Information Technology and Performance of SMEs in Nairobi County, Kenya

Abstract

This study, which examined how information technology was used to improve the performance of SMEs in Nairobi County, Kenya, used a descriptive survey research approach. The study's objective was to determine how much SMEs in Nairobi County, Kenya, employ information technology as well as the impact that technology has on SMEs' performance. A survey questionnaire and key informant interviews were used as data gathering methods in the study's mixed-method approach. In order to ensure that respondents from the trade, manufacturing, and services sectors were represented in the study, the participants for the key informant interviews were chosen using a purposive sampling technique, and a sample size of 100 respondents was chosen using a stratified random sampling approach. The investigation in the study was guided by the Resource-Based Theory, the Diffusion of Innovation Theory, and the Disruptive Technology Theory. Quantitative generated statistics were analyzed via means of descriptive and inferential numbers and displayed in frequency tables, charts, percentages, means and graphs for easy interpretation. Qualitative data generated from the key informant interview were analyzed qualitatively using emerging themes but according to the key study objectives. The research determined that SMEs used various forms of information technology tools among them mobile phones, computers, the internet, social media. There was a high level of knowledge and agreement on the use of mobile and online money banking and acceptance of payments through other remote means other than cash. Mobile payments, internet banking, brand promotion, and the success of SMEs were all positively and significantly correlated. Additionally, it was shown that the performance of SMEs was positively and significantly impacted by mobile payments, electronic funds transfers, online banking, and brand promotion. The study concludes that SMEs were using information technology tools to a great extent. ICT use in SMEs has a proven to play a significant role by enabling SMEs to promote their brand and market their products, resulted in higher-quality products and services, resulted in an increase in their companies' market share and reduced the operations costs which subsequently led to an increase in profits in firms. The analysis suggests the county government leadership implement training workshops and demonstrations of the advantages of modern information technology for all the Small Medium Enterprises involved in the industries of trade, manufacturing, and service area to tap fully into the benefits of IT. The report recommends that a thorough investigation of the difficulties that SMEs encounter in adopting IT tools and appliances be carried out in collaboration with other enterprises in Kenya's rural districts.