Effect of mobile money and firm size on financial sustainability of SMEs: case of grocery retail shops in Nairobi County
Date
2024
Authors
Osore, D. O.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Financial sustainability is a critical aspect of the success of SMEs as an unsustainable SME can face significant challenges such as financial difficulties, decreased competitiveness, and even bankruptcy. Though adoption of mobile money services has been theorized to have the potential to improve the financial sustainability of SMEs, the studies conducted are still inconclusive. Majority of the SMEs also still continue to underperform even after incorporating mobile money services. was Against this background, the study sought to establish the effect of mobile money on financial sustainability of SMEs with a special focus on grocery retail shops in Nairobi County. The specific objectives are to establish the effect of mobile money usage, mobile money attributes and mobile money regulations on financial sustainability of grocery retail shops in Nairobi County. The study also sought out to establish the moderating effect of organizational size on the relationship between mobile money services and financial sustainability of grocery retail shops in Nairobi County. The study employs descriptive research design and the targeted population of the study was 10,450 grocery shops in Nairobi County. The respondents were owners, managers, or their equivalents in these grocery retail shops and a sample of 99 grocery shops was selected through simple random sampling. Data was collected using questionnaires and was analyzed using descriptive and inferential analysis. The study established that mobile money usage, money attributes and mobile money regulations had a positive effect on the financial sustainability of grocery retail shops in Nairobi County. The moderating regression model further revealed that incorporating organization size strengthened the impact on the relationship that exists between mobile money and financial sustainability. Moreover, the study denotes that factors such as convenience, security, and efficiency of mobile money transactions are crucial for enhancing the financial sustainability of these shops.Also, larger grocery retail shops may benefit even more from the implementation of mobile money services in terms of their financial sustainability. The study recommends that the mobile service providers should improve on aspects such as security, reliability, convenience, and transparency in mobile money transactions while policymakers and regulators should establish clear and supportive regulations that facilitate the growth and operation of mobile money services.
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