FACTORS INFLUENCING USE OF MOBILE BANKING AMONG SMALL AND MEDIUM ENTERPRISES IN NAKURU CENTRAL BUSINESS DISTRIC

Abstract

Micro-business enterprises in the developing world are increasingly deploying the use of mobile payments to enhance the quality of their services and increase growth. The pace of transformation in the micro business sector has speeded up with more micro businesses realizing the potential of using the mobile payments in their service delivery. However, there are only a handful of studies on the application of mobile banking for success and growth of small and medium enterprises. This study sought to investigate the factors influencing the use of mobile banking by Small and Medium Enterprises (SME’s) in Nakuru Central Business District. More specifically, the study sought to achieve the following objectives; to assess the extent which Trust and Security, Cost, convenience (ease of use and usefulness) and ICT Knowledge and Skills influence the use of mobile banking in Nakuru CBD. The study is based on a crosssectional survey conducted through administration of questionnaires. The data was collected from a sample of 206 SME’s in Nakuru CBD, Kenya. Both descriptive statistics (demographic characteristics) and inferential statistics (correlation and regression analysis) were used in analyzing data with the help of Statistical Package for Social Sciences (SPSS) version 16.0 and findings are presented mainly in form of tables. The findings show that trust and security, perceived cost, perceived convenience and ICT knowledge and skills had a positive significance (with all having positive correlation coefficients of 0.439, 0.814, 0.814 and 0.370 respectively) on use of mobile banking. The results show that all the factors can explain 88.0% of variance on use of mobile banking. The study concludes that security was one of the key factors when it came to use of mobile banking, followed by usefulness and trust. It is recommended that further research on how training SME’s on mobile banking would likely lead to understanding and using new technology in their business