Joseph Muchai MuniuPerez O. OnonoKirui, Evans2021-09-222021-09-222021http://ir-library.ku.ac.ke/handle/123456789/22591A Thesis submitted to the School of Economics in Partial Fulfillment of the Requirements for the Award of the Degree of Doctor of Philosophy in Economics of Kenyatta University, February, 2021Developments in financial innovations in Kenya has seen financial access gap drastically reduced. Specifically, mobile money has offered huge potential in boosting financial access in Kenya. As a result, 83 percent of Kenyans have been formally included into the formal financial system. This was expected to positively impact households‟ resilience to financial shocks and performance of Micro and Small enterprises in Kenya in terms of ease of financial access and transactions costs. On the contrary, at least 36.2 percent of households in Kenya experienced financial shocks and were unable to recover. In terms of performance of micro and small enterprises, majority of them continue to face challenges related to high levels of financial services exclusion and other bottlenecks in attempt to access credit. The key question was therefore on whether utilization of mobile money services has any effects on household resilience to financial shocks and performance of Micro and Small Enterprises in Kenya. Past studies on the effects of utilization of mobile money services on household financial resilience had not focused on all facets of mobile money utilization which included receiving payments, borrowing and saving money. None of the reviewed studies analyzed the effects of utilization of mobile money services, as defined in this study and majority of the studies in Kenya mainly focused on major towns leaving out rural areas where mobile money is being heavily relied on. This study analyzed the effect of utilization of mobile money on household resilience and small and microenterprise performance in Kenya. Specifically, the study established the determinants of utilization of mobile money services by households and small and medium enterprises and analyzed the effects of utilization of mobile money services on household financial resilience to shocks and performance of micro and small enterprises‟ in Kenya. The study used 2016 Micro, Small and Medium Enterprises establishment data set by Kenya National Bureau of Statistics and 2019 FinAccess data set. Heteroskedastic probit models were estimated for determinants while endogenous switching regression model and propensity score matching estimation techniques were used to analyze the effects of utilization of mobile money services. The findings indicated that household size, level of dependency, age, average transport cost to the nearest mobile money agent, residence, group membership, marital status, education and mobile phone ownership determined utilization of mobile money services by households in Kenya. Households that utilized mobile money services were found to be more financially resilient than those who did not. In the case of the small and microenterprises, the results showed that group membership, sex, credit access, education, mobile phone ownership, radio ownership, registration of business, number of business units and total number of employees determined utilization of mobile money services. On average, the monthly firm income was shown to increase when an enterprise utilized mobile money services than when it does not. The study recommended the need for the government to design supportive policies that would scale up the utilization of mobile money services to more financially excluded households and MSEs in Kenya.enUtilizationMobile Money ServicesEnhancingHousehold’s Financial ResiliencePerformanceMicro and Small EnterprisesKenyaThesis