Effects Of Mobile Banking Services On The Performance Of Small And Medium Manufacturing Enterprises In Thika Town, Kenya

Abstract

The general objective of this study was to investigate the effects of mobile banking services on the performance of SMEs in Kenya. The study applied a descriptive research design. The target population of this study was the 264 small business enterprises operating in the manufacturing sector in Thika Town. This research used stratified random sampling. A sample of 106 respondents was selected from a target population of 264 respondents (including owners or managers). This research used primary data that was collected by use of a self-administered questionnaire distributed through drop and pick later method. Data was analyzed using descriptive statistics, correlation analysis and multiple regression analysis. The study found that mobile banking affects the performance of SMEs in Thika Town to a great extent. SMEs in Thika Town mainly utilize mobile banking service for payment of goods by customers through ‘Lipa na M-Pesa’, for savings to financial institutions, money transfer, phone to bank operations, mini-statements enquiry, credits and airtime purchase and payment of firm bills; cost effectiveness of mobile banking affect the performance of SMEs in Thika Town to a significant extent. Mobile financial services affect efficiency of service delivery hence the performance of small businesses in Thika to a great extent. Mobile financial services enhanced customer satisfaction thereby enhancing the performance of the SMEs. The study recommends that business enterprises keep adopting and using mobile banking in their operations because the number of people with access to a mobile hand set is increasing every day. The study recommends that policy makers consider mobile banking in their formulation of policies because of the technological developments and the expected switch from cash transactions to technologically supported mobile banking services.