An exploratory study on the usage of M-payments by small and medium business enterprises in Kenya
Date
2011-09
Authors
Kimathi, Vella G. N
Lukandu, Ismail Ateya
Marwanga (Dr.), Reuben
Kiraka, Ruth
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The aim of this study was to identify the key aspects of the currently available m-Commerce
systems, and, in particular, identify what the drivers were for a successful implementation. The study
was to look at the technology, market & competition, regulatory and network load issues with a view
to explore on the usage of m-payments by small and medium business enterprises in Kenya. This study
has necessarily taken a high-level look at the emerging second hand clothing industry imitumba
businesses) and in the process has identified the difficult issues that will impact the success of new
implementations, such as m-commerce, in the African market(s).
The rapid spread of mobile phones means that the number of mobile users may exceed the
number of banked people in many low income countries. Mobile phones can also offer a
communications channel for initiating and executing on-line financial transactions. This channel may
not only reduce the cost of financial transactions for provider and customer, but also allow new
entrants to the financial sector, and new relationships to be formed for distributing services. These
changes hold the prospect of accelerating access to financial services on the back of the mobile
infrastructure.
This research investigates the extent to which the expansion of mobile telephony is likely to
lead to the expansion of access to appropriate financial services in developing countries, especially
Africa. The objectives of this study are to determine how the current m-payment habits are being
perceived by entrepreneurs in Kenya, to establish whether reaching the small and medium business
entrepreneurs through m-payments will be the ultimate driver towards an entrepreneurship boom in
Kenya and to determine which business model can support m-payments for online transactions.
The researcher of this paper acquired data for analysis in order to, firstly, find out how the
current m-payments habits are being perceived by entrepreneurs in Kenya. Therefore, she conducted a
survey through questionnaires to evaluate feasibility of the Bottom of the Pyramid (BOP) population
doing transactions through m-payments.
The study discovered that small businesses are using money transfer systems for transactions,
and this has lead to the rapid growth of establishments and low cost of operations for small businesses.
It was concluded that the usage of mobile payment systems shall lead to an explosion of small
business set-ups in Kenya and Africa at large.
Description
Submitted in partial fulfillment of the requirements for the Degree of Master of Science in
Information Technology.
Keywords
M-payments, Small and Medium Enterprises, Kenya