THE ROLE OF MOBILE MONEY SERVICES ON GROWTH OF SMALL AND MEDIUM ENTERPRISES IN TANZANIA: EVIDENCE FROM KINONDONI DISTRICT IN DAR ES SALAAM REGION

Abstract

This study examined the role of mobile money services on growth of small and medium enterprises in Tanzania, where data was collected from respondents in Kinondoni District in Dar es Salaam Region. Data was collected using self-administered questionnaires, which were distributed to 100 respondents, who yielded a 90% return rate. Multiple regression analysis was used to test the role of increased volume of sales, efficiency in purchase of stock, reduced time in processing payments, payments of goods and services, improved habit of savings, and money transfer on business growth in terms of market share, revenue and profitability. Based on technology adoption theories, the study findings revealed that small and medium enterprises use mobile money services in various ways for business purposes, which include sales transactions, efficiency in purchase of stock, receiving payment, payment of goods and services, savings as well as money transfer that influenced their business growth. Based on the study findings, it is recommended that there is a need for SMEs to continue using mobile money in their businesses so as 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 (other than ones tested in this research, which are sale transactions, efficiency in purchase of stock, to receive payment, payments of goods and services savings money) in their businesses, which in turn, will attract more customers and facilitate SME business growth.