Influence of Mobile Money Transfer Services on the Performance of Micro Enterprises in Kitale Municipality

Application of the mobile phones for money transfer, referred to as Mobile Money Transfer (MMT) has marked a new frontier in mobile phone technology with an ever increasing number of micro businesses using it in their transactions to enhance performance. The number of uses to which Mobile Money Transfer (MMT) can be put keeps increasing with time. However, it was not clear how Mobile Money Transfer use influences the performance of micro enterprises. The study sought to determine if its use in Kitale municipality, a rural town setting, has resulted in success and growth of micro enterprises. The study was based on a survey of 36 micro enterprises, from three major sectors of the Kenyan economy, agriculture, service and processing sectors. Micro enterprises that were studied are those that have been in existence for more than 5 years and have experienced business without Mobile Money Transfer (MMT), before 2007, and thereafter with it. The study used a questionnaire as an instrument for data collection. The data so obtained was analyzed using chi-square to establish the relationship between Mobile Money Transfer (MMT) use and business performance. The key findings are that use of Mobile Money Transfer for: B2B (business to business) transfer when making purchases from suppliers and C2B (customer to business) transfers when customers buy from the business and for debt collection for credit sales contributed to improved performance of the micro enterprises.