| dc.description.abstract | Despite the noble duty of SMEs of promoting economic development in the economy,
financial inclusion is yet to be achieved. As at the end the year 2023, financial
inclusivity was still not yet fully achieved. The general objective was to establish the
effect of financial innovation on financial Inclusion among SMEs in Kakamega County,
Kenya. Specifically, the study determined the effect of mobile banking, agency banking
and internet banking on financial inclusion among SMEs in Kakamega County. The
study established the moderating effect of firm size on the association between financial
innovation and financial inclusion among SMEs in Kakamega County, Kenya. This
study was guided by diffusion innovation theory, financial intermediation theory,
agency theory and markets imperfection theory. Descriptive and causal design were
adopted for a target of 9116 SMEs, of which 369 SMEs owners were sampled and used
questionnaires for data collection. Reliability was tested using Cronbach alpha whereas
validity through content analysis of the expert opinion. Analysis of the data was based
on inferential as well as descriptive statistics. The study established that financial
innovation parameters; mobile banking (p=0.003 at P<.005), Agency banking (p=0.002
at P<.005), and Internet banking (p=0.000 at P<.005) had a positive correlation
coefficient. Lastly, the size of business had a moderating positive correlation coefficient
(p=0.000 at P<.005). The results also showed that the financial innovation variables had
a significant relationship to financial inclusion, hence SMEs should increase the uptake
of mobile banking, internet banking, and agency banking services available and
accessible to enable convenient operations and transacting hence financial inclusion.
Finally, the study findings showed that the size of business was of significance on
financial innovation and financial inclusion, hence business owners should make an
effort to grow their businesses. Research results may be of help to SMEs in assessing
the significance of financial innovation towards accessing timely and affordable
financial facilities. As a result, this may enable SMEs to access financial products and
services such as loans more conveniently and cheaply, thereby increasing their financial
muscle and improving their operations, hence yielding more profits. | en_US |
