The impact of mobile money services on growth of small and medium enterprises (SMEs) in Tanzania: a case of Kinondoni District in Dar es Salaam

This study examined the impact of Mobile money services on Growth of small and Medium Enterprises (SMEs) in Tanzania: A case of Kinondoni District in Dar es Salaam. Data were collected using self-administered questionnaires which were distributed to 100 respondents, who yielded a 90% percent return rate. The data collected were analyzed using Statistical Package for Social Sciences (SPSS) version 20.0; particularly in cross tabulation whereas, multiple regression analysis was listed for the dependent variable regressed on all independent variables. In consequence, the findings were tabulated and summarized, with percentages, mean and standard deviations obtained. The study findings show that SMEs use mobile money services in various ways for business purposes which include sales transactions, purchase of stock, receiving payment, payment of goods and services, savings as well as money transfer, which significantly influenced their business growth. As the study results show increased in sales volumes, increased efficiency and time saved. The findings from the multiple regression analysis have also shown that there is variation in the effect of the usage of mobile money on the contribution of business growth as such; they are good predictors of SMEs business growth. Furthermore, the majority of respondents were satisfied with the various uses of mobile money, whereas it was found very few used mobile money services for savings. Moreover, it was revealed that SMEs face challenges in using mobile money services which hinder their business growth. Some of which were shortage of cash among agents, transaction fees, poor customer care and insufficient e-float among agents. The findings show that SMEs are satisfied with network connectivity, knowledge and understanding among agents and the security of transaction which in turn strongly influences their perception of mobile network providers which leads to continuous usage of mobile money services. Based on the study findings, it is recommended that there is a need for the SMEs to use mobile money in their businesses to enhance their businesses and reduce some costs such as cost of travelling/money in their businesses to enhance their businesses and reduce some costs such as cost of travelling/money transfer as well as time for processing payments. Moreover, they should review their business strategies to include other uses of mobile money in their businesses which in turn will attract more customers and facilitate SMEs business growth.