Impact of Accessibility of Digital Financial Services on Financial Inclusion Among SMEs in Taita Taveta County, Kenya

Despite its potential, the impact of digital finance on small and medium enterprises’ access to funding remained underexplored, with limited empirical evidence and an incomplete understanding of how digitalization addressed information-related challenges. In Kenya, small and medium enterprises were critical to economic growth. However, many small enterprises faced financial exclusion due to limited access to traditional banking systems. This study investigated the impact of accessibility to digital financial services on financial inclusion among small and medium enterprises in Taita Taveta County, a county characterized by a burgeoning digital economy and a significant reliance on mobile financial solutions. With the rapid growth of mobile money platforms, particularly M-Pesa, and digital lending services, small enterprises gained unprecedented access to financial resources that were previously out of reach. The research employed a quantitative approach, utilizing a structured questionnaire to gather data from 125 SMEs across various sectors in Taita Taveta County. The findings revealed that digital financial services, particularly mobile money platforms like M-Pesa and digital lending services such as Tala and M-Shwari, substantially enhanced small enterprises' access to financial resources, thereby mitigating traditional barriers to finance. The study identified key factors influencing the adoption and utilization of digital financial services, including technological literacy, cost-effectiveness, and the perceived ease of use. Furthermore, it explored the implications of these services on small and medium enterprises' operational efficiency, growth potential, and overall contribution to economic development. This research not only contributed to the theoretical discourse on financial inclusion but also provided practical insights for policymakers and financial institutions aiming to foster an inclusive financial ecosystem for small and medium enterprises in Kenya. Additionally, the study highlighted the role of digital financial services in improving transaction efficiency and reducing reliance on traditional banking infrastructure. The results underscored the importance of digital financial services in promoting financial inclusion, ultimately contributing to the economic development of small and medium enterprises in Taita Taveta County.