ASSESSMENT OF MOBILE MONEY AND ITS IMPACT ON BUSINESS PERFORMANCE

Background to the study: Businesses, which involve individuals, groups of individuals, companies or corporations in public and private sectors play an important role in the economic development of a given country. In this era of globalization, the demands for goods and services lead to an intense competition especially among Small and Medium Enterprises (SMEs) operations in information technology, which supports efficient functioning of enterprises through management procedures and quality of operations (Januszewska, et al., 2015; John, et al., 2018).

Mobile money services can be broadly categorised into three groups: m-transfers, mpayments and m-financial services. M-transfers involve money transfer from one user to another, normally without any accompanying exchange of goods or services (Jenkins, 2008). These are also referred to as person-to-person (P2P) transfers and may be domestic or international (Jenkins, 2008). M-payments involve money exchange between two users with an accompanying exchange of goods or services. M-financial services are mobile money services in which mobile money may be linked to a bank account to provide the user with a whole range of transactions that they would access at a bank branch. Users access financial-related services like insurance and micro-finance among others via their mobile phones (Jenkins, 2008).

Empirical studies on mobile money services (e.g. Ngilangwa and Venkatakrishnan, 2013; Ngaruiya, et al., 2014) show that an increase of the usage of ICT by enterprises, as a new way of doing business in the 21st century, has brought benefits to SMEs. Such benefits include; availability of money transfer at lowercoststhan those offered by the traditional banking system. In the latter, some transactions are done within the premises of the bank and hence involve travel at time costs. In related perspective, Mbogo (2010) observes that mobile money services by micro businesses tend to enhance their success and growth. In the same context,Madila and Msamba(2016)argue that business success is facilitated by socio-economic context and the level of science and technology of the time. The state of art technology, which is used in a particular business supports efficient functioning of enterprises through linkages with customers and suppliers and hence attain more business success (Njau and Njuga, 2015).Technology usage can provide an avenue for SMEs to have competitive advantages by either increasing sales volume or customer base, which in turn helps to improve business prospects.

Globally, mobile money services (MMS) usage has increasingly become a facilitating condition for the formation and operation of SMEs, contributing to their progression and eventually becoming profitable income generating entities (Elms and Low, 2013, John, et al., 2018). In the same vein, many economies are getting away from cash payment due to proliferation of financial institutions and the increase in financial inclusion, which involves the use of credit and debit cards via mobile phones (TCRA, 2018). It is apparent that, MMS usage has widened the chances for business firms to increase their shares in the market, efficiency and effectiveness in the market, and hence promoting business transactions and meeting business prospects (Merritt, 2010; Chale and Mbamba, 2014). MMS usage has enabled new types of money flow, has enhanced interoperability particularly for unbanked members of the society, has led to the emergence of local lending businesses, and hence it has improved the employment level (Dick and Camer, 2014; Gilman, 2016).

Moreover, MMS usage has extended SMEs’ business linkages with a broad range of customers and suppliers of various goods and services (Donovan, 2012; Irura and Munjiru, 2013). MMS are available in two-thirds of low- and middle-income countries (LMICs) and have greatly been used by the populationsthat lackdirect access to formal Financial Institutions (FIs) (Ardjouman, 2014; John, et al., 2018). The usage of Mobile Money Services (MMS) in facilitating money transfer transactions is found to have a number of advantages, including (i) improving access to and the use of information, thereby reducing search costs; (ii) improving coordination among agents and increasing market efficiency; enhancing money circulation, reducing economic vulnerability, fostering entrepreneurship, increasing savings, promoting financial autonomy, enhancing money security and facilitating social capital accumulations (Aker and Mbiti 2010, Simiyu and Oloko, 2015). On these grounds, a technology is considered successful when it is well and used by the intended users and or hascontributed to the progression of enterprises into income generating and profitable.

Mobile money services (MMS) usage is a major source of enhancing competitive advantage as well as a cost effective means through which the SMEs can reach customers globally and compete with their global counterparts. In this regard, the Government of the United Republic of Nigeria is committed to actively ensure that the MMS ecosystem is running smoothly and assists SMEs to use it in their businesses operations.

MMS usage has played a vital role in improving business operation;however there are conflictingopinions about SMEs involvement in mobile business technology. For instance, Salah and Irwin (2010), revealed that although SMEs in Nigeria are aware of the benefits of mobile technology, very few have adopted it and hence they experience low uptake of MMS in business operation. According to Meena (2014),theMMS usage has boosted SMEs business success through reduced cost in performing financial transactions. The benefits have thus influenced their SMEs to continue using MMS in their business orientation.

In the same contexts, theories and studies on technology usage have inconsistent conclusions on factors influencing the usage of mobile technologies in Africa. However, studies done outside Africa have had contrastive findings; for example,Li’s, et al. (2014) study on the adaption of mobile payments shows that the number of merchants, the scope of services, the perceived ease to use, and compatibility of electronic systems have a significant influence on mobile payments in China. In another study on the receptiveness of mobile banking by Malaysian local customers in Sabah (Amin, et al., 2012) it was found that the perceived credibility, the perceived enjoyment, and the perceived self-efficacy are important determinants in predicting the intentions of Malaysia’s customers’ of using mobile banking.

Furthermore, Al-Fahim, et al. (2014) in a study on the adoption of internet banking services by Small and Medium Sized- Enterprises in Yemen, indicated that competitive pressure was the highest predictor followed by regulatory support and financial institution support while ICT readiness was insignificant. Merrit (2010) also conducted a study on Mobile Money Transfer Services,the Next Phase in the Evolution in Person-to-Person Payments in America and found that Money transfer services for both domestic and international remittances are shifting from traditional providers to wireless carriers who are able to compete for consumer market share on the basis of technological ubiquity and lower costsof services. Given the reflections from these few studies outside Africa it is apparent that there are unique characteristics that influence the adoption of mobile banking and MMT.

In the African context, Kuyoro, et al. (2013) conducted a study on ICT solution to Small and Medium Scale Enterprises (SMEs) in Nigeria.The findings indicate that ICT helped SMEs to create business opportunities, to combat pressures from competition and assisted to cut costs by improving their internal processes. ICT also helped SMEs to improvetheir products through faster communication with their customers and to promote and distribute their products through online channels. Crabbe, et al. (2009) on their study of usage of mobile banking in Ghana, established that social and cultural factors such as perceived credibility, facilitating conditions; and demographic factors do play a significant role in the adoption of MMS in SMEs operations.

Paucity of evidence on the influencing factors of MMS usageamong SMEs has motivated more studies in this particular aspect (Kimani, et al., 2016).The current study therefore aimed at filling the existing gap by identifying and analysingthe factors that influence the usage of mobile money services in SMEs Operations in Nigeria. Thus the study provides a framework for better understanding factors influencing mobile money services usage on SME business undertakings in Nigeria.