Effects Of Mobile Banking On The Efficiency Of Micro And Small Enterprises In Gikomba Market Nairobi County

ABSTRACT

The study sought to investigate the adoption of mobile banking by MSEs in the Gikomba market with the objective of assessing the extent to which the use of mobile banking enhances the efficiency of MSEs in the market. Gikomba market was selected as the study area due to its diversity. The study adopted a descriptive research design in its methodology. The study was guided by the following objectives: to examine the effect of procurement efficiency on the operational efficiency of MSEs at Gikomba market, to investigate the influence of improved service on the operational efficiency of MSEs at Gikomba market, to assess the effect of paperless transactions on the operational efficiency of MSEs at Gikomba market, and to examine the effect of risk management on operational efficiency among MSEs at Gikomba market. The population of interest included all the MSEsin the market.Three theories constituted the theoretical framework of the study including: the theory of Bank – Focused model, The Bank – Led Model and the Non-bank – Led Model. The market was segmented into three zones including; Kariokor,Gikomba-KomboMunyiri Road, and Shauri- MoyoMetal-works and Jua Kali market. The sampling frame of two hundred and eight licensed MSEswas drawn from the Nairobi City Council License register of 2011 from which a thirty percent sample was selected for the study. Questionnaires were used to collect primary data from the respondents. The data was quantitatively and qualitatively analyzed and presented in frequency and percentage tables. The study reveals that most of the MSEs in Gikomba market have adopted mobile banking. The outcome of the study reveals a positive correlation between the operations efficiency of the MSEs and the mobile banking practices they have adopted for the last five years. Procurement efficiency, improved service delivery, paperless transactions, and risk management are the key mobile banking practices that have significantly affected the operations efficiency of the MSEs at Gikomba market as supported by the outcome of the regression analysis indicating a high Coefficient of Multiple Determination. The study makes significant contribution across the area of MSEs adoption of mobile banking.