Effect of Mobile Banking on Financial Inclusion among Small-Medium Enterprises in Kakamega County, Kenya

Abstract

At the end of 2016, adults to the tune of 25 percent had not attained inclusion in financial matters. The general objective was to determine the effect of mobile banking on financial inclusion among SMEs in Kakamega County, Kenya. This study was founded on the diffusion-innovation theory. The descriptive research design was adopted for a population of 9116, comprising 5108 small businesses and 4008 small-medium businesses in Kakamega County, Kenya. This study sampled 369 SMEs, who formed the respondents for the study. This study used questionnaires, so primary data was obtained. Data analysis was done using descriptive and inferential statistics. The study found a positive correlation coefficient of financial innovation parameter, mobile banking (t= 5.060, p<0.005) on financial inclusion among small-medium enterprises. The study findings have shown that mobile banking is significant; hence, banks should subscribe to small-medium enterprises to enable convenient operations and timely transactions. The study findings have shown that mobile banking is significant; hence, banks should subscribe small-medium enterprises to mobile banking to enable affordable access to funding and easier operational transacting, thereby promoting financial inclusion among small-medium enterprises.