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Published:
Aug 4, 2022Article Details
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Main Article Content
Impact of mobile money microcredit on financial performance of small business in Iringa Municipality, Tanzania
Abstract
Purpose: Small businesses in Tanzania's economy were examined in this paper to determine their use of mobile money microcredit and how it impacts their profitability.
Design/Methodology/Approach: A cross-sectional design was adopted to collect quantitative data from 240 small business owners/managers through a structured questionnaire and qualitative data from mobile money services providers using an interview guide. The reliability test using Cronbach’s Alpha was conducted and the coefficient (0.851) signifies that the data collection instrument was reliable. The collected data were analysed using descriptive statistics and a multiple linear regression model.
Findings: The results of this study indicate that mobile money microcredit accessibility, affordability, convenience and flexibility were found to have a positive and significant impact on small businesses' financial performance. This means accessibility, affordability, convenience and flexibility of mobile money microcredit are important predictors of small businesses' profitability.
Implications/Research Limitations: The present study focused on the performance of small businesses concerning mobile money microcredit systems.
Practical Implications: The findings of this paper would be useful for mobile money microcredit service users, specifically small business owners/managers, and mobile money providers as well as institutions involved in the facilitation and regulation of mobile money microcredit services to put in place appropriate strategic frameworks to promote the adoption and use of mobile money microcredit service.
Social Implications: Formulated policies should take into account the impact of accessibility, affordability, convenience and flexibility of mobile money microcredit to ensure increased small firm productivity, efficiency and profitability.
Originality/Value: Past studies have not extensively covered the impact of mobile money microcredit on the performance of small businesses in the Tanzanian context. Based on prior empirical and theoretical research, the findings of this study contribute to a better understanding of the impact of mobile money microcredit on the performance of small businesses.
