Effect of E-Banking Strategy on Growth of Small and Medium Enterprises in the Hospitality Industry in Nairobi County, Kenya

Abstract

Small and Medium Enterprises contribute up to eighty five percent of  all new jobs created in Kenya. However, they are characterized by high mortality rate. Even though this is the case, the United Nations Conference on Trade and Development report linked better performance and growth of small and medium enterprises to adoption of new technology such as e-banking. The study sought to establish the effects of e-banking strategy on sustainable growth of small and medium enterprises in the hospitality industry in Nairobi County, Kenya. The study specifically examined the effect of mobile banking strategy on sustainable growth of small and medium enterprises in the hospitality industry in Nairobi County, Kenya. An explanatory research design was used for the study. The target population of the study was 183 licensed hotels in Nairobi County, Kenya. The respondents were either the hotel owners or the general managers for each of the hotels. Questionnaires were used to collect primary data. Drop and ick procedure was adopted for data collection and the period was three weeks. The collected data was coded and analyzed using Statistical Package for Social Sciences version 22. The study used descriptive statistics that is mean, standard deviation and percentages to analyze the data. Furthermore, correlation and univariate regression analysis was also adopted. The findings of the study indicated that mobile banking has a positive and significant influence on sustainable growth of small and medium enterprises in the hospitality industry in Nairobi County, Kenya. The study concluded that an increase in adoption of mobile banking by the small and medium enterprises improves sustainable growth of small and medium enterprises in the hospitality industry in Nairobi County significantly. The study recommends that small and medium enterprises in the hospitality industry should focus on mobile banking to apply for loans to boost the business, for investment purposes, making deposits, withdrawing funds from the bank and transacting for the purpose of enhancing sustainable growth.

Key Words: Mobile Banking, E-banking Strategy, Sustainable Growth, SMEs, Kenya