MOBILE MONEY SERVICES AND PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN KAJIADO COUNTY IN KENYA: A SURVEY OF KITENGELA SUB COUNTY

Abstract

Since introduction of mobile money services in Kenya in 2007, there are more than 110,000 M Pesa agents, 40 times the number of banks ATMS in Kenya. In the first quarter of 2020 (January to March), there was a total of KES 1,087 billion transacted through mobile payments. Among users of mobile money services in Kenya, there are micro, small, and medium enterprises (MSMEs). MSMEs play a crucial role in the Kenya economy through income generating activities and employment creation. Despite the apparent significance associated with MSMEs and the numerous policy initiatives introduced by respective governments in the developing economies during the past decade to accelerate the growth and survival of MSMEs, the performance of MSMEs has been disappointing. The current study sought to bridge this gap by assessing the relationship between mobile money services and performance of small and medium enterprises in Kitengela, Kajiado County, Kenya. The specific objectives of the study were: establish the relationship between mobile payments, mobile transfer, mobile financial services and mobile commerce and performance of small and medium enterprises in Kitengela, Kajiado County. The study benefited MSMEs’ business owners, scholars, and academicians. The study was anchored on Diffusion of innovation theory. The study employed descriptive research design. The target population was 817 formally registered MSMEs in Kitengela Town dealing in trade, services, and manufacturing. The study employed Fisher Model to come up with sample size of 261 who were the business owners or managers/operators. The study utilized primary data which was collected using questionnaires. Quantitative data was presented in frequency tables and figures while quantitative data was presented in prose form. Multiple regression was used to test the relationship between the independent variables and dependent variable. The study established that disbursement and repayment of loans influence mobile money transfer performance. It was also found out that withdraw of money from mobile phone have enhanced the overall performance of mobile financial services. Further, the study found out that checking account balance influenced the performance of mobile commerce among MSMEs. The study concluded that mobile commerce had a statistical significance relationship with the performance of MSMEs in Kitengela, Kajiado County. It was also concluded that salary processing and supplier’s payment influenced the performance of mobile money services among MSMEs in Kitengela, Kajiado County. The study therefore recommended that mobile services provider should seek to promote their services to encourage as many businesspeople as possible to make use of mobile money services. Further, the study recommended that the regulator of mobile phone providers should work towards reducing mobile money services charges between different networks.