Safaricom Limited’s Mobile Money Services and Access to Trade Credit by Microenterprises in Nairobi City County Kenya
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Credit rating for informal micro-enterprises for purposes of accessing trade credit by suppliers is challenging since there is a shortage of and complexity in obtaining reliable data. Empirical research indicates that micro-enterprises in Nairobi City County do sell and also receive their goods and services on credit through business to business (B2B) agreement thereby fulfilling a key liquidity need for the micro-enterprises. However, customers who are able to access trade credit are a percentage of less than 2 of the total customers‟ base since it is based on long term relationship between the buyer and seller. This therefore excludes a huge percentage of customers who may require credit sale as a working capital bridge gap. However, with the upsurge of financial technology products uptake especially Safaricom Ltd‟s mobile money services, business owners should be able to assess creditworthiness of buyers before giving trade credit and hence this research is intended to ascertain the effect of mobile money services on access to trade credit by the microenterprises in Nairobi City County. The specific objectives of the study were; to assess whether digital payment-buy goods application (till number) has influence on access to trade credit by microenterprises in Kamukunji market, to establish whether saving and loan product (mshwari) has influence on access to trade credit by microenterprises in Kamukunji market, to determine whether mpesa for business application has an effect on access to trade credit by microenterprises in Kamukunji market, to determine whether pochi la biashara application has influence on access to trade credit by microenterprises in Kamukunji market. The following theories served as a guide for the study; Technology Acceptance theory, Unified Theory of Acceptance and use of technology, Diffusion innovation Theory and Technology, organization and Environment theory. To attain its objectives, the study utilised a descriptive research approach. The population targeted under study was 4,080 registered microenterprises in Kamukunji Market, Nairobi City County as per the City County Business Register of 2021. The sample size of 351 microenterprises was determined using the Krejcie & Morgan technique, which was then utilized in stratified random sampling. A self-administered questionnaire was employed for the study's primary data. Statistical Package for Social Sciences (SPSS) version 25 was used to analyze the data that had been collected. The quantitative data was examined through both inferential and descriptive statistics. Diagnostic tests as well as model specification tests were carried out to ascertain whether linear regression analysis best fits the data. The results were displayed through tables and charts. Ethical consideration was also observed. The findings demonstrated that the variables used in this study, savings and loan service, digital payment service, mpesa for business and pochi la biashara jointly explained 82 percent of the variation in access to trade credit among businesses in Kamukunji market. The study also established that savings and loan service and access to trade credit were positively and significant related; digital payment service and access to trade credit were positively and significant related; there is a positive and significant relationship between Mpesa for business application and access to trade credit and that Pochi la Biashara Service and access to trade credit among businesses in Kamukunji market are positively and significant related. The study concludes that Safaricom Ltd mobile money services have significant effect on access to trade credit by microenterprises in Kamukunji market, Nairobi City County Kenya. The study thus recommends that businesses in Kamukunji County and other microenterprises in other counties should strive to embrace Safaricom Ltd mobile money services such as savings and loan service, digital payment, mpesa for business, pochi la biashara since they enhance access to trade credit for the businesses. There is need to do further studies in area related to cost of accessing trade credit under the fintech firms and huge data available for assessing creditworthiness of borrowers.