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Financial Technology and Financial Performance of Micro, Small and Medium Enterprises in Kakamega County, Kenya

Author

Listed:
  • Cosmus Karisa Katana

    (Department of Economics, Finance and Accounting, Kibabii University)

  • George Mukanzi Peter

    (Department of Economics, Finance and Accounting, Kibabii University)

  • Dr. Rashid Fwamba

    (Department of Economics, Finance and Accounting, Kibabii University)

Abstract

Financial performance of Micro, Small, and Medium Enterprises (MSMEs) in developing countries remains a major concern despite their dominance in the entrepreneurial sector. Many MSMEs struggle with limited access to formal financial services and inefficient resource management. The insufficient integration of financial technology (FinTech) continues to hinder their potential to enhance efficiency, improve financial inclusion, and drive sustainable economic growth. This paper explored the relationship between financial technology and the financial performance of MSMEs in Kakamega County, Kenya. The data collected for this study was mainly primary data obtained through the distribution of structured questionnaires to MSMEs in Kakamega County. The target population was 2370 MSMEs operating in Kakamega County. The sample size in this study was 342 respondents was obtained by using the Yamane Formula (1967) where a total of 327 were duly completed and returned, yielding a high response rate of approximately 95.6%. The data obtained was analysed using SPSS software. Findings revealed that financial technology was statistically significant on the financial performance of MSMEs in Kakamega County, Kenya. The study recommends MSME owners in Kakamega County should receive targeted training programs to enhance their understanding and usage of FinTech.

Suggested Citation

  • Cosmus Karisa Katana & George Mukanzi Peter & Dr. Rashid Fwamba, 2025. "Financial Technology and Financial Performance of Micro, Small and Medium Enterprises in Kakamega County, Kenya," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 12(5), pages 1584-1593, May.
    • Handle: RePEc:bjc:journl:v:12:y:2025:i:5:p:1584-1593
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    References listed on IDEAS

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    1. Ebrahim Endris & Andualem Kassegn, 2022. "The role of micro, small and medium enterprises (MSMEs) to the sustainable development of sub-Saharan Africa and its challenges: a systematic review of evidence from Ethiopia," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-18, December.
    2. Marek Dabrowski, 2017. "Potential Impact of Financial Innovation on Financial Services and Monetary Policy," CASE Reports 0488, CASE-Center for Social and Economic Research.
    3. Mário Nuno Mata & Sayyed Sadaqat Hussain Shah & Nida Sohail & Anabela Batista Correira, 2023. "The Effect of Financial Development and MFI’s Characteristics on the Efficiency and Sustainability of Micro Financial Institutions," Economies, MDPI, vol. 11(3), pages 1-16, March.
    4. Paul Saah, 2021. "The impact of small and medium-sized enterprises on the economic development of South Africa," Technium Social Sciences Journal, Technium Science, vol. 24(1), pages 549-561, October.
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