M-PESA AND ITS PERCEIVED EFFECT ON PERFORMANCE OF MANUFACTURING FIRMS: A CASE STUDY OF THIKA TOWN IN KENYA
DOI:
https://doi.org/10.14738/assrj.21.825Keywords:
Innovation, Mpesa Mobile Phone Service, Manufacturing firm, PerformanceAbstract
During the last decade great expansion of information and communication technologies
has taken place and indeed set the stage for a new era of entrepreneurial opportunities
and challenges worldwide. The ever increasing development of technology has led
businesses to continually assess whether new technology is worth investing in and
could possibly enhance their business activities. Mobile Technology has indisputably
been one of the most considerable contributors of good performance in business. Mobile
technology which is the advent of entrepreneurial innovation has gained attention
worldwide and is increasingly used to support performance in various manufacturing
firms. Firms are applying this entrepreneurial innovation to achieve various business
benefits including efficiency and effectiveness through improved productivity, cost
savings, and reach ability communication and customer satisfaction. In March 2007,
Safaricom mobile operator launched M-Pesa the mobile money transfer system which
has become a popular mobile payment system with both the banked and the unbanked
Kenyan population and has revolutionized the mode of conducting business in Kenya.
However, very little had been done to assess the perceived effect of MPESA service on
performance of manufacturing firms. This called for more research and the fact that
more work on money transfer had been done outside Kenya constituted the need to
study the Kenyan situation to see which side of the debate Kenyan results would fall.
This study therefore sought to establish the perceived effect of MPESA mobile service
on performance of manufacturing firms in Thika town in Kenya. A two-stage sampling
technique was employed. In the first stage firms were divided into three groups (Small,
Medium and Large) according to the number of employees. In the second stage simple
random sampling technique was applied where each manufacturing firm from each
2
category was given a serial number in its respective category and the numbers picked at
random. A total of 120 questionnaires were self-administered yielding 100% response
rate. The data was subjected to detailed exploratory analysis through descriptive and
inferential analysis. Reliability and internal consistency of the measurement scale was
tested using Cronbach‟s alpha. Analysis of Variance (ANOVA) was engaged to
calculate the statistical significant differences between means. Post Hoc analysis was
conducted using the Scheffe test to check the statistical significant differences between
independent variables constituting the firm characteristics. Multiple regression analysis
was engaged to analyze, establish relationship between variables and test the
hypothesis. Findings revealed M-Pesa was frequently used and was perceived to have
great positive effect on the performance of manufacturing firms. The location of the firm
from the town Centre moderated the effect of M-PESA 2kms away from CBD. Results of
the study revealed that M-PESA mobile phone service was perceived to have
significantly increased sales volume, profit, worker productivity, and customer
satisfaction ratings. These Results therefore confirm that it is worth for firms to adopt
and adapt to the new techno status quo resulting from entrepreneurial innovations in
order to not only survive in the market but also attain a competitive edge.
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