Effect of mobile money services on sales of micro and small enterprises in Nakuru Town, Kenya

Abstract

The adoption and use of mobile money in business operations by MSEs is notable and determining the effect of the new technology on their performance is very crucial to inform about the significant effect on MSE’s sales. This study therefore, determined the effect of mobile money transactions on the sales of MSEs in Nakuru Town. The objectives of the study were; to establish the effect of mobile finance, banking and payment on the sales of MSE in Nakuru Town. The study used a descriptive cross sectional survey design because it was appropriate for this study. The target population of the study consisted of 21,139 registered MSEs located within Nakuru Town in two Sub Counties namely: Nakuru East and Nakuru West. A stratified sampling technique was used to select a representative sample from the two Sub Counties. A sample size of 246 MSEs were selected to participate in the study though only 236 MSEs responded. A questionnaire was a chosen data collection instrument for the study due to its appropriateness in collecting primary data. Moreover, ethical issues concerning the information required were taken into account. The collected data were analyzed using descriptive statistics such as mean and mode. The association between the variables was determined by conducting a correlation analysis. A multiple regression model was used to determine the effect of mobile money services and sales. The results revealed that MSEs in Nakuru Town use mobile money services in business transactions, and there is a significant positive relationship between mobile finance, mobile banking, and mobile payment with MSEs' sales respectively. The study concluded that there is a significant positive effect between mobile money services and MSE sales. The study recommends that more awareness be done on mobile banking and finance. A study should also be carried out on the effect of mobile money services on liquidity and other measures of financial performance of MSE such as profitability.