Mobile Banking Dynamics and Growth of Small and Medium Enterprises in Nairobi City County, Kenya
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Date
2025-06
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Kenyatta University
Abstract
The sluggish growth of Small and Medium Enterprises (SMEs) in Nairobi City County, Kenya, was attributed to challenges such as inadequate levels of financing, limited assets, revenue and stock losses through theft, and poor record-keeping practices. The aim of the study was to examine the influence of mobile banking dynamics on SME growth, focusing on the effects of ICT Infrastructure, Users’ Capability, Management Support, and Information Management. Grounded on the Diffusion of Innovation Theory, Task Technology Fit, Unified Theory of Acceptance and Use of Technology, and Theory of Reasoned Action, the research utilized descriptive design. Data were collected using closed-ended questionnaires from a targeted population of 1,041 financial SMEs, with a sample of 288 respondents selected through stratified sampling. Secondary data were sourced from financial statements, and both regression and descriptive and analyses were employed to interpret the data. The findings revealed that Mobile Banking Management Support and Mobile Banking Information Management had statistically significant positive effects on SME growth. These variables were identified as critical drivers of resource mobilization, decision-making, and operational efficiency. In contrast, Mobile Banking ICT Infrastructure and Mobile Banking Users’ Capability Services demonstrated positive but statistically insignificant contributions, highlighting the need for complementary strategies, such as improving digital literacy and access to resources, to maximize their practical impact. Adjusted R-square value indicated that the model collectively explained a substantial portion of the variance in SME growth. The study concluded that management support and information management should be prioritized as critical enablers of SME growth. ICT infrastructure and user capabilities, though not statistically significant, remain practically important and require targeted interventions to enhance their effectiveness. Recommendations include improving SMEs’ access to ICT resources, enhancing user training programs for mobile banking systems, strengthening managerial support structures, and adopting robust information management systems to improve decision-making and stakeholder engagement. The study also emphasized the need for future research to explore studies focusing on larger enterprises and other geographical regions for broader generalizability. This study provided valuable insights for stakeholders, policymakers, researchers, and academicians, underscoring the strategic role of mobile banking in fostering SME growth and sustainability.
Description
A Research Project Submitted to the School tf Business, Economics tnd Tourism in Partial Fulfillment of the Requirement for the Award of the Degree of Master of Business Administration (Management Information Systems) of Kenyatta University, June 2025.
Supervisor
David Nzuki