The effect of transaction costs of mobile credit on the financial prosperity of micro and small entrepreneurs in Nairobi County, Kenya

Abstract

The purpose of this paper is to establish the effect of transaction costs of mobile credit on financial prosperity of MSEs. Financial prosperity looks at constructs of profitability, the leverage and liquidity. The study adopted a descriptive research design. The target population was 271,365 licensed MSEs as per the Nairobi City County Licensing Database as of  November 2020. The sample size was 400 MSEs. The results showed a negative and significant (P-value = 0.005) influence oftransaction costs of mobile credit on financial prosperity of micro entrepreneurs. Thus, an increase in transaction cost of mobile credit leads to a decline in financial prosperity for the MSEs.