Search

The purpose of this paper is to establish the effect of the ease of access to mobile credit on the financial prosperity of MSEs. The ease of access describes the simplicity and easy way of enabling the provision of credit to a mobile money subscriber. Mobile credit means the credit offered through mobile phones whether from mobile phone operators in conjunction with banks or non-bank financial institutions or stand-alone mobile finance companies as per AFI - Global (2020) definition. This study tries to analyze whether there is a relationship between ease of access and the financial prosperity of an entrepreneur. Financial prosperity on the other hand is the economic well-being of a person or institution. The study adopted a descriptive research design. The target population for this study was 271,365 Licensed Small and Micro entrepreneurs in Nairobi County as per the Nairobi City County Licensing Database as of 16th November 2020. The sampling design employed a stratified sampling design to achieve a representative sample of the respondents. The sample size was 400 MSEs from each MSE, and the owner or key member was picked to participate. Overall, it was found that ease of access to mobile credit had a positive influence on financial prosperity. This implies that improved access to mobile credit leads to improved financial prosperity. An increase in Ease of access has a significant positive relationship (1.741432) with the financial prosperity composite. An increase in ease of access by one unit leads to an increase in financial prosperity by 1.741 units. Based on the study findings, it is recommended that mobile lenders should offer mobile credit with affordable terms. The mobile credit lenders should maintain a short period of the mobile money application process and approval to enhance the profitability and leverage of businesses. With good use of mobile credit, increased liquidity would increase financial prosperity for micro and small entrepreneurs. [ABSTRACT FROM AUTHOR]

The recent proliferation of mobile financial services in developing countries has increased access to financial services among underserved rural and low-income populations. Mobile credit is one emerging mobile financial service that allows consumers to quickly apply for and receive loans over mobile devices. Mobile credit services have achieved early success in Kenya and Tanzania, two mature markets for mobile financial services. While these new services have the potential to further promote financial inclusion, they also raise novel regulatory issues and do not fit neatly into pre-existing regulatory categories. This is due to the nature of mobile credit and the variety of entities and regulatory frameworks implicated in the business models found in these two markets. Policymakers and regulators will need to make choices about how to regulate mobile credit with respect to consumer protection, credit reporting and the use of mobile and mobile money services transactional data, a key input for credit evaluation decisions. These choices will need to take into account promotion of financial inclusion and protection of consumers while limiting disincentives for innovation and investment.

This study examines the effect of mobile technologies on the choice of self-employment in Kenya. The study used the 2016 household FinAccess retail survey data, which was collected using stratified multi-stage sampling to ensure representativeness at the national, regional, and residence (urban vs rural) levels. A probit model was used to analyse the data. The study finds that mobile phones, mobile money, mobile banking, and mobile credit influence one's decision to become self-employed. Other contributing factors include age, gender, marital status, education, wealth, place of residence, and the number of dependents in the household. These findings suggest that entrepreneurship policy in Kenya will have greater impact by enhancing access to mobile technologies. [ABSTRACT FROM AUTHOR]