Determinants of Utilization of Mobile Financial Services in Small Scale Businesses in Kiambu County, Kenya
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Date
2018-08-17
Authors
Karanja, Kenneth K.
Onono, Perez O.
Journal Title
Journal ISSN
Volume Title
Publisher
IOSR Journal of Economics and Finance (IOSR-JEF)
Abstract
The Kenyan government has been implementing policies to expand financial access including
promoting mobile enabled financial services to those excluded by the formal banking sector. Majority of small
scale businesses in Kenya have no access to a bank account due to limited bank branches and information
asymmetry about the sector. To facilitate financial inclusion and reach out to rural areas historically
marginalized by convectional banking, mobile network operators have made huge investment to create network
and ease access to money. While invention of Mobile money offers financial alternatives businesses have not
seized the opportunity. This study investigated the determinants of mobile financial services utilization among
small scale businesses in Kiambu County using primary data obtained through interviews with licensed small
scale businesses. The logit regression analysis was used and the results indicated that; size of business, age of
business, distance to bank, transport cost, business type and sex of business owner were significant
determinants of mobile financial service utilization by small scale businesses. The study recommends,
infrastructure development by the government to facilitate movement in rural areas and to encourage financial
service providers to penetrate with ease, provision of an encouraging environment for business to thrive and
improvement of mobile financial services by the mobile network operators
Description
A Research Article in the IOSR Journal of Economics and Finance (IOSR-JEF)
Keywords
Mobile financial services, Small scale businesses, Logit, Financial inclusion, Rural areas
Citation
Karanja, K. K., & Onono, P. O. Determinants of Utilization of Mobile Financial Services in Small Scale Businesses in Kiambu County, Kenya.