A Dissertation Submitted to the Faculty of Social Science in Partial Fulfillment for the Requirement of Award of the Degree of Master of Science in Economics of Mzumbe University
Mobile money technology has recently spread in developing countries especially in Tanzania. Despite its recent developments, micro, small and medium enterprises are still excluded from access to financial services. This study aimed to access the impact of mobile money services on the growth of MSMEs in Nkasi District in Rukwa, Tanzania. The objective of the study were; to examine whether sales through mobile money services has influenced significantly on the growth of MSMEs: To assess whether purchases of stock through mobile money services has significant influence on the growth of MSMEs: To examine whether paying for goods and services through mobile money services has significant influence on the growth of MSMEs: To assess whether saving and credit receiving use of mobile money services has significant influence on the growth of MSMEs. The cross-sectional research design was adopted in this study, where stratified random sampling was used to select respondents from population. Questionnaires were distributed to 100 MSMEs owners and managers in different strata namely; Kasu, Chala, Namanyele, Kilando and Kabwe. The binary logit regression analysis was used to analyze the data to observe the relationship between variables. The study found that sales, purchases of stock and paying for services through mobile money services had positively significant influence on the growth of MSMEs. Furthermore, the study found that, saving and credits receiving as well as reduced cost are positively insignificant influence on the growth of MSMEs. Also finding reveals that trust worth and safe has negative insignificant influence on the growth of MSMEs. Mobile money services have significant influence on the growth of MSMEs in rural areas. The study recommended that, government should establish financial policy which can encourage MSMEs to use mobile money services for business purpose and move to cashless society in future. Moreover, the government should reveal its tax policy to eliminate Value Added Tax (VAT) on mobile money services which may stimulate the MSMEs to use the services for the growth of their business especially in rural areas in Tanzania.