Abstract:
The aim of this study was to determine effects of mobile money transactions on financial performance of Small and Medium enterprises in Nakuru Central business district. The objectives of the study were to determine, the frequency by which SMEs use mobile money transaction to carry out their business financial transactions financial; and the effects of mobile money transaction on sale revenue, debt collection, and cash management. The study employed descriptive survey research design. 120 out of 640 SMEs businesses were sampled using simple random sampling. The respondents were selected by use of purposive sampling technique. Questionnaire was used as data collection instrument. The data was analyzed using both descriptive and inferential statistics. For descriptive statistics the study used frequency, percentages and mean. Chi- square test was used to establish whether there was any relationship between the use of Mobile Money Transfer (MMT) and financial performance of SMEs. The results were presented using charts, frequency tables, and graphs. The findings of the study reveals that, the proportion of SMEs using mobile money transaction was significant compared to those which did not. In addition, the study established that the frequency by which SMEs use of mobile money transaction was statistically significant. The study also established that SMEs after adopting the use mobile money, performed better than they used to. However this usage of MMT had no statistical significant effect on sales revenue, debt collection and cash management of SMEs. On the basis of these findings the study recommends that SMEs should monitor the usage of mobile money transaction in order to realize its benefits on the financial performance of their businesses. Since most of SMEs use mobile money to carry out their financial transactions, the government should come up with a legislation that protect the usage of mobile money and make it an acceptable way of transacting business
