Abstract: The use of mobile banking has been necessitated by the rapid change in technology. The banking industry has adopted new strategies of sustaining their growth due to stiff competition. The timely convenience, simplicity, safety and quickness in operation that have been brought into play by the inception of comprehensive m-banking ideology has enhanced the need for small and medium enterprises in Kenya to shift from their classical or common ways of carrying business to incorporate the mobile transactions in their business. Hence this study sought to establish how mobile banking has affected the financial performance of SMEs. Specifically, the study sought to determine the effect of mobile banking services cost on financial performance of SMES in Kakamega County. The research was conducted as an exploratory research. The target population of study for this research comprised of the SMEs that provide financial services within the Kakamega County. This study used random sampling technique. A sample size of 373 SMEs was used. Semi-structured questionnaires were used for collecting information from SMEs entrepreneurs. Trained research assistants were contracted to collect data from the field using the sample codes. A pilot study was done using twenty five questionnaires. Data capturing was done using Excel software. The data from the completed questionnaires were cleaned, coded and entered into the computer using the statistical package for social sciences (SPSS) for Windows analysis. The findings revealed that SMEs used mobile banking services to send and receive money, check account balance, knowing when deposit or withdrawal has been conducted from their bank account. There was negative relationship between cost of mobile banking services and financial performance of SMEs (R=-0.660**). The study recommended that mobile banking services should be affordable to SMEs through exemption of various taxes imposed by the government so as to improve the growth of SMEs in Kenya. This would enable SMEs to use various mobile banking services such payment of bills, accessing of credit facilities to boost their businesses.
Keywords: Mobile Banking, Financial Performance, SMEs, Cost.
Title: Effect of Mobile Banking on Financial Performance of Small Scale and Medium Enterprises in Kakamega County
Author: Jamgun Jensen Iravonga, Dr. Julius Miroga
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
