EFFICACY OF MOBILE PAYMENT SOLUTIONS ON

PERFORMANCE OF SMALL AND MEDIUM

ENTERPRISES IN KAMUKUNJI TRADING CENTER,
NAIROBI COUNTY

BY

ELLY WINNIE HOPE

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

SUMMER, 2021
 EFFICACY OF MOBILE PAYMENT SOLUTIONS ON
PERFORMANCE OF SMALL AND MEDIUM
ENTERPRISES IN KAMUKUNJI TRADING CENTER,
NAIROBI COUNTY

BY

ELLY WINNIE HOPE

A Research Project Report Submitted to the Chandaria

School of Business in Partial Fulfillment of the Requirement
for the Degree of Masters in Business Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

SUMMER, 2021
 STUDENT’S DECLARATION
I, the undersigned, announce that this is my unique work and has not been submitted to
any other college, university, or institution other than the United States Universal
University-Africa.

Signed: _________________________ Date: ______________________

Elly Winnie Hope (ID. No. 629211)

This research project report has been presented for examination with my approval as the
appointed supervisor.

Signed: _________________________ Date: ______________________

Mr. Kepha Oyaro

Signed: _________________________ Date: ______________________

Dean, Chandaria School of Business

ii
 COPYRIGHT
© Copyright 2021 by Elly Winnie Hope.

iii
 ABSTRACT
The general objective of the study was to examine the efficacy of mobile payment
solutions on performance of SMEs in Kamukunji trading center. The study was directed
by the following specific objectives; to determine the effectiveness of mobile payments
mobility on performance of small and medium enterprises, to examine the effect of
mobile payments solutions cost reduction on performance of small and medium
enterprises, to establish the influence of mobile payments solutions access to credit on
performance of small and medium enterprises.

Descriptive research design was utilized in this study research. The study population were
all SMEs in Kamukunji trading center who were approximately 1041, thus, the sampling
frame was primarily comprised of the managers and owners of the registered 1041 SMEs
that were operating within Kamukunji trading center, and was drawn from the Nairobi
County Council registrar of business and trading licenses county offices. Stratified
sampling was utilized by the researcher whereby the business categories were used in the
classification of the business, and simple random sampling was applied to select the
sample size respondents. The sample size of 91 respondents was obtained using the
Yamane formula. Primary data was used in this study, and it was obtained using a self-
administered questionnaire that was piloted before administration. After data had been
collected, the SPSS version 20 tool was used to analyze the data descriptively and
inferentially. The data was presented using tables and figures.

The study revealed that mobile payments were used in the businesses because they were
easy to use, and that mobile payments mobility was significant to SMEs’ performance.
Regression analysis showed that mobile payments mobility influenced SMEs’
performance by about 17% (R² = .173), and that there existed a statistically significant
linear relationship between mobile payments mobility and SMEs’ performance. It is noted
that mobile payments mobility could statistically and significantly influence SMEs’
performance.

The study showed that mobile banking platforms have reduced the need to visit the bank,
thus get more time to run the businesses, and that mobile payments costs were significant
to SMEs’ performance (r=0.238, p<0.05). Regression analysis revealed that mobile

iv
payments costs influenced SMEs’ performance by about 6% (R² = .057). The ANOVA
for indicated that there existed a statistically significant linear relationship between
mobile payments costs and SMEs’ performance, and that mobile payments costs could
statistically and significantly influence SMEs; performance.

The study indicates that mobile payments platforms had provided the businesses with
accessibility to unsecured mobile credits (loan options). Correlation analysis indicated
that mobile payments credit accessibility was significant to SMEs’ performance, and that
mobile payments credit accessibility influenced SMEs’ performance by about 63% (R² =
.634). The ANOVA showed that there existed a statistically significant linear relationship
between mobile payments credit accessibility and SMEs’ performance, and that mobile
payments credit accessibility could statistically and significantly influence SMEs;
performance.

The study concludes that most of the SMEs’ business transactions were done through
mobile payment solutions because they were easy to use. The adoption of mobile
payments was influenced by increased of demand of mobile mode of payments, but it had
not upgraded the businesses’ execution. The cost involved in mobile money transfer was
not satisfactory and had not led to its adoption, but rather adoption was as a result of
mobile handsets being simple to operate and had the functionalities required to adopt
mobile money payments. Finally, mobile payments had facilitated the businesses’ ability
to access long-term credit, and had provided the businesses with accessibility to
unsecured mobile credits (loan options) and usage of branchless banking services.

This study recommends SME owners and managers to take advantage of mobile
payments mobility to facilitate their achievement of their business goals and objectives.
They also need to take advantage of mobile payments costs within their business by
increasing their profitability. These SMEs can offer merchandise and services remotely
and a reduced cost using available digital payment solutions, and platforms, and could
still access other markets. They can also take advantage of mobile payments credits to
access unsecured loans that they may use to expand their businesses. This will empower
them to purchase products and offer services to their clients effectively and efficiently.

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 ACKNOWLEDGEMENT

I would first like to acknowledge my Lord and Creator, Almighty God for blessing me
with the strength, good health and wisdom to accomplish this piece of work on time.
Secondly, I would like to take this opportunity to thank my proposal lecturer Dr. Caren
Ouma and Mr. Kepha Oyaro who encouraged, motivated, and advised me during the
writing of this thesis. Once again, I would like to thank my entire family, especially my
husband and sisters for their endless support. And a final thanks, to my loving friends for
their consistent encouragement.

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 DEDICATION

This research is dedicated to all friends and family, especially my husband, children and
sisters who have motivated me to pursue this MBA degree. Thank you all

vii
 TABLE OF CONTENTS
STUDENT’S DECLARATION ........................................................................................ii
COPYRIGHT ....................................................................................................................iii
ABSTRACT ....................................................................................................................... iv
ACKNOWLEDGEMENT ................................................................................................ vi
DEDICATION..................................................................................................................vii
TABLE OF CONTENTS ...............................................................................................viii
LIST OF TABLES ............................................................................................................ xi
LIST OF FIGURES .........................................................................................................xii
LIST OF ABBREVIATIONS AND ACRONYMS ......................................................xiii

CHAPTER ONE ................................................................................................................ 1

1.0 INTRODUCTION........................................................................................................ 1
1.1 Background of the Study ............................................................................................... 1
1.2 Statement of the Problem ............................................................................................... 5
1.3 General Objective .......................................................................................................... 6
1.4 Specific Objectives ........................................................................................................ 6
1.5 Significance of the Study ............................................................................................... 6
1.6 Scope of the Study ......................................................................................................... 7
1.7 Definition of Terms........................................................................................................ 8
1.8 Chapter Summary .......................................................................................................... 8

CHAPTER TWO ............................................................................................................... 9

2.0 LITERATURE REVIEW ........................................................................................... 9
2.1 Introduction .................................................................................................................... 9
2.2 Mobile Payments Mobility and Performance of Small and Medium Enterprises ......... 9
2.3 Mobile Payments Costs and Performance of Small and Medium Enterprises ............ 14
2.4 Mobile Payments Credit Accessibility and Performance of Small and Medium
Enterprises.......................................................................................................................... 19
2.5 Chapter Summary ........................................................................................................ 24

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CHAPTER THREE ......................................................................................................... 26
3.0 RESEARCH METHODOLOGY ............................................................................. 26
3.1 Introduction .................................................................................................................. 26
3.2 Research Design........................................................................................................... 26
3.3 Population and Sampling Design ................................................................................. 26
3.4 Data Collection Methods ............................................................................................. 28
3.5 Research Procedures .................................................................................................... 29
3.6 Data Analysis Methods ................................................................................................ 30
3.7 Chapter Summary ........................................................................................................ 30

CHAPTER FOUR ............................................................................................................ 31

4.0 RESULTS AND FINDINGS ..................................................................................... 31
4.1 Introduction .................................................................................................................. 31
4.2 Response Rate and Demographic Information ............................................................ 31
4.3 Mobile Payments Mobility and Performance .............................................................. 34
4.4 Mobile Payments Costs and Performance ................................................................... 39
4.5 Mobile Payments Credit Accessibility and Performance ............................................ 44
4.6 Chapter Summary ........................................................................................................ 49

CHAPTER FIVE ............................................................................................................. 50

5.0 DISCUSSION, CONCLUSION, AND RECOMMENDATIONS ......................... 50
5.1 Introduction .................................................................................................................. 50
5.2 Summary ...................................................................................................................... 50
5.3 Discussion .................................................................................................................... 51
5.4 Conclusion ................................................................................................................... 58
5.5 Recommendations ........................................................................................................ 60
REFERENCES ................................................................................................................. 61

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APPENDICES .................................................................................................................. 71
APPENDIX I: INTRODUCTION LETTER ................................................................. 71
APPENDIX II: QUESTIONNAIRE .............................................................................. 72
APPENDIX III: IRB RESEARCH APPROVAL ......................................................... 77
APPENDIX IV: NACOSTI PERMIT ............................................................................ 78

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 LIST OF TABLES
Table 3.1: Population Distribution .................................................................................... 27
Table 3.2: Sample Size ...................................................................................................... 28
Table 3.3: Questionnaire Reliability Results ..................................................................... 29
Table 4.1: Frequencies for Mobile Payments Mobility and Performance ......................... 35
Table 4.2: Descriptives for Mobile Payments Mobility and Performance ........................ 36
Table 4.3: Correlation Analysis for Mobile Payments Mobility and Performance ........... 37
Table 4.4: Model Summary for Mobile Payments Mobility and Performance ................. 38
Table 4.5: ANOVA for Mobile Payments Mobility and Performance .............................. 38
Table 4.6: Coefficients for Mobile Payments Mobility and Performance ......................... 38
Table 4.7: Frequencies for Mobile Payments Costs and Performance .............................. 40
Table 4.8: Descriptives for Mobile Payments Costs and Performance ............................. 41
Table 4.9: Correlation Analysis for Mobile Payments Costs and Performance ................ 42
Table 4.10: Model Summary for Mobile Payments Costs and Performance .................... 43
Table 4.11: ANOVA for Mobile Payments Costs and Performance ................................. 43
Table 4.12: Coefficients for Mobile Payments Costs and Performance ............................ 44
Table 4.13: Frequencies for Mobile Payments Credit Accessibility & Performance ........ 45
Table 4.14: Descriptives for Mobile Payments Credit Accessibility & Performance ....... 46
Table 4.15: Correlation Analysis for Mobile Payments Credit Accessibility and
Performance ....................................................................................................................... 47
Table 4.16: Model Summary for Mobile Payments Credit Accessibility and Performance
………………………………………………………………………………..48
Table 4.17: ANOVA for Mobile Payments Credit Accessibility and Performance .......... 48
Table 4.18: Coefficients for Mobile Payments Credit Accessibility and Performance ..... 49

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 LIST OF FIGURES
Figure 4.1: Response Rate ................................................................................................. 31
Figure 4.2: Respondents’ Gender ...................................................................................... 32
Figure 4.3: Respondents’ Age............................................................................................ 32
Figure 4.4: Respondents’ Level of Education.................................................................... 33
Figure 4.5: Years in Business ............................................................................................ 33

xii
 LIST OF ABBREVIATIONS AND ACRONYMS

ANOVA: Analysis of Variance

ATM: Automated Teller Machines
GSMA: Global System for Mobile Communications
IRB: Institutional Review Board
IT: Information Technology
MSEs: Midsize Enterprises
MSMEs: Micro Small and Medium Enterprises
NACOSTI: National Council for Science, Technology and Innovation
SMEs: Small and Medium Enterprises
SPSS: Statistical Package for Social Science
TAM: Technology Adoption Model

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 CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
In the 21st century the penetration of mobile devices and wireless networks across the
globe and within the country has enabled the Kenyan Small and Medium Enterprises
(SMEs) to experience environment friendly communication, marketing and payments
systems solely available to the government firms and big organizations in the past
(Catherine & Margaret, 2015). In the earlier days mobile telephones presented voice
conversation however they have continued to develop and turn out to be all-purpose
equipment with value added services such as, mobile cash transfer services, data and
Internet services which have resulted to enhancing the mode of business operations by
SMEs. As a result of evolvement of technology, the cost of mobile phones as well as
computers has continued to become affordable thereby making their adoption much
easier. Due to these social-economic disparities has decreased immensely within Kenyan
SMEs thereby resulting to minimizing the digital gap between the rural and urban small
and medium businesses (Jack & Suri, 2016).

Omwansa (2016) explains that with the accelerated uptake of cell smartphone services, a
high number of Kenyans have registered in numerous mobile cash service within the
country. Therefore, it means that most transactions in the recent past can be performed
using mobile money as a substitute of cash. Mobile cash provides a service that approves
the sender and receiver to be in a position to get the information regarding the
transactions that are being made thereby becoming a more transparent mode of cash
transfer. The regular performance of this service makes transaction records very
dependable and in challenges that usually occurs is as a result of the customer entering
the wrong information or performs wrong transaction. The effectiveness of the mobile
many transfer has enabled the SMEs to be in position of expanding their business as a
result of the mobile many transfer effectiveness.

According to Nyanga (2015) the presence of mobile money platforms enables the users to
be in position of adding a credit score to their cellular account and hence perform
transactions later as a result of the facility provided of depositing the cash. Some of the
facets like transfers, storage and payments makes it possible for the subscribers to build

1
extra financial services as a result of mobile money platforms. The mobile money
services allows the subscribers to be able to borrow loans which enable the business
people to be in a position of perform business activities with ease in that they borrow the
loans and pay them later there resolving the problem of acquiring loans which has been
very rigorous and tedious for the small business enterprise to get financial support from
the finical institutions.

Bagana and Muturi (2015) affirm that in spite of the challenges that are available in
transferring of cash to wrong numbers, fraudsters and conmen agents as well as the
expense’s involved during transactions with other networks, system breakdowns and
delays, the mobile money transfer services has contributed greatly to the small and
medium enterprise sector in that a high number of the businessmen usually rely on this
money transfer services as compared to the banking sector for their daily transactions as
explained by Catherine and Margaret (2015). The adoption of mobile money services by
the SMEs is as a result of its efficiency, affordability, well developed agent network and
convenience as compared to other forms of financial services.

Omwansa (2016) opines that mobile money has proved to be attractive majorly to the
SMEs as a result of its service being cheaper as compared to mobile cash transfer services
such Western Union during the money transfer among individuals or business partners.
The advantages can be experienced especially when transferring money between the
buyer and the seller during business transactions between traders and business. One of the
major advantages of the mobile cash transfer is because mobile cash transfer is
instantaneous the same way as the cash transaction. Therefore, the mobile money transfer
is very fundamental in reduction of time during transactions thereby increasing the level
of convenience as compared to cash transaction which in some instances tends to
consume time. Mobile money is known to be liquid enough in that it allows easy and fact
conversion thereby assisting in convenient access to other agents in numerous locations
(World Bank, 2016).

According to Donner and Escobari (2015) utilization of the mobile money services is key
in enabling the SMEs to have economies of scale in that they are in a position of
procuring materials as well as goods thereby reducing the supply chain of the traders

2
hence being largely preferred by the SMEs as an effective mode of transferring cash.
Wanyonyi and Bwisa (2016) found that a high number of SMEs usually use the mobile
transfer services in business to business transactions as well as hence making their
purchases from suppliers and also customer to business while costumers are buying
products or goods from the business as well during collection of debts from the credit
sales thereby resulting to the improved performance of the small and medium enterprises.

Aron (2018) states that the adoption mobile money services is as a result of the significant
reduction of costs during transactions among businesses as compared to the other
financial services. This is because the is reduction in in time and travel costs, opportunity
costs, reduction in coordination costs as well as delays in money transfer. The availability
of mobile money payments greatly improved the financial structure in many developing
countries in that the banking structures are rigorous such as charges on bank accounts that
are largely too high thereby making its not attractive to many small medium enterprises
and hence the evolving of mobile money transfer brought along with improve
accessibility of many transactions as a result of vast network of agent. Moreover, mobile
money transactions are safer and have increased level of privacy as well enabling
businessmen to save regularly.

Xena and Rahadi (2019) indicate that many businessmen prefer the mobile money
payment as compared to traditional paper-based payment methods as a result of the risks
involved such as robbery and theft cost, individuals involved in handling cash. But the
mobile money transfer and payment has eliminated largely the number of risks as a result
of security measures in that digital payments have a high level of advantages such faster
payouts, cost savings, transparency in transactions, better tracking, reduction in time use,
user-friendly, increased trust, better tracking and expense control. In the recent past the
digital form of payments have been encouraged due to the development of technology
and the support that it has received from the management as well as government in the
usage of digital payments (AlBar & Hoque, 2019).

At the global level Callen, Ghani and Koepke (2015) conducted a study in Afghanistan
and found that the adoption of the mobile money has significantly increased the level of
efficiency on administration of salaries by the SMEs, as well as additional saving

3
individuals who have subscribers for the mobile money. Various businesses and
organizations use the mobile money payments systems in payment of salaries to their
employee through the digital platforms which have been found to be safe and convenient
by the employers and the employees. In India, Sivathanu (2019) did a study on adoption
of digital payments systems and revealed that ease of use, trust, convenience, security,
information technology (IT) skills, benefits awareness, flexibility, entrepreneur
characteristics, behavioral intention to innovation resistance and use digital payment
system, perceived benefits and perceived ease of use.

Regionally, Riley (2019) examined mobile money in terms of transfers and payments in
Uganda and Tanzania and found that an over 30 percent of Ugandan population are
actively using the mobile many payments and the platforms has resulted to creation of
employment for over 200, 000 jobs in the mobile money industry. The study revealed that
a high number of SMEs receive loans through the mobile money platforms thereby
resulting to boosting their business as a result of easy availability of capital through
mobile loans. In Tanzania Riley found that a high number of entrepreneurs have also
adopted the mobile money and has enabled their business to experience growth and
development in that they are in a position of conducting business activities with ease as
well as acquiring loan services form the same platform.

Locally, Jack and Suri (2016) studied longer-term effects of mobile money adoption in
Kenya and found that the consumption levels of the mobile money per capita has
continued to increase as a result of the adoption of mobile money. The study found that
an increase on mobile agent has been on all time high thereby enabling small and medium
enterprises to be able to perform business transactions with ease thereby changing the
financial behavior among the individual as well as the businessmen as a result of
improved financial resilience as well as addition savings. In addition, the study found that
the mobile money sector has also been able to create job opportunities thereby decreasing
the level of unemployment in the country. Similarly, Beck Pamuk, Ramrattan and Uras
(2018) conducted and study on payment technology adoption and finance on randomized-
controlled-trial with Kenyan SMEs. The study found that many businesses have
experienced growth as a result of adoption of mobile money hence resulting to

4
macroeconomic development due to improved access to supplier credit, reduced risk in
theft, boosting firm-level performance and reduction on overall output losses.

1.2 Statement of the Problem

Recently, the emerging mobile payments technologies have been fundamental on the
growth and development of business. This has been as a result of the enhancement of the
financial inclusion as a result of creation of an efficient decentralized financial supply
chains (Téllez & Zeadally, 2017). In Kenya usage of mobile phones has been one of the
latest developments within the country which has played a significant role on
revolutionizing the mode of business operation especially the micro businesses. Micro
business holder is with the country are always on the front line in embracing new
technologies which are available in the market therefore being the first one to embrace
changes within their business environments. Caporaso and Madeira (2014) assert that
presence of mobile payment platforms has played a fundamental role on enhancing the
effectiveness of business operation especially business and customers as well as business
and banks through the utilization of mobile banking platform which encourages business
growth.

According to Ndemo and Weiss (2016) the adoption of mobile payment solution has been
significant to both unbanked and banked user in totality due to their reliability and
usefulness. This has led to the micro-business holders to adopt the mobile payment
technologies in that it has offered their businesses many opportunities such as access to
loans, settling payments with the supplier as well as receiving payments from their
customers which is easy and convenient method of doing business. the reduction of
handling cash as a result of the emergence of the mobile payment technologies has also
increased the level of liquidity within business as compared to cash in that the transfer of
cash is faster and efficient hence enabling business owners to be able to perform business
transaction with ease as well as checking their account balances hence being in a position
to manage their accounts more easily (Mezghani & Aloulou, 2019).

Few studies have been conducted in evaluating the influence of mobile payment solution
on the overall SMEs performance. A study by Bwisa (2014) on the effect of Mpesa on the
performance of Kenyan business focused primarily on M-Pesa hence not exploring other

5
mobile payment solutions thereby making it is hard to generalist the findings. Chimaobi
and Chizoba (2014), study revealed that mobile business facilitated communication with
reference of specific user thereby not examining on SMEs. Moreover Ngaruiya, Bosire
and Kamau (2017) respectively conducted studies which found that the adoption of
technological innovation provided opportunities to a cashless economy. Mbogo (2011)
indicates that most of studies regarding mobile technology has been widely conducted in
those countries that are developed thereby not reflecting on the effect on the growth and
success of micro-business in different business environments in a developing country like
Kenya. It is against this background that this study sought to examine the efficacy of
mobile payment solutions on performance of small and medium enterprises in Kamukunji
trading center.

1.3 General Objective

The general objective of the study was to examine the efficacy of mobile payment
solutions on performance of small and medium enterprises in Kamukunji trading center.

1.4 Specific Objectives

1.4.1 To determine the effectiveness of mobile payments mobility on performance of
small and medium enterprises.
1.4.2 To examine the effect of mobile payments costs on performance of small and
medium enterprises.
1.4.3 To establish the influence of mobile payments access to credit on performance of
small and medium enterprises.

1.5 Significance of the Study

1.5.1 SMEs
This study may be of great benefit to the SMEs operators or owners in that the findings of
this study provide the advantages of the adoption of mobile money payment solution in
their business by enabling them to increase their usage such as money transfer and
transaction. In addition, it provides the opportunity for the SMEs to understand the impact

6
of technological innovations in their business thereby increasing the development in their
business.

1.5.2 Development Partners and Government Agencies

The study may be of benefit to the technology providers, development partners as well as
government agencies to understand the influence of mobile money service technology on
the growth of SMEs. This may enable them to be in a position of providing better advice
as well as technical support to their clients and also development of new innovations. The
government may further be in position to provide the required regulations that are
necessary in ensuring smooth operations.

1.5.3 Researchers and Academicians

This study on the efficacy of mobile payment solutions on performance of small and
medium enterprises in Kamukunji trading center may be of benefit to future scholars who
may use the study finding as the basis of their studies. They would find a foundation for
the effect of mobile payments mobility, costs and access to credit on the performance of
small and medium enterprises.

1.6 Scope of the Study

In this study, the area of research was to determine efficacy of mobile payment solutions
on performance of small and medium enterprises. The scope of the study focused on
SMEs’ in Kamukunji trading center. Kamukunji trading center was considered to be
appropriate for this study since, it had a big number of SMEs thus providing a fertile
ground for the study. The actual fieldwork took place between June 2021 and July 2021.

The study faced a few challenges. The first was the method of data collection used which
was hand delivery method. This prolonged the duration of data collection than expected,
and the researcher had to use the drop-and-pick method to hasten the process. The other
challenge was resistance from the target population to participate in the study. This was
minimized by satisfactory explanation to the respondents about the purpose of the study,
and the use of debrief and consent forms. The explanation on privacy and confidentiality
of the respondents’ information also encouraged the respondents to participate in the
study.
7
1.7 Definition of Terms
1.7.1 Mobile Payments
This usually involves the exchange of money between users in return to exchange of
goods and services (Opati & Gachukia, 2019).

1.7.2 Small and Medium Enterprises

These are enterprises that it has under 500 employees in the developed countries and
below 100 employees in the developing nations (UNCTAD, 2011).

1.7.3 Mobile Money

This refers to the services whereby the customers make use of their mobile phones in
sending, transferring as well as receiving money electronically (Senso &
Venkatakrishana, 2016).

1.8 Chapter Summary

This study focuses on how mobile payments solution influence the performance of the
SMEs. The chapter has provided the study’s background, and the problem statement. The
chapter also focused on the scope of the study as well on the various stakeholders who
tend to benefit from this study. The chapter has as well presented the study’s general and
specific objectives thereby ending with the definition of key terms. Chapter two presents
the literature review, followed by chapter three presenting the research methodology.
Chapter four is the results and findings, while chapter five presents the study discussion,
conclusion, and recommendations.

8
 CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter presents the literature review on efficacy of mobile payment solutions on
performance of small and medium enterprises. The chapter is organized into various
sections namely; mobile payments mobility, mobile payments cost, mobile payments
access to credit and chapter summary.

2.2 Mobile Payments Mobility and Performance of Small and Medium Enterprises
According to Kim, Mirusmonov and Lee (2016) mobile mobility refers to the ability of
accessing mobile phone services as well as performing transaction using a mobile
network through a variety of mobile devices. Hamza and Shah (2018) define mobility as
the availability of making use of the mobile phone to transactions through mobile
payment solutions. In the 21st century the level of mobility has increased as a result of the
continued development of technology in across the globe with its invention in the
developed countries having made use of technology advancement on digital money
transfer thereby resulting to ease of business operations within the business environment.

Penetration of mobile payments platforms to the developing countries which the level of
mobility across the countries have continued to increase especially in the business
environment and majorly the micro-business which have benefited largely by the mobile
mobility level which has increased tremendously (Mallat & Rossi, 2015). Research by
Kim et al., (2016) revealed that the mobile payment solutions mobility has been adopted
as a result of the perceived usefulness of the services. In addition, there have been
numerous challenges on the mobile money mobility as a result of poor mobile
infrastructure thereby affecting the mobile mobility in some of developing countries
(Anthony & Mutalemwa, 2017).

2.2.1 Perceived Ease of Use and Performance of Small and Medium Enterprises
Hidayanto, Hidayat, Sandhyaduhita and Handayani (2015) allude that the perceived ease
of use is the degree to which an individual accepts that utilizing the framework would be
free of mental and physical exertion. In bolster, Özkan, Bindusara and Hackney (2015)
found a critical relationship between ease of use or convenience and purposeful to utilize

9
the advanced installment framework. Hidayanto et al., (2015) examined the impacts of a
few variables and behavioral eagerly within the e-payment framework. The research
analyzed the 203 Indonesian clients and found a noteworthy relationship between social
impact and purposeful to utilize the mobile payment platforms. Fatonah, Yulandari and
Wibowo (2018) moreover reveled that there are positive impacts of social impact on the
making use of digital payment systems.

Shin (2015) found that subjective standards, based on social impact, features a substantial
noteworthy effect on behavior intention, thereby inferring that clients are affected by their
peers in adopting digital mobile payments. Karahanna, Strauband and Chervany (2015)
insinuate that social impacts tend to decrease the risks that might be perceived since it
gives dependable to prove to show the authenticity and suitability of the acknowledgment
(pre-adoption) and selection (post-adoption) decision. Shin (2015) assert that perceived
ease of use in M-payment can incorporate ease dealing, quick handling of the installment
exchange, a high number of accepting vendors, easy learnability of payment procedure,
and no mobile device program, and no necessary pre-registration.

Few researchers currently utilized perceived usefulness and perceived ease of use as
indicators for clarifying intention to utilize technology (Shin, 2015). Venkatesh, Thong
and Xu (2017) accepted that the encounter directed the impact of perceived ease on
perceived usefulness. With expanding experience, the effect got to be more grounded
over time. Indeed, in Tanzania, Chachage, Kamuzora and Malima (2017) found that effort
is comparative to perceive ease of use emphatically, affected the behavioral intention use
of m-payment services among College students. Consumers who accept that m-payment
services are more comfortable to utilize and valuable will have a high level of intentions
towards using the framework. Consequently, the study hypothesizes that the perceived
ease of m-payment positively impacts the perceived usefulness and behavioral intention
to adopt mobile payment solutions.

Pagani (2015) affirms that many micro-business operators recognize that mobile payment
is easy to use and doesn't need any formal training to begin to use the services. The
availability of mobile payment platforms can't compare to bank branches and automated
teller machines (ATM) points because mobile payment services are readily available in

10
Kenya. Given M-Pesa versus these other modes of payments services, the substantial
development of client numbers for M-Pesa appears that the introduction of M-Pesa has
expanded Kenya's method of payment infrastructure. With all these advancements, Lipa
na M-Pesa, which may be M-Pesa's product, is still at its earliest stages as can be derived
from the respondents' input. Micro-business operators currently go to the bank less
frequently and spend more time running their businesses. Similarly, numerous unbanked
Kenyans can presently receive or send cash wherever they are within the nation. The
lion's share of the micro-business operators understands mobile payments solutions
(Omwansa, 2016).

2.2.2 Perceived Usefulness and Performance of Small and Medium Enterprises

Davis (2015) suggests that perceived usefulness is the degree to which an individual
accepts that using a particular system would upgrade their work execution. The perceived
usefulness is characterized as the degree to which an individual acknowledges that the
utilization of digital payment solutions will progress his or her performance in everyday
exercises in their study. This refers to how mobile payment solutions can help customers
attain their task-related objectives, such as effectiveness (Chitungo & Munongo, 2016).
Numerous studies revealed that perceived usefulness had a remarkable impact on digital
money transfer platforms. One of the determinants for the moderate dissemination of
mobile payment solutions might be the disappointment in introducing a clear advantage
of utilizing digital mobile payment solutions to potential clients. Clients are willing to
acknowledge that technological innovations have certain benefits than the current
payment model (Sayid, Echchabi & Aziz, 2015).

Hamza and Shah (2018) revealed that the mobile payment digital platforms' utilization is
profoundly influenced by the availability of the mobile devices that incorporate,
localization, personalization, Convenience, ubiquity, and the stability of the network.
Perceived usefulness is the foremost critical determinant to anticipate consumers'
intention to adopt mobile payment solutions in Malaysia and demonstrated that perceived
usefulness played a crucial part in influencing the behavioral purpose of implementing
new technological innovation. Sayid, Echchabi and Aziz (2015) researched Somalia's
mobile financial services adoption using the Technology Adoption Model (TAM). They
included perceived risk, security, and social influence, and they found that perceived

11
usefulness and social impact are the only significant components impacting the adoption
of mobile financial services. Past studies illustrate that perceived usefulness is
emphatically connected with the behavioral intention to utilize mobile payment solutions
(Kim et al., 2016).

2.2.3 Convenience and Performance of Small and Medium Enterprises

Clarke (2015) claims that Convenience is related to the components generating time and
place for shoppers and highlights mobile payment solutions. Many SMEs adopted the
digital payment solution to conduct financial transactions Wamuyu, Kanyi and Maharaj
(2016) detailed a considerable positive impact on SMEs' financial performance and
digital mobile payment solutions. However, Ngaruiya, Bosire and Kamau (2017) found
an inconsequential impact of digital mobile money on SMEs' sales turnover. The effect of
digital mobile payments solutions remains uncertain and unaccounted for entirely. Njenga
(2016) states that even though the mobile phone equalization could seem low, the reality
that there are equalizations demonstrates that there's the capacity to acknowledge the
mobile money deposits. Typically, a noteworthy sign of the high value placed put on the
Convenience related to the utilization of mobile payments solutions. Omwansa (2016)
states that misplaced or stolen mobile phones do in any way lead to the loss of many that
are deposit on M-Pesa account in that the level of security is high; it requires a personal
identification number (PIN). Omwansa (2016) clarifies that M-Pesa gives both comfort
and security in a nation where many individuals have no bank accounts. Individuals walk
around with their virtual cash, knowing they can pull back money any time at a nominal
charge.

2.2.4 Perceived Trust and Performance of Small and Medium Enterprises

Dass (2016) characterize that trust is a mental desire that a trusted individual will not
behave craftily. Trust is profoundly conducive to such cognitive strengths as desires,
states of mind, eagerness, and perceived probability. The higher levels of trust in
providing a service will lead to more intention to conduct mobile baking transactions
(Masinge, 2016). Earlier studies revealed that customers' trust has positively impacted
perceived usefulness and ease of use (Saprikis, Markos & Vlachopoulou, 2016). Bångens
and Söderberg (2017) note that faith in any form of digital payment system is affected by
security, the amount of control that the clients have, reliability, and the network's

12
stability. Due to the inalienable nature of digital mobile payments, trust is accepted to
impact straightforwardly or by implication the intention of acceptance as well as the
adoption of digital mobile payment services as a result of different vulnerabilities
available to digital mobile payments solutions such as identity theft and frustration and
unavailability of mobile payment services as a result of network failure. A study by
Anthony and Mutalemwa (2017) in Tanzania uncovered that trust had negative impacts
on the intention to adopt the digital mobile payment solutions. The standard levels of trust
in Tanzania are low due to fear and envy. Once trust is built up through quality service
provision, clients are more likely to have more major faith in the perceived usefulness and
ease of use of mobile payment solutions and hence embracing the services (Kabanda &
Brown, 2015).

Yeboah, Boateng, Owusu, Afful-Dadzie and Ofori-Amanfo (2020) assessed the role of
trust in merchant adoption of mobile payments in Ghana. The findings demonstrate that
the role of merchant trust is very critical for adoption due to m-payment technology and
security risk. Hence, sufficient trust-building structures in mobile payment space are
essential for the adoption of mobile payment by merchants. Moreover, the findings
indicate mobile service provider characteristics and the mobile technology characteristics
are both imperative toward building trust in mobile payment systems for merchants’
adoption. The study also found that the trust of both technology and service provider has
a far more critical influence on merchants’ adoption of mobile payments than perceived
usefulness or ease of use

2.2.5 Perceived Security Risk and Performance of Small and Medium Enterprises
The critical benefit of mobile payment solutions is the security (Lee, 2015). Past studies
indicated that that perceived security risk impacted emphatically the intention to adopt
mobile payment solutions in Tanzania (Tossy, 2018). Similarly, Kihoma (2016) revealed
that digital mobile payment solutions are more secure, simple to handle, and accessible at
any time among women engaged in agribusiness in Tanzania. In Tanzania, many digital
mobile payments are concerned with security issues due to numerous components such as
the absence of knowledge about the digital mobile money, legal infrastructure, and
unseemly security lack of information (Mathias, 2015). For example, Senso and
Venkatakrishnan (2016) revealed that Tanzanian digital mobile money users face fraud

13
risks due to numerous issues such as swapping of SIM cards, unfaithful representatives,
and leakage of password, fake cash, and forged cash withdrawal.

Mallat and Rossi (2015) opine that the mobile payment system has changed payment
patterns and has the potential to improve people’s quality of life and increase the bank’s
efficiency. In return, the risks and trust factors inevitably led to increased challenges and
become a major concern in the adoption of mobile payment service. Hossain (2019)
conducted a research on security perception in the adoption of mobile payment and the
moderating effect of gender. Findings reveal that the perceived risk has a significant
negative impact on perceived trust and customer satisfaction. Perceived trust is the most
important variable in building customer satisfaction, and customer satisfaction is the
reasonable predictor of customer loyalty. In addition, gender differences moderate the
adoption of the mobile payment service.

2.3 Mobile Payments Costs and Performance of Small and Medium Enterprises
Cost is characterized as the degree to which an individual accepts that utilizing mobile
banking will amount to a certain cost (Chitungo & Munongo, 2016). The cost may
incorporate the value-based charges within the network charges for sending
communication activity and the mobile device's cost. Lule (2015) concurs that cost-
benefit design is critical to perceived usefulness and ease of use. Masinge (2016) posits
that low wages are price-sensitive as well as low purchasing power. Besides, Micheni,
Lule and Muke (2017) allude that in case buyers see that the cost involved in mobile
money is satisfactory, they will adopt it more effectively and, after that, utilize it. Dass
and Buddy (2016) found that financial costs normally harm mobile money services'
appropriation. Besides, the cost involved in adopting mobile money usually tends to
prevent individuals from receiving mobile money services if the charges involved are
quite high. Still, it can be an inspiration to a quicker adoption (Tobbin & Kuwornu,
2015).

2.3.1 Transaction Costs and Performance of Small and Medium Enterprises

Omwansa (2016) states that mobile money transaction costs, usually through the mobile,
many transfer technologies are lower than those of banks and cash exchange companies.
The payment cost transactions affect the consumers directly regarding the adoption of
14
mobile money due to the costs cost involved. Transaction costs ought to below to form
the cost of the exchange competitive. Mobile payment transaction costs should be
reasonable to most of the smaller scale traders and far below what the banks ordinarily
charge for their bank exchanges. Numerous distinctive mobile handsets are simple to
operate and have the functionalities required to adopt mobile money payments (Mallat,
2017).

Fatonah, Yulandari and Wibowo (2018) affirm that while advanced payment system
framework gives a few preferences such as direct exchange, quicker payouts, minimize
time use, user-friendly and cost control, etc. The progression in innovation empowers
payment worldview form of the paper-based mode of payment frameworks to the
advanced digitized systems. Also, in those developing countries, their government and the
management support the utilization of the digital form of payment (AlBar & Hoque,
2019). Micheni, Lule and Muke (2017) explored the impact of cost in a transaction on
mobile payments and facilitating conditions on the appropriation of mobile money
payments in Kenya. They uncovered that the cost of construction was not critical in
impacting the selection of mobile money services. Conditions that facilitated the adoption
of mobile money was critical in affecting its adoption. The research findings are opposite
to the discoveries of Omwansa, Waema and Lules (2015) who found that transaction cost
greatly influenced the adoption of mobile banking.

Simiyu and Oloko (2015) studied mobile money payments' role in the growth of small
and medium-sized traders in Kisumu and found the need to maintain the transaction cost
at a low level. This will make the transaction costs competitive and affordable to
business owners and low-income earners. This will contribute greatly to the high adoption
of the mobile many transfer platforms since the cost will be below what banks charges. A
report by the Global System for Mobile Communications [GSMA] (2017) revealed that
many farmers in Kenya had adopted mobile money payment in the purchase of farm input
as a result of low transaction costs. Wambua (2016) studied mobile money transfer
services' impact on Kenya's financial deepening and found that the payment system
through mobile money provides comfort, adaptability, and unwavering quality required
by low-income workers.

15
Kigen (2017) did a study on the effect of mobile banking on the cost of transaction
account of microfinance institutions and found that at that point, mobile banking y had
decreased the transaction costs impressively. However, they were not specifically felt by
the banks since, at that point, there was a small mobile banking client base. It altogether
failed to develop pertinent structures that would cultivate the discipline and lower
transaction costs in specific transactions that are of low value. The researchers found that
indeed with higher value-based costs involved in mobile money payment services, the
low-income workers will not be offered the opportunity to access the services
consequently have no choice but to incur high transaction costs.

Koloseni and Mandari (2017) in Tanzania examined the reasons behind the ceaseless
utilization of mobile money payment services. They revealed that although both cost and
perceived trust decide fulfillment towards mobile payments, only the latter influenced
consumers to adopt the mobile money payment platforms than perceived cost. This
demonstrates that the sum charged by mobile money services is actually to the providers
because it is affordable and reasonable. The research demonstrates that the direction of
deciding the relationship that is there between perceived trust, as well as cost, do have a
negative impact when it comes to the fulfillment of mobile payment service clients. In
any case, the author indicates that the fortified relationship was not a solid one that might
cause a critical impact on satisfaction.

Most mobile money-related transactions usually attract a fee such as withdrawal, sending,
and service payment, which are primarily forwarded to the consumer to pay the expenses.
Koloseni and Mandari (2017) agreed that the behavioral choice hypothesis, the cost-
benefit design is critical to both perceived value and ease of use. Transaction costs have
been investigated in other innovation appropriation studies Gilham and Beauty (2015);
Das and Buddy (2016) and the analyst proposed investigating it. Other analysts such as
Qingfei (2015) contend that cost could be a user's evaluation of the protest world or
reality and not his/her discernment. Cost factors ought to subsequently straightforwardly
influence the user's appropriation conduct.

16
Narteh, Mahmoud and Amoh (2017) in their study, found that the level of appropriation
of mobile cash services is emphatically related to perceived benefits related to the
selection thereof. Lubua and Semlambo (2017) agree and demonstrate that clients receive
mobile cash since they perceive financial gains. Lubua and Semlambo (2017) continue to
indicate that the mobile cash services innovation is embraced when clients accept that
they can make a trade out of it. Wamuyu (2016) attests that mobile cash services'
appropriation has multiplied among clients since it offers key benefits. These benefits
incorporate ease of utilization, comfort, and its capacity to cut costs. Kikulwe, Fischer
and Qaim (2015) also found an interface between perceived benefits such as time sparing
and minimized transaction costs with purposeful to make use of mobile payment systems.

Simiyu and Oloko (2015) contend that the accessibility of mobile money transactions
broadens SMEs' client base, given the reality that the lion's share of the country's people
presently has access to a mobile phone. Moreover, the openness, comfort, and lower costs
nature of the mobile transactions has come about within the development of SMEs trade
exercises, particularly in rural regions (Simiyu & Oloko, 2015). Nyaga and Okonga
(2017) contend that mobile cash transactions ordinarily enhance the overall performance
of SMEs. Kirui and Onyuma (2015) agree that transactions involved in mobile money are
simple in the way payments are made. Kirui and Onyuma (2015) insinuate that mobile
money payment usually improves SMEs' performance through cost-saving, time
management, and flexible transactions as they can be undertaken at any given time.

2.3.2 Financial Costs and Performance of Small and Medium Enterprises

Perceived financial cost includes all transaction costs, registration, and purchasing of new
devices in the transaction of financial services. Tobbin and Kuwornu (2016) affirm that
the transaction cost usually impacts the conduct behavior on the uptake of mobile
payment platforms. Concurring to Mathieson, Peacock and Chin (2016) financial
inspirations and results are regularly the focus centers. The cost involved in mobile
money services is thought to prevent numerous individuals from choosing mobile money
payment platforms (Luarn & Lin, 2015). Besides, hardware/software and budgetary assets
are vital for clients of a data framework. Financial costs are likely to impact the user's
deliberate intention to adopt mobile payment solutions (Mathieson et al., 2016).

17
Onyango, Ongus, Awuor and Nyamboga (2017) allude that mobile money makes strides
in improving marketing productivity, encourages coordination, and decreases risk
exposure since there is no cash involved. Gencer (2015) contends that mobile payments
empower SMEs to save costs, which primarily affect their profitability. Mobile payment
platforms empower businesses to offer merchandise and services remotely. Litondo and
Ntale (2016) and Jagun, Heeks and Whalley (2008) found that mobile cash significantly
helps SMEs in saving a lot of time taken when performing transactions and payment of
goods. Firms which are able to offer non-cash payment methods are likely to either
acquire new customers, increase the retention of old customers or spur customer demand,
thereby impacting sales. Beck et al. (2018) studied the effects of a payment technology
innovation on entrepreneurship in a quantitative dynamic general equilibrium model,
calibrating it with firm-level survey data from Kenya. They show that the adoption of
mobile money improves firm performance by allowing for more efficient transfers,
through the reduction in risky cash-holdings, and increased access to credit. In their
model, the improvements in firm performance deriving from payment technology
adoption lead to quantitatively significant macroeconomic effects.

Firms are likely to accept electronic modes of payment, despite, in some cases incurring
costly surcharge fees to avoid missed sales. Bourguignon, Gomes and Tirole (2019)
describe missed sales as an occurrence when the customer has a high inconvenience cost
of paying by cash, and is discouraged by either a high electronic payment surcharge or its
non-acceptance. Wieser (2019) find that the increased use of mobile money lowers the
use of informal savings mechanisms and increases remittance transactions (respectively).
Aggarwal, Brailovskaya and Robinson (2019) also posit that the improved transaction
efficiency from the QR-code based payment technology could promote demand, leading
to a genuine increase in consumer spending and provide evidence in favor of this.

2.3.3 Perceived Processing Fee/Cost and Performance of Small and Medium

Enterprises
A perceived fee is characterized by the money related costs of employing a mobile
framework. Kim et al. (2016) state that new customers usually compare the costs with
other digital payment platforms before adopting the new systems. The costs involved in
sending cash through the mobile payment systems are usually lower than those of banks
and other companies that offer the same digital payment transfers (Omwansa, 2016).
18
Kirui and Onyuma (2015) contend that basically, businesses pay the costs of traveling
using cash. The cost of securing the money, storing time is taken to go to the banks, the
cost of processing, and other charges. Numerous of these points are usually addressed
using payment cards, but the payment cards come with their costs. There are the by and
high costs of payment in handling and the covered-up costs of the framework. Mobile
payments platforms, especially mobile wallets, in the meantime, offer up a few real focal
points that will moderate numerous of these costs and remove a few costs from the
framework. A mobile wallet can utilize a store-branded card as its base, which expels
compatibility expenses (Mararo & Ngahu, 2017).

Otiso, Simiyu and Odhiambo (2016) inspected the impacts of deal income from utilizing
mobile cash exchange on the small scale's productivity and little undertakings in
Bungoma District. The researcher revealed that nearly every trade claimed or had utilized
a mobile phone in their commerce, which instruction level and term of running the trade
impacted the productivity of a trade. Other major discoveries were that mobile cash
exchange services are the most special rate of utilization among the respondents as
restricted to the conventional way of banking and money transfer companies because it
diminishes their transportation costs and dangers when sending cash. Mobile Cash
exchange services are moreover evaluated over normal and help midsize enterprises
(MSEs) to reduce costs. It decreases the recurrence of attending to the bank, i.e., it spares
time; consequently, people get more time to run their businesses. In expansion, exchange
expenses are lower than those charged by most banks, and it's simpler to utilize it when
paying for clients and clients, leading to an increase in sales revenues.

2.4 Mobile Payments Credit Accessibility and Performance of Small and Medium
Enterprises
According to Nair (2015), SMEs' accessing long-term credit empowers them to depend
on high-cost term financial returns. These troubles stem from the more formal loaning
firms, which rated all SMEs endeavors similarly as un-credit worthy (Omwansa, 2016).
In any case, less formal education on loans on mobile banking doesn't ease this burden.
These microcredit firms confront restricted development since of their constrained
reserves. Their primarily short-term financial return implies they cannot effortlessly save
into medium or long-term credits (Nzuki, 2016). Pagani (2015) explains that mobile
payment services are ordinarily viewed as a variation of banking, which is branchless
19
with the potential to convey financial services using the new system compared to the
current model of banking. This perception made by Raddi (2016) can substantially have
several valuable benefits to smaller-scale businesses, which incorporate access to
advances as well as depositing and saving to their banks through the use of mobile money
platforms.

2.4.1 Unsecured Loans and Performance of Small and Medium Enterprises

Unsecured mobile credits boost millions of Micro Small and Medium Enterprises
(MSMEs) over east Africa (Soderberg, 2017). Flexible overseeing an account
organization increases budgetary openness for both the spared cash and the unbanked
(Erickson, 2015). Within early 2007, 38% of Kenyans had no access to any frame of
money-related services, which might have contributed to quick portable managing an
account infiltration in Kenya (Kigen, 2017). The need for monetary services implies that
smaller-scale business proprietors cannot effectively spare or borrow cash (Omwansa,
2016). Accessing credit and managing an account permits miniaturized scale and little
trade holders to spare, which interprets expanded commerce execution. Expanded reserve
funds using versatile keeping money administrations increments the miniaturized scale
businesses' potential to secure financing that contributes to trade development (Koivu,
2015).

Omwansa (2016) affirms that SMEs can procure advances on investment funds and
spread their credit reimbursements over time. It ought to be noted that savings could be a
frame of the capital collection, which over time permits SMEs to grow their business
potential and capacity. Overviews exhausted fewer urban ranges of Ghana on commerce
related calls and costs related to such calls. Razak (2015) conducted that mobile money
proprietorship expanded their credits markets, contributing to productivity in conducting
their business. M-Pesa from Safaricom has been considered in detail by Njenga (2016)
who found certain utilization designs. Even though the M-Pesa isn't utilized for cash
capacity, it has this potential, although the fundamental reason has been sending and
getting cash (Ouma, 2015). Access to more modern money services through versatile cash
administrations like investment funds, credit, and protections may demonstrate more
useful (Donovan, 2015) to miniaturized scale endeavors. Versatile cash administrations
can be seen as a variety of branchless keeping money with the potential for the

20
conveyance of monetary administrations exterior customary keeping money (Pagani,
2015).

A modern overview uncovers the craving for bank credits among SMEs on a descending
drift. Compared to the past decades, the take-up of bank credits among SMEs declined by
29 percent in 2020 compared to over 80 percent seen as of now (Kigen, 2017). Although
banks have held the beat spot as the favored area for money deposits, there has been a
substantial 29 percent point drop between 2019-2020 conceivably due to expanded take-
up of portable cash as well as proceeded development of Chama sparing bunches whose
esteem recommendation incorporates uncollateralized credits, social assurance on issues
related to passing and trade interferences, backing, data, and mentorship among others as
famous by organization for SME get to fund (Tossy, 2018).

Wanambisi (2016) studied the impacts of mobile money banking loaning and SMEs'
performance in the Kitale Region uncovered that the sum of mobile banking loans is
essentially and emphatically related to SMEs' performance. Moreover, the researcher
found that credit dispensing, done through mobile phones, is instantaneous, permitting
clients to bypass conventions within the commercial banking frameworks. Research on
the effect of mobile credit on poverty in Ghana utilized financial and social factors such
as person salary, family development, and education access as benchmarks for measuring
the effect (Boateng, 2015). The researcher revealed a relationship between mobile money
banking credit facilitation to the SMEs and the benchmark factors and prescribed training
for recipients to guarantee proficient utilization of funds and the creation of sound
political and financial situations so that SMEs can flourish. The researcher also revealed
that individual borrowers and Micro-entrepreneurs are moving more towards mobile bank
loaning platforms as more tightly credit rules bolt them out of customary borrowing.

Bourke (2017) explains that the availability of credit, which is of low interest, is
considered a critical figure in expanding small scale businesses' performance. It's good to
note that the impact of mobile bank credit on SME's profitability has indicated a lot of
benefits (Leland, 2015). Essentially, credit availability is of low interest through the
mobile banking credit assist increments on small scale trade risk-bearing capacities; make
strides hazard adapting techniques and empowers utilization smoothing over time

21
(Kamau, 2015). The level of intrigued rates charged on the credits by the versatile banks
has a negative relationship with commerce execution parameters (Bourke, 2017). Mobile
loan services help micro-enterprises pay for their protection premiums, amass resources,
and get credit (Hajri, 2017). The MSE credit collections are critical, and with the help of
versatile cash, they can speed their collection and make buys and supplies (Wanyonyi &
Bwisa, 2016).

2.4.2 Credit Accessibility and Performance of Small and Medium Enterprises

Razak (2015) explains that businesses' success requires access to finances, whether equity
or debt. One of SMEs' major issues in developing their enterprises is through the
accessibility of capital, which can be accessed from moneylenders. The presentation of
mobile cash where SMEs act as specialists of the Network Operators gives a source of
capital for their trade. That's the case as clients of Network Operator do store their cash
with the SMEs, which give them cash that might be utilized as capital than getting a
credit from the Bank (Pagani, 2015). In any case, the money and the commission they get
from each exchange give them a few wages. On the other hand, the supporters do get to
comparable keeping money offices at a lower value-based charge when doing a pullback
and storing credit from and into his account at a specialist than what a bank would have
charged.

Donner (2015) researched d in Rwanda and found that SMEs usually benefit from mobile
money usage in trade operations. Kakwa (2015) made comparable perception in Ghana
that versatile fund moves forward client administrations not barring showcasing. Govil
(2017) discovered that businesses utilizing portable back, such as investment funds,
protections, and credit encounters progressed financial advance in their exercises. SMEs
are in a position of obtaining credit through the mobile fund that enables them to
accomplish the businesses' short-term needs. Ludewig (2015) asserts that mobile money
services usually benefit from financial openness in different ways. In addition to
providing a reasonable way to transfer money, results in the business's overall
improvement, among other factors. When investing in the bank through mobile cash, it
gives an assist component to borrow reserves based on reserve funds. Clients can deposit
money in their mobile cash accounts, save them for afterward usage, and pull back or
exchange them using an agent or an ATM.

22
Nyaga (2015) alludes that the availability of funds is usually considered a fundamental
determinant to any business enterprise's success. One challenge postured by SMEs is the
need for securities to act as collateral to enable the SMEs to access loans, particularly
from the financial institution's Bank charges that are impressively higher are among the
components that have contributed to low enrolment rates among SMEs. The need for an
account with the bank to form reserve funds may be a contributory calculate constraining
the SMEs' capability to access the funds. Must and Ludewig (2015) suggest that since
mobile cash permits the customers to deposit cash in their mobile account and store it for
performing transactions and transfers exchanges make it conceivable to construct
different monetary administrations inside the portable phone innovation. Prove appears
that growing get to among the needy to money related administrations is successful in
decreasing poverty. Destitute people without access to bank accounts are constrained to
depending on the informal cash economy like borrowing and family investment funds,
making them more vulnerable to dangers to save or borrow cash proficiently.

2.4.3 Mobile Finance and Performance of Small and Medium Enterprises

According to the World Bank (2015) mobile finance helps SMEs save cash on mobile
bank accounts and get credit, empowering them to purchase products and offer services to
their clients. The change in benefit delivery upgrades their trade exchanges. The SMEs'
failure to access credit is still a major issue that limits the mode of information of
venturing businesses and prevents others from extending and developing. This attestation
count with what built up that obligation collection, the need for working capital, and low
deals are among the beat five challenges confronting small scale businesses. These
challenges make smaller-scale endeavors need the financial capacity to broaden and
create (Ivatury, 2016).

Govil, Lopez and Martin (2017) carried a study on mobile finance's role and revealed that
M -banking greatly enhances businesses' financial development. Concurring to the
research, mobile banking speeds up the stream of products and services as a result of
creating a conducive climate for speculation and over all security. Onyango (2016) study
on effect of selection and utilize of mobile money innovation on the performance of
SMEs, found a positive relationship between mobile many utilization and the
performance of SMEs. Essentially, another study found that utilization of mobile money

23
among SME’s upgraded speedier reaction to customers’ needs, expanded inside
proficiency, and improved get access to modern markets, and lower operational costs
(Kakwa, 2015). Financial access is fundamental for developing both the small and micro
enterprises as it permits smaller scale business people to improve, progress proficiency,
grow to untapped markets, and give millions of employments (Mutua, 2017).

Gencer (2015) alludes that the growth of adoption of mobile money exchange done
relating to credit, protections, resource collections, reimbursements, and distributions
made. Numerous individuals depend on informal budgetary education for their money
related needs. They need to get credit, protection, and investment funds. The people and
businesses can secure credit from monetary teach and banks utilizing the phone gadgets;
also, MSEs can get credit from microfinance utilizing their phones on the off chance that
they are account holders in such institutions.

Govil, Lopez and Martin (2017) investigated mobile finance items like credit, reserve
funds, protections, and installments and concluded that they could contribute to both
businesses and family units' financial advances. Their productivity and adequacy permit
smooth utilization, secure exchanges and ventures, and possible security. Their evaluation
of the effect evaluation uncovered that both credit and investment funds increase
speculation and benefits for microenterprises. Porteous (2015) notes that modern
commerce implies have risen, such as microfinance and smaller-scale protections
utilizing versatile cash to pay their clients when making payment and advance
reimbursements. They transfer information to Safaricom for huge installments to
guarantee proper and convenient administrations to their clients. Although South Africa
has a few versatile administrations, Porteous concluded that these administrations
altogether extended monetary access.

2.5 Chapter Summary

This chapter has broadly evaluated on introduction, the literature review about the
efficacy of mobile payment solutions on performance. There is a positive relationship
between mobility and perceived usefulness of m-payment services that perceived ease of
use in M-payment could include ease handling, fast processing of the payment
transaction. Consumers perceive that the cost of mobile money is acceptable; they will

24
adopt it more easily and then use it. The financial cost to have a negative influence on the
adoption of mobile financial services. The next chapter consists of research methodology.

25
 CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This part presents the strategies that were incorporated by the research analyst during the
study. It contains design plan for the collection, estimation and examination of data. It
subsequently examines research design, target population, sampling design and technique,
modes of data collection, the research procedure and strategies for analyzing the data.

3.2 Research Design

Leavy (2017) states that research design is a framework for conducting a research project.
It details the methods essential for getting the data required to structure or solve problems
in research. It is actually a plan, structure and methodology of investigation conceived so
as to get answers to research questions. The work of a research design is to guarantee that
essential data is in line with problem at hand is accurately collected. Creswell (2015)
affirm that research design plan carries an imperative impact on the reliability of the
results. Descriptive research design was utilized in this study research. The researcher
made use of this form of design because it was valuable in enabling the researcher how
the independent variables (mobile payments mobility, cost reduction and access to credit)
influenced the dependent variable (performance of small and medium enterprises).

3.3 Population and Sampling Design

3.3.1 Population
According to Cooper and Schindler (2014) population can be clarified as a
comprehensive bunch of people, objects, institution and so forth with a common type of
characteristics that the researcher is interested on. In this research study the population
were all SMEs in Kamukunji trading center who were approximately 1041 and was
obtained from Nairobi County Council Registrar of Business. The study targeted the
managers as well as owners of these targeted SMEs’.

26
Table 3.1: Population Distribution
SME Category Population Percentage
M-pesa and Bank agents 439 42%
Electronic Shops 100 10%
Boutique Shops 299 29%
Restaurants 67 6%
Hardware shops 136 13%
Total 1041 100
Source: Nairobi County Council Registrar of Business (2021)

3.3.2 Sampling Design

3.3.2.1 Sampling Frame
According to Yin (2014), sampling is generally a way of selecting a particular portion of
the group to represent the complete group of population. A sampling frame should consist
of comprehensive and precise list of the population of the members. The study sampling
frame was primarily comprised of the manager and owners of the registered 1041 SMEs
that were operating within Kamukunji trading center. The sample frame was drawn from
the Nairobi county Council registrar of business and trading licenses county offices.

3.3.2.2 Sampling Technique

Cooper and Schindler (2014) explain that a sampling technique is the procedure which
the objects in a sample are selected and identified. In this research, stratified sampling
was utilized by the researcher whereby 5 strata of the business categories were used in the
classification of the business. Thompson (2012) claims that stratified sampling contains
all the components that usually make up a study population. The researcher was able to
get a representative sample from each and every individual cluster thus covering all the
businesses that normally operated within the Kamukunji trading center. Simple random
sampling was then used to select sample size elements from each stratum. A simple
random sample is a subset of a statistical population in which each member of the subset
has an equal probability of being chosen (Cooper & Schindler, 2014). Simple random
sampling was preferred because it eliminated the probability of the researcher introducing
bias during selection.

27
3.3.2.3 Sample Size
The sample size research is a term usually used for defining the number of subjects
included in a sample size. The sample size primarily ensures that the information
comprehensive as well detailed. For this particular research, Yamane (1973) formula was
used in determining the sample size of 91 respondents.

Where:
𝑛 = corrected sample size,
𝑁 = population size, and
𝑒 = Margin of error (MoE), e = 0.10
Therefore:

Table 3.2: Sample Size

SME Category Population Percentage Sample Size
M-Pesa and Bank agents 439 42% 38
Electronic Shops 100 10% 9
Boutique Shops 299 29% 27
Restaurants 67 6% 5
Hardware shops 136 13% 12
Total 1041 100 91

3.4 Data Collection Methods

According to Lescroel (2015) data collection is s procedure which involves gathering of
information on targeted variables in a way that is well established which enables the
researcher to relevantly answer the questions and evaluating the results. Primary data
collection was used in this study. This research study made use of questionnaires to
collected data. The questionnaires were in the form of closed-ended questions which were
very appropriate in gathering the data efficiently and timely from the respondents. A 5-
point Likert scale was structured by the researcher, and was divided into several segments

28
with the first segment comprising of general information and the other segments
organized in accordance with the research objectives. The questionnaire was divided into
five sections that focused on the demographic information, mobile payments mobility and
performance of SMEs, mobile payments cost and performance of SMEs, mobile
payments credit accessibility and performance of SMEs, and the final section focused on
SMEs’ performance

3.5 Research Procedures

The researcher prepared debrief and consent forms which were accompanied with the
research proposal to the Chandaria school of Business Institutional Review Board (IRB)
for approval to go to the field and collect data where the researcher was issued with an
IRB letter after approval. The researcher sought authorization from the National Council
for Science, Technology and Innovation (NACOSTI) for approval to collect data which
was issued with the NACOSTI research permit allowing the researcher to start collecting
data. The researcher performed a pilot test with 10 respondents to ascertain the validity
and suitability of the questionnaires. The Cronbach Alpha test was used to assess
reliability using the Statistical Package for Social Sciences (SPSS). According to Cooper
and Schindler (2014), the requisite threshold for study questionnaires is >0.7, and the
study applied the same. Table 3.3 indicates that the study questionnaire was reliable since
all the items had a coefficient of >0.7.

Table 3.3: Questionnaire Reliability Results

Questionnaire Item No. of Items Coefficient Result
Mobile Payments Mobility 10 .857 Reliable
Mobile Payments Cost 10 .714 Reliable
Mobile Payments Credit Accessibility 10 .879 Reliable
SMEs’ Performance 10 .785 Reliable
Overall 40 .898 Reliable

Structured questionnaires were used by the researcher in collecting the data which was
easy to understand and administer and take appropriately the shortest time possible where
the respondents were required to mark the appropriate areas in the questionnaires. The
researcher distributed 91 questionnaires to the SME owners and/or managers. Hand

29
delivery was applied by the researcher in collecting the data from the respondents where
follow-up was done by the researcher in order to ensure that adequate data was collected
by the researcher.

3.6 Data Analysis Methods

After ensuring that adequate data had been collected, the researcher organized the
questionnaires and prepared them for data analysis. The researcher carefully reviewed and
checked the questionnaires for consistency and completeness. Descriptive data analysis
was used in analyzing raw data which was presented using tables and figures. The
researcher also used regression analysis in establishing the nature of the relationship
between the dependent and independent variables. Statistical Package for Social Science
(SPSS) version 20 was used to analyze the data which was ideal in the analysis of the data
since it enabled the researcher to interpret and analyze quantitative data in the research.

3.7 Chapter Summary

This chapter focused on the methodology which was used in this research. This section
also explained the type of research design that was used and justified the importance of
choosing the methods that were applied performing the research. The chapter also
examines research design, target population, sampling design and technique, modes of
data collection, the research procedure and strategies for analyzing the data. The next
chapter is the results and findings.

30
 CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
The study results and findings obtained from the analyzed data have been presented in
this chapter. The chronology of the chapter comes from the questionnaire structure. The
chapter offers results for the response rate, demographic information, as well as results
for the influence of mobile payments mobility, mobile payments cost, and mobile
payments credit accessibility on SMEs’ performance.

4.2 Response Rate and Demographic Information

The section concentrated on the study's response rate and the distribution of demographic
data from the responses. These have been presented in the form of figures, and they
include an examination of the response rate as well as the respondents’ gender, age
bracket, level of education, and duration they had been in business.

4.2.1 Response Rate

The researcher circulated 91 questionnaires to the SMEs’ operating in Kamukunji, but
managed to collect 87. After cleaning the data, it was observed that 79 were completely
filled, and were used for analysis. This provided the study with a response rate of
approximately 86.8% as presented in Figure 4.1, and was deemed sufficient for the study.

Figure 4.1: Response Rate

31
4.2.2 Demographic Information
This section examines the demographic information of respondents, in particular their
gender, age bracket, level of education, and duration they had been in business.

4.2.2.1 Respondents’ Gender

The researcher wanted to establish the gender divide of entrepreneurs at Kamukunji, and
Figure 4.2 shows that 60% were male, and 40% were female. This indicates that both
males and females own SME businesses, and this also indicates that the result would not
be gender bias.

Figure 4.2: Respondents’ Gender

4.2.2.2 Respondents’ Age

The study examined the age bracket of the respondents and the results were as shown in
Figure 4.3. The results indicate that 51% of the respondents were aged between 31-40
years, 40% were between the ages of 21-30 years, and 9% were between the ages of 41-
50 years. This aligns with the country’s population.

Figure 4.3: Respondents’ Age

32
4.2.2.3 Respondents’ Level of Education
When survey participants were asked to specify their highest level of education, the
results are shown in Figure 4.4. According to the results, 44% had completed their
undergraduate degrees, 29% had completed their college diplomas, 15% had attained a
secondary certificate, 9% had completed their Master's degrees, and 3% had completed
their doctorates. This demonstrates that SME owners/ managers were well educated and
could easily understand the study questions.

Figure 4.4: Respondents’ Level of Education

4.2.2.4 Years in Business

The study sought to determine the duration the owner/managers had been in business, and
the results are shown in Figure 4.5. According to the results, 38% of the SMEs had been
in business for 6-10 years, while 34% had been in business for less than 5 years. Twenty-
seven percent had been in business for 11-15 years, and 1% had been in business for 16-
20 years. This shows that most of the SMEs had been in business for more than 5 years,
making them very reliable for this study.

Figure 4.5: Years in Business

33
4.3 Mobile Payments Mobility and Performance
The primary objective of the study was to determine the effectiveness of mobile payments
mobility on performance of small and medium enterprises. This section provides the
frequencies, descriptive, correlation, and regression analyses for the same.

4.3.1 Frequencies for Mobile Payments Mobility and Performance

Table 4.1 shows that most of the business transactions were done through mobile
payment solutions as agreed to by 93.7%, while 5.1% disagreed, and 1.3% were neutral.
Mobile payments were used in the business because they were easy to use as agreed to by
98.7%, while 1.3%. The adoption of mobile payments was influenced by increased of
demand of mobile mode of payments as agreed to by 96.2%, while 2.6% disagreed, and
1.3% were neutral. The use of mobile payments has not upgraded the businesses’
execution since the majority of the respondents 51.9% were neutral, while 27.9%
disagreed, and 20.2% agreed.

The use of mobile payments has not enabled the businesses to attain their goals and
objectives since the majority of the respondents 50.6% were neutral, while 35.5%
disagreed, and 13.9% agreed. The businesses had adopted the digital payment solution to
conduct financial transactions as agreed to by 93.7%, while 5.1% disagreed, and 1.3%
were neutral. Mobile payment solutions provide me with a sense of comfort and safety as
agreed to by 91.2%, while 5.1% disagreed, and 3.8% were neutral.

Higher levels of trust in mobile baking transactions by customers has led to the
businesses’ adoption of mobile payments as agreed to by 86.1%, while 8.8% disagreed,
and 5.1% were neutral. The businesses’ faith in mobile payment systems is not affected
by security issues as disagreed to by 67.1%, while 27.8% were neutral, and 5.1% agreed.
Perceived security risk had influenced the owners/managers intention to adopt mobile
payment solutions in the business as agreed to by 93.7%, while 5.1% disagreed, and 1.3%
were neutral.

34
Table 4.1: Frequencies for Mobile Payments Mobility and Performance
SD D N A SA
% % % % %
Most of my business transactions are done through 5.1 0 1.3 67.1 26.6
mobile payment solutions
Mobile payments are used in my business because 0 1.3 0 70.9 27.8
they are easy to use
My adoption of mobile payments was influenced by 1.3 1.3 1.3 70.9 25.3
increased of demand of mobile mod of payments
The use of mobile payments has upgraded my 1.3 26.6 51.9 13.9 6.3
business execution
The use of mobile payments has enabled the 1.3 34.2 50.6 11.4 2.5
business to attain its goals and objectives
My business has adopted the digital payment 1.3 0 5.1 73.4 20.3
solution to conduct financial transactions
Mobile payment solutions provide me with a sense 1.3 3.8 3.8 74.7 16.5
of comfort and safety
Higher levels of trust in mobile baking transactions 2.5 6.3 5.1 72.2 13.9
by customers has led to my adoption of mobile
payments
My faith in mobile payment systems is affected by 15.2 51.9 27.8 3.8 1.3
security issues
Perceived security risk has influenced my intention 1.3 0 5.1 67.1 26.6
to adopt mobile payment solutions in the business

4.3.2 Descriptives for Mobile Payments Mobility and Performance

The participants were asked to evaluate how much they agreed with various statements on
mobile payments mobility and performance using the scale of 1 to 5, where 1=Strongly
disagree; 2=Disagree; 3=Neutral; 4=Agree; 5= Strongly agree. The ratings were analyzed
using descriptive statistics in the form of means and standard deviation. Table 4.1
designates that majority of the respondents were in agreement that mobile payments were
used in the businesses because they were easy to use (mean=4.25, standard
deviation=0.518).
35
Table 4.2: Descriptives for Mobile Payments Mobility and Performance
N Mean Std Dev
Most of my business transactions are done through mobile 79 4.10 .856
payment solutions
Mobile payments are used in my business because they are 79 4.25 .518
easy to use
My adoption of mobile payments was influenced by 79 4.18 .636
increased of demand of mobile mod of payments
The use of mobile payments has upgraded my business 79 2.97 .847
execution
The use of mobile payments has enabled the business to 79 2.80 .758
attain its goals and objectives
My business has adopted the digital payment solution to 79 4.11 .599
conduct financial transactions
Mobile payment solutions provide me with a sense of 79 4.01 .689
comfort and safety
Higher levels of trust in mobile baking transactions by 79 3.89 .816
customers has led to my adoption of mobile payments
My faith in mobile payment systems is affected by security 79 2.24 .804
issues
Perceived security risk has influenced my intention to adopt 79 4.18 .636
mobile payment solutions in the business

4.3.3 Correlation Analysis for Mobile Payments Mobility and Performance

Table 4.3 shows the correlation relationships between for mobile payments mobility
factors and SMEs’ performance. It indicates that mobile payments mobility was
significant to SMEs’ performance (r=0.416, p<0.05). Perceived ease of use was
insignificant to SMEs’ performance (r=0.210, p>0.05). Perceived usefulness was
significant to SMEs’ performance (r=0.346, p<0.05). Convenience was insignificant to
SMEs’ performance (r=0.204, p>0.05). Perceived trust was significant to SMEs’
performance (r=0.226, p<0.05). Perceived security risk was insignificant to SMEs’
performance (r=0.111, p>0.05).

36
Table 4.3: Correlation Analysis for Mobile Payments Mobility and Performance
SMEs, Mobility PEOU PU Convenient PT PSR
Performance
SMEs, 1
Performance
Mobility .416** 1
.000
PEOU .210 .575** 1
.063 .000
PU .346** .689** .784** 1
.002 .000 .000
Convenient .204 .643** .624** .557** 1
.071 .000 .000 .000
PT .226* .447** .408** .343** .467** 1
.046 .000 .000 .002 .000
PSR .111 -.061 -.057 -.051 -.017 -.048 1
.331 .596 .619 .656 .883 .672
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)

4.3.4 Regression Analysis for Mobile Payments Mobility and Performance

The section that follows presents a regression analysis for mobile payments mobility and
SMEs’ performance. The model summary, analysis of variance (ANOVA), and linear
regression coefficient have been used to demonstrate the manner in which the
independent variable (mobile payments mobility) influences the dependent variable
(SMEs’ performance), and how the relationship changes when one of the variables
changes.

4.3.4.1 Model Summary for Mobile Payments Mobility and Performance

Table 4.4 depicts the existing relationship between mobile payments mobility and SMEs’
performance, and the R square value of 0.173 indicates that mobile payments mobility
influenced SMEs’ performance by about 17% (R² = .173).

37
Table 4.4: Model Summary for Mobile Payments Mobility and Performance
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .416ª .173 .163 .31374
a. Predictors: (Constant), Mobile Payments Mobility

4.3.4.2 ANOVA for Mobile Payments Mobility and Performance

The ANOVA for mobile payments mobility and SMEs’ performance is shown in Table
4.5. The linear regression of the F statistics indicates that there existed a statistically
significant linear relationship between mobile payments mobility and SMEs’ performance
(F (1,78) = 16.158, p<.05).

Table 4.5: ANOVA for Mobile Payments Mobility and Performance

Model Sum of Squares df Mean Square F Sig.
1 Regression 1.590 1 1.590 16.158 .000b
Residual 7.579 77 .098
Total 9.170 78
a. Predictors: (Constant), Mobile Payments Mobility
b. Dependent Variable: SMEs’ Performance

4.3.4.3 Coefficients for Mobile Payments Mobility and Performance

Table 4.6 shows the regression coefficient that demonstrates the existing relationship
between mobile payments mobility and SMEs’ performance. The table denotes that
mobile payments mobility could statistically and significantly influence SMEs;
performance (β = 0.254, t (78) = 4.020, p = 0.05).

Table 4.6: Coefficients for Mobile Payments Mobility and Performance

Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
1 (Constant) 2.722 .221 12.294 .000
Mobility .254 .063 .416 4.020 .000
a. Dependent Variable: SMEs’ Performance

38
4.4 Mobile Payments Costs and Performance
The secondary objective of the study was to determine the effectiveness of mobile
payments costs on performance of small and medium enterprises. This section provides
the frequencies, descriptive, correlation, and regression analyses for the same.

4.4.1 Frequencies for Mobile Payments Costs and Performance

Table 4.7 shows that as businessmen, the cost involved in mobile money transfer was not
satisfactory and had not led to their adoption as shown by 94.9% of the respondents who
disagreed, while 2.6% agreed, and 2.5% were neutral. The businesses adopted mobile
banking because mobile handsets were simple to operate and had the functionalities
required to adopt mobile money payments as agreed to by 88.6% of the respondents,
while 6.3% were neutral, and 5.1% disagreed. Mobile payment platforms have provided
the business with ease of use, comfort, and capacity to cut costs as agreed to by 91.2% of
the respondents, while 5.1% disagreed, and 3.8% were neutral. Accessibility of mobile
money transactions had not broadened the businesses’ client base as shown by 67.1% of
the respondents who disagreed, while 30.4% were neutral, and 2.5% agreed. Mobile cash
transactions had not enhanced the overall businesses’ performance as shown by 63.3% of
the respondents who disagreed, while 30.4% were neutral, and 6.3% agreed.

Transaction cost did not heavily influence the adoption of mobile payment platforms in
the businesses as shown by 84.8% of the respondents who disagreed, while 11.4% were
neutral, and 3.8% agreed. Mobile payments have not empowered the businesses to offer
merchandise and services remotely as shown by 49.3% of the respondents who disagreed,
while 26.6% were neutral, and 24.1% agreed. Transaction fee did not heavily influence
the adoption of mobile payment platforms in the businesses as shown by 87.4% of the
respondents who disagreed, while 10.1% were neutral, and 2.5% agreed. The costs
involved in sending cash through mobile payment systems were not generally lower than
those of banks and other platforms as shown by 96.2% of the respondents who disagreed,
while 2.5% were neutral, and 1.3% agreed. Mobile banking platforms have reduced the
need to visit the bank, thus get more time to run the businesses as agreed to by all the
respondents.

39
Table 4.7: Frequencies for Mobile Payments Costs and Performance
SD D N A SA
% % % % %
As a businessman, the cost involved in mobile 27.8 67.1 2.5 1.3 1.3
money transfer is satisfactory and has led to my
adoption
My business adopted mobile banking because 0 5.1 6.3 67.1 21.5
mobile handsets are simple to operate and have the
functionalities required to adopt mobile money
payments
Mobile payment platforms have provided the 1.3 3.8 3.8 68.4 22.8
business with ease of use, comfort, and capacity to
cut costs
Accessibility of mobile money transactions has 13.9 53.2 30.4 2.5 0
broadened the business’ client base
Mobile cash transactions have enhanced the overall 12.7 50.6 30.4 6.3 0
business performance
Transaction cost heavily influenced my adoption of 22.8 62 11.4 3.8 0
mobile payment platforms in the business
Mobile payments have empowered my business to 10.1 39.2 26.6 24.1 0
offer merchandise and services remotely
Transaction fee heavily influenced my adoption of 24.1 63.3 10.1 0 2.5
mobile payment platforms in the business
The costs involved in sending cash through mobile 34.2 62 2.5 1.3 0
payment systems are generally lower than those of
banks and other platforms
Mobile banking platforms have reduced my need to 0 0 0 73.4 26.6
visit the bank, thus get more time to run the
businesses

40
4.4.2 Descriptives for Mobile Payments Costs and Performance
The participants were asked to evaluate how much they agreed with various statements on
mobile payments costs and performance using the scale of 1 to 5, where 1=Strongly
disagree; 2=Disagree; 3=Neutral; 4=Agree; 5= Strongly agree. The ratings were analyzed
using descriptive statistics in the form of means and standard deviation. Table 4.8
designates that majority of the respondents were in agreement that mobile banking
platforms have reduced the need to visit the bank, thus get more time to run the
businesses (mean=4.27, standard deviation=0.445).

Table 4.8: Descriptives for Mobile Payments Costs and Performance

N Mean Std Dev
As a businessman, the cost involved in mobile money 79 1.81 .662
transfer is satisfactory and has led to my adoption
My business adopted mobile banking because mobile 79 4.05 .696
handsets are simple to operate and have the functionalities
required to adopt mobile money payments
Mobile payment platforms have provided the business with 79 4.08 .730
ease of use, comfort, and capacity to cut costs
Accessibility of mobile money transactions has broadened 79 2.22 .710
the business’ client base
Mobile cash transactions have enhanced the overall business 79 2.30 .774
performance
Transaction cost heavily influenced my adoption of mobile 79 1.96 .706
payment platforms in the business
Mobile payments have empowered my business to offer 79 2.65 .961
merchandise and services remotely
Transaction fee heavily influenced my adoption of mobile 79 1.94 .757
payment platforms in the business
The costs involved in sending cash through mobile payment 79 1.71 .581
systems are generally lower than those of banks and other
platforms
Mobile banking platforms have reduced my need to visit the 79 4.27 .445
bank, thus get more time to run the businesses
41
4.4.3 Correlation Analysis for Mobile Payments Costs and Performance
Table 4.9 shows the correlation relationships between for mobile payments cost factors
and SMEs’ performance. It indicates that mobile payments costs were significant to
SMEs’ performance (r=0.238, p<0.05). Transaction costs were significant to SMEs’
performance (r=0.255, p<0.05). Financial costs were insignificant to SMEs’ performance
(r=0.216, p>0.05). Perceived processing fee/costs were insignificant to SMEs’
performance (r=0.193, p>0.05).

Table 4.9: Correlation Analysis for Mobile Payments Costs and Performance
SMEs, Costs Transaction Financial Processing
Performance Costs Costs Fee/Costs
SMEs, 1
Performance
Costs .238* 1
.035
Transaction .255* -.055 1
Costs .023 .633
Financial Costs .216 -.075 .705** 1
.055 .513 .000
Processing .193 -.114 .445** .365** 1
Fee/Costs .089 .318 .000 .001
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)

4.4.4 Regression Analysis for Mobile Payments Costs and Performance

The section that follows presents a regression analysis for mobile payments costs and
SMEs’ performance. The model summary, ANOVA, and linear regression coefficient
have been used to demonstrate the manner in which the independent variable (mobile
payments costs) influences the dependent variable (SMEs’ performance), and how the
relationship changes when one of the variables changes.

42
4.4.4.1 Model Summary for Mobile Payments Costs and Performance
Table 4.10 depicts the existing relationship between mobile payments costs and SMEs’
performance, and the R square value of 0.057 indicates that mobile payments costs
influenced SMEs’ performance by about 6% (R² = .057).

Table 4.10: Model Summary for Mobile Payments Costs and Performance
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .238ª .057 .044 .33518
a. Predictors: (Constant), Mobile Payments Costs

4.4.4.2 ANOVA for Mobile Payments Costs and Performance

The ANOVA for mobile payments costs and SMEs’ performance is shown in Table 4.11.
The linear regression of the F statistics indicates that there existed a statistically
significant linear relationship between mobile payments costs and SMEs’ performance (F
(1,78) = 4.621, p<.05).

Table 4.11: ANOVA for Mobile Payments Costs and Performance

Model Sum of Squares df Mean Square F Sig.
1 Regression .519 1 .519 4.621 .035b
Residual 8.651 77 .112
Total 9.170 78
a. Predictors: (Constant), Mobile Payments Costs
b. Dependent Variable: SMEs’ Performance

4.4.4.3 Coefficients for Mobile Payments Costs and Performance

Table 4.12 shows the regression coefficient that demonstrates the existing relationship
between mobile payments costs and SMEs’ performance. The table denotes that mobile
payments costs could statistically and significantly influence SMEs; performance (β =
0.153, t (78) = 2.150, p = 0.05).

43
Table 4.12: Coefficients for Mobile Payments Costs and Performance
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
1 (Constant) 2.966 .298 9.947 .000
Costs .153 .071 .238 2.150 .035
a. Dependent Variable: SMEs’ Performance

4.5 Mobile Payments Credit Accessibility and Performance

The last objective of the study was to determine the effectiveness of mobile payments
credit accessibility costs on performance of small and medium enterprises. This section
provides the frequencies, descriptive, correlation, and regression analyses for the same.

4.5.1 Frequencies for Mobile Payments Credit Accessibility and Performance

Table 4.13 shows that mobile payments had facilitated the businesses’ ability to access
long-term credit as agreed to by 93.6% of the respondents, while 5.1% were neutral, and
1.3% disagreed. Mobile payments platforms had provided the businesses with
accessibility to unsecured mobile credits (loan options) as agreed to by 96.2% of the
respondents, while 2.5% disagreed, and 1.3% were neutral. Mobile payments platforms
had enabled the businesses to utilize branchless banking services as agreed to by 81% of
the respondents, while 16.5% were neutral, and 2.5% disagreed. Capital collection from
mobile credit platforms had not provided room for businesses growth since the majority
of the respondents 49.4% were neutral, while 40.5% disagreed, and 10.1% agreed.
Availability of credit from mobile payment platforms had minimized the businesses
dependence on bank credits as agreed to by 94.9% of the respondents, while 5.1% were
neutral.

Through mobile payment platforms the businesses savings had not increased as disagreed
to by 51.9% of the respondents, while 32.9% were neutral, and 15.2% agreed. Mobile
payment platforms had eliminated the need for collateral to enable the businesses to
access loans (credit) as agreed to by 94.9% of the respondents, while 3.8% were neutral,
and 1.3% disagreed. Mobile finance had not enabled the businesses to save cash on
mobile bank accounts and get credit as disagreed to by 51.9% of the respondents, while
44
32.9% were neutral, and 15.2% disagreed. Mobile payment platforms had not greatly
enhanced the businesses’ financial development as disagreed to by 54.4% of the
respondents, while 34.2% were neutral, and 11.4% agreed. Mobile payment platforms had
enabled the businesses to access credit from banks and other microfinance institutions as
agreed to by 89.9% of the respondents, while 7.6% disagreed, and 2.5% were neutral.

Table 4.13: Frequencies for Mobile Payments Credit Accessibility & Performance
SD D N A SA
% % % % %
Mobile payments have facilitated the business’ 1.3 0 5.1 62 31.6
ability to access long-term credit
Mobile payments platforms have provided the 0 2.5 1.3 55.7 40.5
business with accessibility to unsecured mobile
credits (loan options)
Mobile payments platforms have enabled the 0 2.5 16.5 65.8 15.2
business to utilize branchless banking services
Capital collection from mobile credit platforms has 7.6 32.9 49.4 7.6 2.5
provided room for businesses growth
Availability of credit from mobile payment 0 0 5.1 67.1 27.8
platforms has minimized the business dependence
on bank credits
Through mobile payment platforms business 10.1 41.8 32.9 13.9 1.3
savings has increased
Mobile payment platforms have eliminated the need 1.3 0 3.8 58.2 36.7
for collateral to enable the business to access loans
(credit)
Mobile finance has enabled the business to save 11.4 40.5 32.9 12.7 2.5
cash on mobile bank accounts and get credit
Mobile payment platforms have greatly enhanced 11.4 43 34.2 11.4 0
the business’ financial development
Mobile payment platforms have enabled the 6.3 1.3 2.5 57 32.9
business to access credit from banks and other
microfinance institutions

45
4.5.2 Descriptives for Mobile Payments Credit Accessibility and Performance
The participants were asked to evaluate how much they agreed with various statements on
mobile payments credit accessibility and performance using the scale of 1 to 5, where
1=Strongly disagree; 2=Disagree; 3=Neutral; 4=Agree; 5= Strongly agree. The ratings
were analyzed using descriptive statistics in the form of means and standard deviation.
Table 4.14 designates that majority of the respondents were in agreement that mobile
payments platforms had provided the businesses with accessibility to unsecured mobile
credits (loan options) (mean=4.34, standard deviation=0.638).

Table 4.14: Descriptives for Mobile Payments Credit Accessibility & Performance
N Mean Std Dev
Mobile payments have facilitated the business’ ability to 79 4.23 .659
access long-term credit
Mobile payments platforms have provided the business with 79 4.34 .638
accessibility to unsecured mobile credits (loan options)
Mobile payments platforms have enabled the business to 79 3.94 .647
utilize branchless banking services
Capital collection from mobile credit platforms has provided 79 2.65 .833
room for businesses growth
Availability of credit from mobile payment platforms has 79 4.23 .530
minimized the business dependence on bank credits
Through mobile payment platforms business savings has 79 2.54 .903
increased
Mobile payment platforms have eliminated the need for 79 4.29 .663
collateral to enable the business to access loans (credit)
Mobile finance has enabled the business to save cash on 79 2.54 .945
mobile bank accounts and get credit
Mobile payment platforms have greatly enhanced the 79 2.46 .844
business’ financial development
Mobile payment platforms have enabled the business to 79 4.09 .990
access credit from banks and other microfinance institutions

46
4.5.3 Correlation Analysis for Mobile Payments Credit Accessibility and
Performance
Table 4.15 shows the correlation relationships between for mobile payments credit
accessibility factors and SMEs’ performance. It indicates that mobile payments credit
accessibility was significant to SMEs’ performance (r=0.797, p<0.05). Unsecured loans
were significant to SMEs’ performance (r=0.614, p<0.05). Credit accessibility was
significant to SMEs’ performance (r=0.461, p<0.05). Mobile finance was significant to
SMEs’ performance (r=0.692, p<0.05).

Table 4.15: Correlation Analysis for Mobile Payments Credit Accessibility and
Performance
SMEs, Credit Unsecured Credit Mobile
Performance Accessibility Loans Accessibility Finance
SMEs, 1
Performance
Credit .797** 1
Accessibility .000
Unsecured .614** .489** 1
Loans .000 .000
Credit .461** .443** .154 1
Accessibility .000 .000 .174
Mobile .692** .669** .473** .590** 1
Finance .000 .000 .000 .000
** Correlation is significant at the 0.01 level (2-tailed)

4.5.4 Regression Analysis for Mobile Payments Credit Accessibility and

Performance
The section that follows presents a regression analysis for mobile payments credit
accessibility and SMEs’ performance. The model summary, ANOVA, and linear
regression coefficient have been used to demonstrate the manner in which the
independent variable (mobile payments credit accessibility) influences the dependent
variable (SMEs’ performance), and how the relationship changes when one of the
variables changes.

47
4.5.4.1 Model Summary for Mobile Payments Credit Accessibility and Performance
Table 4.16 depicts the existing relationship between mobile payments credit accessibility
and SMEs’ performance, and the R square value of 0.634 indicates that mobile payments
credit accessibility influenced SMEs’ performance by about 63% (R² = .634).

Table 4.16: Model Summary for Mobile Payments Credit Accessibility and
Performance
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .797ª .634 .630 .20865
a. Predictors: (Constant), Mobile Payments Credit Accessibility

4.5.4.2 ANOVA for Mobile Payments Credit Accessibility and Performance

The ANOVA for mobile payments credit accessibility and SMEs’ performance is shown
in Table 4.17. The linear regression of the F statistics indicates that there existed a
statistically significant linear relationship between mobile payments credit accessibility
and SMEs’ performance (F (1,78) = 133.639, p<.05).

Table 4.17: ANOVA for Mobile Payments Credit Accessibility and Performance
Model Sum of Squares df Mean Square F Sig.
1 Regression 5.818 1 5.818 133.639 .000b
Residual 3.352 77 .044
Total 9.170 78
a. Predictors: (Constant), Mobile Payments Credit Accessibility
b. Dependent Variable: SMEs’ Performance

4.5.4.3 Coefficients for Mobile Payments Credit Accessibility and Performance

Table 4.18 shows the regression coefficient that demonstrates the existing relationship
between mobile payments credit accessibility and SMEs’ performance. The table denotes
that mobile payments credit accessibility could statistically and significantly influence
SMEs; performance (β = 0.427, t (78) = 11.560, p = 0.05).

48
Table 4.18: Coefficients for Mobile Payments Credit Accessibility and Performance
Unstandardized Standardized
Model Coefficients Coefficients t Sig.
B Std. Error Beta
1 (Constant) 2.204 .123 17.897 .000
Credit Accessibility .427 .037 .797 11.560 .000
a. Dependent Variable: SMEs’ Performance

4.6 Chapter Summary

The study results and findings obtained from the analyzed data have been presented in
this chapter. The chronology of the chapter came from the questionnaire structure. The
chapter has offered results for the response rate, demographic information, as well as
results for the influence of mobile payments mobility, mobile payments cost, and mobile
payments credit accessibility on SMEs’ performance. The next chapter is the discussion,
conclusion, and recommendations of the study.

49
 CHAPTER FIVE
5.0 DISCUSSION, CONCLUSION, AND RECOMMENDATIONS
5.1 Introduction
The objective of the study was to determine the efficacy of mobile payment solutions on
performance of SMEs at Kamukunji trading center. This chapter brings the research to a
close by focusing on the study summary, discussion, conclusion, and recommendations.

5.2 Summary
The general objective of the study was to examine the efficacy of mobile payment
solutions on performance of SMEs in Kamukunji trading center. The study was directed
by the following specific objectives; to determine the effectiveness of mobile payments
mobility on performance of small and medium enterprises, to examine the effect of
mobile payments solutions cost reduction on performance of small and medium
enterprises, to establish the influence of mobile payments solutions access to credit on
performance of small and medium enterprises.

Descriptive research design was utilized in this study research. The study population were
all SMEs in Kamukunji trading center who were approximately 1041, thus, the sampling
frame was primarily comprised of the managers and owners of the registered 1041 SMEs
that were operating within Kamukunji trading center, and was drawn from the Nairobi
County Council registrar of business and trading licenses county offices. Stratified
sampling was utilized by the researcher whereby the business categories were used in the
classification of the business, and simple random sampling was applied to select the
sample size respondents. The sample size of 91 respondents was obtained using the
Yamane formula. Primary data was used in this study, and it was obtained using a self-
administered questionnaire that was piloted before administration. After data had been
collected, the SPSS version 20 tool was used to analyze the data descriptively and
inferentially. The data was presented using tables and figures.

The study revealed that mobile payments were used in the businesses because they were
easy to use, and that mobile payments mobility was significant to SMEs’ performance.
Regression analysis showed that mobile payments mobility influenced SMEs’
performance by about 17% (R² = .173), and that there existed a statistically significant

50
linear relationship between mobile payments mobility and SMEs’ performance. It is noted
that mobile payments mobility could statistically and significantly influence SMEs’
performance.

The study showed that mobile banking platforms have reduced the need to visit the bank,
thus get more time to run the businesses, and that mobile payments costs were significant
to SMEs’ performance (r=0.238, p<0.05). Regression analysis revealed that mobile
payments costs influenced SMEs’ performance by about 6% (R² = .057). The ANOVA
for indicated that there existed a statistically significant linear relationship between
mobile payments costs and SMEs’ performance, and that mobile payments costs could
statistically and significantly influence SMEs; performance.

The study indicates that mobile payments platforms had provided the businesses with
accessibility to unsecured mobile credits (loan options). Correlation analysis indicated
that mobile payments credit accessibility was significant to SMEs’ performance, and that
mobile payments credit accessibility influenced SMEs’ performance by about 63% (R² =
.634). The ANOVA showed that there existed a statistically significant linear relationship
between mobile payments credit accessibility and SMEs’ performance, and that mobile
payments credit accessibility could statistically and significantly influence SMEs;
performance.

5.3 Discussion
5.3.1 Mobile Payments Mobility and Performance
Most of the business transactions were done through mobile payment solutions.
According to Kim et al. (2016), mobile mobility refers to the ability of accessing mobile
phone services as well as performing transaction using a mobile network through a
variety of mobile devices. Hamza and Shah (2018) define mobility as the availability of
making use of the mobile phone to transactions through mobile payment solutions.

Mobile payments were used in the business because they were easy to use. This study
results conform to those of Pagani (2015) who affirms that many micro-business
operators recognize that mobile payment is easy to use and does not need any formal
training to begin to use the services. Chachage et al., (2017) also found that effort is

51
comparative to perceive ease of use emphatically, affected the behavioral intention use of
m-payment services among college students.

The adoption of mobile payments was influenced by increased of demand of mobile

mode of payments. The result agrees with Hamza and Shah (2018) revealed that the
mobile payment digital platforms' utilization is profoundly influenced by the availability
of the mobile devices that incorporate, localization, personalization, convenience,
ubiquity, and the stability of the network. Perceived usefulness is the foremost critical
determinant to anticipate consumers' intention to adopt mobile payment solutions in
Malaysia and demonstrated that perceived usefulness played a crucial part in influencing
the behavioral purpose of implementing new technological innovation.

The use of mobile payments has not upgraded the businesses’ execution. This study result
differs with the findings of Davis (2015) who suggests that perceived usefulness is the
degree to which an individual accepts that using a particular system would upgrade their
work execution. According to Sayid et al., (2015), clients are willing to acknowledge that
technological innovations have certain benefits than the current payment model. One of
the determinants for the moderate dissemination of mobile payment solutions might be
the disappointment in introducing a clear advantage of utilizing digital mobile payment
solutions to potential clients.

The use of mobile payments has not enabled the businesses to attain their goals and
objectives. According to Chitungo and Munongo (2016) the perceived usefulness is
characterized as the degree to which an individual acknowledges that the utilization of
digital payment solutions will progress his or her performance in everyday exercises in
their study. This refers to how mobile payment solutions can help customers attain their
task-related objectives, such as effectiveness.

The businesses had adopted the digital payment solution to conduct financial transactions.
The study result is in tandem with those of Clarke (2015) who claims that convenience is
related to the components generating time and place for shoppers and highlights mobile
payment solutions, and that many SMEs adopted the digital payment solution to conduct

52
financial transactions Wamuyu et al., (2016), detailed a considerable positive impact on
SMEs’ financial performance and digital mobile payment solutions.

Mobile payment solutions provide SME owners with a sense of comfort and safety. This
result agrees with Omwansa (2016) who clarifies that M-Pesa gives both comfort and
security in a nation where many individuals have no bank accounts. Individuals walk
around with their virtual cash, knowing they can pull back money any time at a nominal
charge. He further states that misplaced or stolen mobile phones do in any way lead to the
loss of many that are deposit on M-Pesa account in that the level of security is high; it
requires a PIN.

Higher levels of trust in mobile baking transactions by customers has led to the
businesses’ adoption of mobile payments. This study result is in agreement with Masinge
(2016) who states that the higher levels of trust in providing a service will lead to more
intention to conduct mobile baking transactions. Dass (2016) states that trust is
profoundly conducive to such cognitive strengths as desires, states of mind, eagerness,
and perceived probability. Earlier studies by Saprikis et al., (2016) revealed that
customers' trust has positively impacted perceived usefulness and ease of use.

The businesses’ faith in mobile payment systems is not affected by security issues. The
results of the study differ with the observations of Bångens and Söderberg (2017) who
note that faith in any form of digital payment system is affected by security, the amount
of control that the clients have, reliability, and the network's stability. However, Kabanda
and Brown (2015) observed that, once trust is built up through quality service provision,
clients are more likely to have more major faith in the perceived usefulness and ease of
use of mobile payment solutions and hence embracing the services.

Perceived security risk had influenced the owners/managers intention to adopt mobile
payment solutions in the business. The results are in tandem with Lee (2015) who states
that the critical benefit of mobile payment solutions is the security. A study by Tossy
(2018) indicated that that perceived security risk impacted emphatically the intention to
adopt mobile payment solutions in Tanzania. Similarly, Kihoma (2016) revealed that

53
digital mobile payment solutions are more secure, simple to handle, and accessible at any
time among women engaged in agribusiness in Tanzania.

5.3.2 Mobile Payments Costs and Performance

The cost involved in mobile money transfer was not satisfactory and had not led to their
adoption. The study result differs with the observation made by Micheni et al., (2017)
who allude that in case buyers see that the cost involved in mobile money is satisfactory,
they will adopt it more effectively and, after that, utilize it. Tobbin and Kuwornu (2015)
opine that besides the cost involved in adopting mobile money usually tends to prevent
individuals from receiving mobile money services if the charges involved are quite high.
Still, it can be an inspiration to a quicker adoption.

The businesses adopted mobile banking because mobile handsets were simple to operate
and had the functionalities required to adopt mobile money payments. According to
Mallat (2017) numerous distinctive mobile handsets are simple to operate and have the
functionalities required to adopt mobile money payments. Omwansa (2016) states that
mobile money transaction costs, usually through the mobile, many transfer technologies
are lower than those of banks and cash exchange companies. The payment cost
transactions affect the consumers directly regarding the adoption of mobile money due to
the costs cost involved.

Mobile payment platforms have provided the business with ease of use, comfort, and
capacity to cut costs. The results agree with Koloseni and Mandari (2017) who agreed
that the behavioral choice hypothesis, the cost-benefit design is critical to both perceived
value and ease of use. Hidayanto et al., (2015) allude that the perceived ease of use is the
degree to which an individual accepts that utilizing the framework would be free of
mental and physical exertion. Lule (2015) concurs that cost-benefit design is critical to
perceived usefulness and ease of use.

Accessibility of mobile money transactions had not broadened the businesses’ client base.
This study result differs with Simiyu and Oloko (2015) who contend that the accessibility
of mobile money transactions broadens SMEs' client base, given the reality that the lion's
share of the country's people presently has access to a mobile phone. Kigen (2017) did a

54
study on the effect of mobile banking on the cost of transaction account of microfinance
institutions and found that at that point, mobile banking had decreased the transaction
costs impressively. However, they were not specifically felt by the banks since, at that
point, there was a small mobile banking client base.

Mobile cash transactions had not enhanced the overall businesses’ performance. This
result also differs with Nyaga and Okonga (2017) contend that mobile cash transactions
ordinarily enhance the overall performance of SMEs. Govil et al., (2017) carried a study
on mobile finance's role and revealed that M-banking greatly enhances businesses'
financial development.

Transaction cost did not heavily influence the adoption of mobile payment platforms in
the businesses. These results differ with those of Omwansa (2016) who states that the
payment cost transactions affect the consumers directly regarding the adoption of mobile
money due to the costs cost involved. It’s also in line with Omwansa et al., (2015), who
found that transaction cost greatly influenced the adoption of mobile banking, and Simiyu
and Oloko (2015) who also note that the transaction cost at a low level contributes greatly
to the high adoption of the mobile many transfer platforms since the cost will be below
what banks charges.

Mobile payments have not empowered the businesses to offer merchandise and services
remotely. This study outcome varies with that of Gencer (2015) who contends that mobile
payments empower SMEs to save costs, which primarily affect their profitability. Mobile
payment platforms empower businesses to offer merchandise and services remotely, as
well as those of Onyango et al., (2017) who allude that mobile money makes strides in
improving marketing productivity, encourages coordination, and decreases risk exposure
since there is no cash involved.

Transaction fee did not heavily influence the adoption of mobile payment platforms in the
businesses. This study result diverges from that of Kim et al., (2016) who state that a
perceived fee is characterized by the money related costs of employing a mobile
framework, and that new customers usually compare the costs with other digital payment
platforms before adopting the new systems.

55
The costs involved in sending cash through mobile payment systems were not generally
lower than those of banks and other platforms. This study result differs with the
observation made by Omwansa (2016) that the costs involved in sending cash through the
mobile payment systems are usually lower than those of banks and other companies that
offer the same digital payment transfers. Kirui and Onyuma (2015) also contend that
basically, businesses pay the costs of traveling using cash.

Mobile banking platforms have reduced the need to visit the bank, thus get more time to
run the businesses. The result is in tandem with Otiso et al., (2016) who decreases the
recurrence of attending to the bank, i.e., it spares time; consequently, people get more
time to run their businesses. In expansion, exchange expenses are lower than those
charged by most banks, and it's simpler to utilize it when paying for clients and clients,
leading to an increase in sales revenues.

5.3.3 Mobile Payments Credit Accessibility and Performance

Mobile payments had facilitated the businesses’ ability to access long-term credit.
According to Nair (2015), SMEs' accessing long-term credit empowers them to depend
on high-cost term financial returns. Omwansa (2016) states that these troubles stem from
the more formal loaning firms, which rated all SMEs endeavors similarly as un-credit
worthy.

Mobile payments platforms had provided the businesses with accessibility to unsecured
mobile credits (loan options). Soderberg (2017) states that unsecured mobile credits boost
millions of MSMEs over east Africa. According to Hajri (2017), mobile loan services
help micro-enterprises pay for their protection premiums, amass resources, and get credit.
Wanyonyi and Bwisa (2016) also note that MSE credit collections are critical, and with
the help of versatile cash, they can speed their collection and make buys and supplies.

Mobile payments platforms had enabled the businesses to utilize branchless banking
services. This result is in tandem with Pagani (2015) who explains that mobile payment
services are ordinarily viewed as a variation of banking, which is branchless with the
potential to convey financial services using the new system compared to the current
model of banking. Versatile cash administrations can be seen as a variety of branchless

56
keeping money with the potential for the conveyance of monetary administrations
exterior customary keeping money.

Capital collection from mobile credit platforms had not provided room for businesses
growth. The results agree with Omwansa (2016) who affirms that SMEs can procure
advances on investment funds and spread their credit reimbursements over time. It ought
to be noted that savings could be a frame of the capital collection, which over time
permits SMEs to grow their business potential and capacity. Overviews exhausted fewer
urban ranges of Ghana on commerce related calls and costs related to such calls.

Availability of credit from mobile payment platforms had minimized the businesses
dependence on bank credits. The results are supported by Ludewig (2015) who suggests
that since mobile cash permits the customers to deposit cash in their mobile account and
store it for performing transactions and transfers exchanges make it conceivable to
construct different monetary administrations inside the portable phone innovation, thus
SMEs without access to bank accounts are constrained to depending on the informal cash
economy like borrowing and family investment funds, making them more vulnerable to
dangers to save or borrow cash proficiently.

Through mobile payment platforms the businesses savings had not increased. These
results differ from those of Litondo and Ntale (2016) and Jagun et al., (2008) who found
that mobile cash significantly helps SMEs in saving a lot of time taken when performing
transactions and payment of goods. It also varies from those of Raddi (2016) who
substantially had several valuable benefits to smaller-scale businesses, which incorporate
access to advances as well as depositing and saving to their banks through the use of
mobile money platforms.

Mobile payment platforms had eliminated the need for collateral to enable the businesses
to access loans (credit). Nyaga (2015) alludes that the availability of funds is usually
considered a fundamental determinant to any business enterprise's success. One challenge
postured by SMEs is the need for securities to act as collateral to enable the SMEs to
access loans, particularly from the financial institution's Bank charges that are

57
impressively higher are among the components that have contributed to low enrolment
rates among SMEs.

Mobile finance had not enabled the businesses to save cash on mobile bank accounts and
get credit. The result differs from that of the World Bank (2015) that, mobile finance
helps SMEs save cash on mobile bank accounts and get credit, empowering them to
purchase products and offer services to their clients. The change in benefit delivery
upgrades their trade exchanges. The SMEs' failure to access credit is still a major issue
that limits the mode of information of venturing businesses and prevents others from
extending and developing.

Mobile payment platforms had not greatly enhanced the businesses’ financial
development. The result varies from those of Govil et al., (2017) who carried a study on
mobile finance's role and revealed that M-banking greatly enhances businesses' financial
development. Concurring to the research, mobile banking speeds up the stream of
products and services as a result of creating a conducive climate for speculation and over
all security.

Mobile payment platforms had enabled the businesses to access credit from banks and
other microfinance institutions. According to Porteous (2015), modern commerce implies
have risen, such as microfinance and smaller-scale protections utilizing versatile cash to
pay their clients when making payment and advance reimbursements. Kigen (2017) did a
study on the effect of mobile banking on the cost of transaction account of microfinance
institutions and found that at that point, mobile banking had decreased the transaction
costs impressively.

5.4 Conclusion
5.4.1 Mobile Payments Mobility and Performance
The study concludes that most of the SMEs’ business transactions were done through
mobile payment solutions because they were easy to use. The adoption of mobile
payments was influenced by increased of demand of mobile mode of payments, but it had
not upgraded the businesses’ execution. The use of mobile payments had not enabled the
businesses to attain their goals and objectives, but rather had been adopted for the purpose

58
of financial transactions. Mobile payment solutions provided the entrepreneurs with a
sense of comfort and safety, and the higher levels of trust in mobile baking transactions
by customers has led to the businesses’ adoption of the same. The businesses’ faith in
mobile payment systems was not affected by security issues because perceived security
risk had influenced the owners/managers intention to adopt mobile payment solutions in
their businesses.

5.4.2 Mobile Payments Costs and Performance

The study concludes that cost involved in mobile money transfer was not satisfactory and
had not led to its adoption, but rather adoption was as a result of mobile handsets being
simple to operate and had the functionalities required to adopt mobile money payments.
Mobile payment platforms had provided the businesses with ease of use, comfort, and
capacity to cut costs, but its accessibility had not broadened the businesses’ client base,
and neither had mobile cash transactions enhance the overall businesses’ performance.
Transaction cost did not heavily influence the adoption of mobile payment platforms in
the businesses, and neither had they empowered the businesses to offer merchandise and
services remotely, nor heavily influence the adoption of mobile payment platforms within
the businesses. The costs involved in sending cash through mobile payment systems were
not generally lower than those of banks and other platforms, but the platforms had
reduced the need to visit the bank, thus get more time to run the businesses.

5.4.3 Mobile Payments Credit Accessibility and Performance

The study concludes that mobile payments had facilitated the businesses’ ability to access
long-term credit, and had provided the businesses with accessibility to unsecured mobile
credits (loan options) and usage of branchless banking services. Capital collection from
mobile credit platforms had not provided room for businesses growth, although
availability of credit from these platforms had minimized the businesses’ dependence on
bank credits. Through mobile payment platforms the businesses savings had not
increased, however, these platforms had eliminated the need for collateral to enable the
businesses to access loans (credit). Mobile finance had not enabled the businesses to save
cash on mobile bank accounts and get credit, and neither had they enhanced the
businesses’ financial development. Mobile payment platforms had enabled the businesses
to access credit from banks and other microfinance institutions.

59
5.5 Recommendations
5.5.1 Recommendations for Improvement
5.5.1.1 Mobile Payments Mobility and Performance
This study recommends SME owners and managers to take advantage of mobile
payments mobility to facilitate their achievement of their business goals and objectives.
They may achieve this by improving their marketing productivity by targeting customers
outside their parameter via online platforms.

5.5.1.2 Mobile Payments Costs and Performance

This study recommends SME owners and managers to take advantage of mobile
payments costs within their business by increasing their profitability. These SMEs can
offer merchandise and services remotely and a reduced cost using available digital
payment solutions, and platforms, and could still access other markets.

5.5.1.3 Mobile Payments Credit Accessibility and Performance

This study recommends SME owners and managers to take advantage of mobile
payments credits to access unsecured loans that they may use to expand their businesses.
This will empower them to purchase products and offer services to their clients
effectively and efficiently.

5.5.2 Recommendations for Further Research

This study focused on assessing the efficacy of mobile payment solutions on performance
of SMEs at Kamukunji trading center. The results and recommendations provided are
thus limited to the SMEs within the research area. The study therefore recommends that a
similar study be conducted on other SMEs within the nation for a comprehensive outlook,
as well as other industries.

60
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 APPENDICES
APPENDIX I: INTRODUCTION LETTER

Elly Winnie Hope

P. O Box 14634 - 00800

Nairobi.

22nd February 2021

Dear Sir/Madam

REF: EFFICACY OF MOBILE PAYMENT SOLUTIONS ON PERFORMANCE

OF SMALL AND MEDIUM ENTERPRISES IN KAMUKUNJI TRADING
CENTER

I am a student at the United States International University, Africa, pursuing a Master of

Business Administration (MBA) Degree in Finance in partial fulfillment of the
requirements for the award of the degree. I am currently undertaking a research project on
efficacy of mobile payment solutions on performance of small and medium enterprises in
Kamukunji trading center.

The attached questionnaire is aimed at eliciting information that will be useful in the
above-mentioned research area as part of the MBA degree requirements. Please note that
the information supplied will be used strictly for academic purposes only, and will be
treated with the utmost confidentiality.

Your cooperation will be highly appreciated.

Yours Sincerely,

Elly Winnie Hope

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 APPENDIX II: QUESTIONNAIRE

This questionnaire is aimed at examining the efficacy of mobile payment solutions on

performance of SMEs in Kamukunji trading center. Please fill the necessary fields
appropriately. Note that, the research is for academic purposes only, and the information
provided will be used for such.

Section A: Demographic Information

1. What is your gender?
Male ( )
Female ( )
2. What is your age bracket?
20 Years and Below ( )
21-30 Years ()
31-40 Years ()
41-50 Years ()
51 Years and Above ( )
3. What is your highest level of education?
Primary Education ()
Secondary Education ()
College/ Tertiary ()
Undergraduate Degree ()
Other ( ) Specify ________________________
4. How long have you been in business?
5 Years and Below ()
6-10 Years ()
11-15 Years ()
16-20 Years ()
21 Years and Above ( )

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Section B: Mobile Payments Mobility and Performance
5. Please rate the following questions using the scale (SD-strongly disagree, D-
disagree, N-neutral, A-agree and SA- strongly agree).

SD D N A SA
B1 Most of my business transactions are done through
mobile payment solutions
B2 Mobile payments are used in my business because they
are easy to use
B3 My adoption of mobile payments was influenced by
increased of demand of mobile mod of payments
B4 The use of mobile payments has upgraded my business
execution
B5 The use of mobile payments has enabled the business to
attain its goals and objectives
B6 My business has adopted the digital payment solution
to conduct financial transactions
B7 Mobile payment solutions provide me with a sense of
comfort and safety
B8 Higher levels of trust in mobile baking transactions by
customers has led to my adoption of mobile payments
B9 My faith in mobile payment systems is affected by
security issues
B10 Perceived security risk has influenced my intention to
adopt mobile payment solutions in the business

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Section C: Mobile Payments Cost and Performance
6. Please rate the following questions using the scale (SD-strongly disagree, D-
disagree, N-neutral, A-agree and SA- strongly agree).

SD D N A SA
C1 As a businessman, the cost involved in mobile money
transfer is satisfactory and has led to my adoption
C2 My business adopted mobile banking because mobile
handsets are simple to operate and have the
functionalities required to adopt mobile money payments
C3 Mobile payment platforms have provided the business
with ease of use, comfort, and capacity to cut costs
C4 Accessibility of mobile money transactions has
broadened the business’ client base
C5 Mobile cash transactions have enhanced the overall
business performance
C6 Transaction cost heavily influenced my adoption of
mobile payment platforms in the business
C7 Mobile payments have empowered my business to offer
merchandise and services remotely
C8 Transaction fee heavily influenced my adoption of
mobile payment platforms in the business
C9 The costs involved in sending cash through mobile
payment systems are generally lower than those of banks
and other platforms
C10 Mobile banking platforms have reduced my need to visit
the bank, thus get more time to run the businesses

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Section D: Mobile Payments Credit Accessibility and Performance
7. Please rate the following questions using the scale (SD-strongly disagree, D-
disagree, N-neutral, A-agree and SA- strongly agree).

SD D N A SA
D1 Mobile payments have facilitated the business’ ability to
access long-term credit
D2 Mobile payments platforms have provided the business
with accessibility to unsecured mobile credits (loan
options)
D3 Mobile payments platforms have enabled the business to
utilize branchless banking services
D4 Capital collection from mobile credit platforms has
provided room for businesses growth
D5 Availability of credit from mobile payment platforms
has minimized the business dependence on bank credits
D6 Through mobile payment platforms business savings
has increased
D7 Mobile payment platforms have eliminated the need for
collateral to enable the business to access loans (credit)
D8 Mobile finance has enabled the business to save cash on
mobile bank accounts and get credit
D9 Mobile payment platforms have greatly enhanced the
business’ financial development
D10 Mobile payment platforms have enabled the business to
access credit from banks and other microfinance
institutions

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Section E: SMEs’ Performance
8. Please rate the following questions using the scale (SD-strongly disagree, D-
disagree, N-neutral, A-agree and SA- strongly agree).

SD D N A SA
E1 The business has increased its growth in sales
E2 The business has increased its growth in market share
E3 The business has increased its growth in profit
E4 The business has increased its Return on Assets (ROA)
E5 The business has increased its Return on Equity (ROE)
E6 The business has increased its average return on sales
E7 The business has increased its gross revenues
E8 The business has increased its Net Cash Flow (NCF)
E9 The business has increased its Cash Flow to Sales
E10 The business has increased its inventory turnover

THANK YOU, THE END

76
APPENDIX III: IRB RESEARCH APPROVAL

77
APPENDIX IV: NACOSTI PERMIT

78