Financial technology and credit usage among small and medium enterprises in Kisumu central business district, Kenya
Abstract
FinTech is one of the new technologies of financial innovations and solutions which are
fueling financial accessibility especially in the businesses of developing countries.
Therefore, this has led to growth in consumer demand for digital financial services as
innovations in the financial sector continue to advance. However, the emergence of
FinTech usage has been received both as an opportunity for businesses and as a threat to
other lending institutions like banks, and microfinance institutions among others. Digital
credit consumers have been faced with many challenges including late repayment and
loan defaulter due to lack of transparency in the repayment period and the high amount of
interest charged. This study therefore sought to address the issue of financial technology
and credit usage among small and medium enterprises in Kisumu central business district
in Kenya. The current research was guided by three theories namely: transaction cost
theory, the theory of reasoned action as well as the unified theory of acceptance and use
of technology. This research used descriptive research design. It targeted all the 6,688
SMEs registered to operate in the CBD of Kisumu as at December, 2019 from which
sample size of 100 SMEs was picked. This study gathered primary data through use of a
questionnaire. The collected data was then analyzed through use of descriptive and
inferential statistics. The findings indicated that amount of credit requested from digital
lenders affected credit usage significantly. Moreover, number of branches/agents of
FinTech available were also found to be a strong determinant of credit usage among the
SMEs operating in Kisumu CBD. On opposite, the results showed that number of
subscriptions and amount remitted do not have significant effect on credit usage. The
SMEs are therefore, advised to adopt and use FinTech in order to enhance their credit
usage in business operations.
Publisher
UoN
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1311]
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