FINANCIAL INNOVATION AND FINANCIAL INCLUSION AMONG REGISTERED SMALL AND MEDIUM ENTERPRISES IN TRANS-NZOIA COUNTY, KENYA
Abstract
This research assessed the effect of monetary advancement in financial innovations and their impact on financial inclusion in Kenya. In particular, the study targeted to establish; the effect of mobile banking, agency banking, internet banking and electronic card banking on financial inclusion among Registered SMES in Trans-Nzoia County. The theories informing the study included; disruptive innovation theory, Constraint theory of innovation and financial intermediation theory. Descriptive research design was used in this study. The study was conducted in Trans-Nzoia County targeting 2246 registered SMEs. The study’s sampling frame included Light Industries, boutique and saloon shops, electronic and spare shops, hardware shops, bookshops, restaurant and hotels, chemists’ shops, groceries, butcheries, wholesale and retail shops. The study sampled three hundred and forty (340) registered SMEs using stratified random sampling. Primary data was collected using a well-designed semi-structured questionnaire. Pilot study was conducted to establish validity using content validity and reliability using Cronbach Alpha Coefficient. Quantitative data was analyzed using descriptive and inferential statistics. The data was presented in form of tables and models. The findings indicated that electronic banking constructs (Mobile banking R=0.616, P=0.000, internet banking R=0.528, p=0.000, electronic card banking R=0.530, p=0.000 and agency banking R=0.638, P=0.000) has significant influence on the financial inclusion among registered small and medium enterprises in Trans Nzoia County, Kenya. Financial inclusion significant accounts for 58.2% variation in the performance of commercial banks. The study recommended that financial institutions need to decrease electronic banking bill payment services so as to enable customers to undertake transaction through electronic banking. Financial institutions should also enhance electronic banking customer security and privacy to reduce fraud and cyber-crime associated with electronic banking.
Key Words: Mobile Banking, Agency Banking, Internet Banking, Electronic Card Banking
CITATION: Baraza, J. N., Miroga, J., & Otinga, H. (2024). Financial innovation and financial inclusion among registered small and medium enterprises in Trans-Nzoia County, Kenya. The Strategic Journal of Business & Change Management, 11 (2), 686 – 709. http://dx.doi.org/10.61426/sjbcm.v11i2.2939
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DOI: http://dx.doi.org/10.61426/sjbcm.v11i2.2939
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