EFFECT OF AGENT BANKING ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KENYA: A CASE OF KISUMUCOUNTY
Abstract
This study sought to establish effect of agent banking on the performance of Small and Medium Enterprises in Kisumu County, Kenya. The study was based on a target survey of 3680 Small and Medium Enterprises. The study was guided by the following specific objectives: To determine the effect of frontline customer services on the performance of SMEs in Kisumu County; To examine how intermediary banking transaction by agent bank affect performance of SMEs in Kisumu County; To establish how account opening services by agent bank influence the performance of SMEs in Kisumu County and to examine how loan application services by agent bank influence performance of SMEs in Kisumu County. The study adopted a descriptive survey and a stratified sampling technique method was used and data was collected through the use of questionnaires. A pilot study was conducted to pretest the validity and reliability of instruments for data collection. The data was analyzed by use of both qualitative and quantitative methods with the help of Statistical Package for Social Sciences (SPSS) version 23 and excel. The correlation and regression analysis was used to establish the direction and strength of the relationship of the variables at 5% level of significance. The study established that R2 in the model was .556 meaning that all independent variables (Frontline customer services, Intermediary bank transaction services, Account opening services, and Loan application services) contribute 55.6% to the total variability in the dependent variable (Performance of SMEs). However, beta coefficient results revealed that only Intermediary bank transaction services and Account opening services were statistically significant. This therefore implied that SMEs should mainly focus on Intermediary bank transaction services and Account opening services as they significantly influence their performance.
Key Words: frontline customer services, intermediary banking transaction, account opening, loan application, performance of SMEs in Kisumu County
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DOI: http://dx.doi.org/10.61426/sjbcm.v5i1.667
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