The Impact of Mobile Banking on the Financial Performance of Smes in Nairobi County, Kenya

Abstract

The objective of this project was to determine the impact of mobile banking on the financial performance of SMEs in Nairobi County, Kenya. The study employed a descriptive research design to achieve this objective. The targeted populace was the SMEs operating in Nairobi County, whereby the researcher used a formula to estimate the sample size to be 400 SMEs. The sampling of respondents was done randomly to offer an equal opportunity for all the SMEs to participate. The researcher utilized primary and secondary data in the investigation. Semi-structured questionnaires were distributed to the target population to amass the primary data. Then the scholar gathered secondary data via different publications like journal articles, books, government records, bank statements, and others reliable for use in the study. The researcher executed multiple regression analysis and correlation to determine the effect of mobile banking on the financial performance of SMEs. The findings revealed that the highest proportion of the participants detailed that m-banking assisted them to pay bills, transfer money, receive payments, borrow mobile loans, saving money, and pay their suppliers. Hence, mbanking services boosted the efficiency of SME operations and minimized their costs when compared to traditional banking. Additionally, the research revealed that mobile loans have contributed to an increase in the financial performance of SMEs. The study also discovered that a positive, significant, and strong correlation existed between mbanking deposits and the financial performance of SMEs. Likewise, the study revealed that a rise in the utilization of m-banking payment services positively affects the performance of SMEs. The study concluded that mobile banking positively and significantly affects the financial performance of SMEs within Nairobi County.