The effects of mobile money services on the financial performance of small business enterprises

Abstract

Small scale 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 money services for success and growth of small scale enterprises. This study sought to investigate the effects of adoption and use of mobile money services on the financial performance of small scale businesses in Nkozi town. 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 money services in Nkozi town. The study is based on a cross-sectional survey conducted through administration of questionnaires. The data was collected from a sample of 71 enterprises in Nkozi town, Uganda. 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 0.309, 0.120, 0.304 and 0.319 respectively) on use of mobile money services. The results show that all the factors can explain 17.8% of variance on use of mobile banking. The study concludes that convenience was one of the key factors when it came to use of mobile money services, followed by ICT knowledge and skills. 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