = 0.209, p = 0.011) and partially mediates the DFS–performance relationship, with the indirect effect (β = 0.048, 95% CI [0.003, 0.115]) accounting for 18.2% of the total effect on financial performance. The model explains 5.1% of the variance in business operational efficiency (R² = 0.051) and 7.9% of the variance in financial performance (R² = 0.079), with predictive relevance confirmed for both endogenous constructs (Q² = 0.036 and 0.049, respectively). These findings confirm that digital financial technologies generate financial gains not only directly but through the intermediate pathway of operational transformation. The study contributes novel evidence from an under-researched Sub-Saharan African context and offers practical guidance for SME managers, fintech providers, and policymakers seeking to leverage digital finance for enterprise development.
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