OWNERS’ PERCEIVED TRANSACTION VALUE AND PROFITABILITY OF SELECTED SMALL MEDIUM ENTERPRISES IN MACHAKOS TOWN, KENYA
OWNERS’ PERCEIVED TRANSACTION VALUE AND PROFITABILITY OF SELECTED SMALL MEDIUM ENTERPRISES IN MACHAKOS TOWN, KENYA
Vivian Nyokabi Muriuki - Master of Business Administration (Finance Option) of Kenyatta University, Kenya
Dr. Geoffrey Mbuva - Kenyatta University, Kenya
ABSTRACT
Small and Medium Enterprises are pivotal economic contributors in any economy. Be it an upcoming or developed one. However, the conceptual linkage between SME owners’ perception of digitized transactions and the profitability of this nature of firms remains a puzzle in the academic arena. This study evaluated the effect of SME owners’ perception of digital transactions on the profitability of SMEs in Machakos County. More specifically, this inquiry aimed at determining the effect of SME owners’ perceived transaction value on the profitability of SMEs in Machakos County. The study was underpinned by the following two theories technology acceptance theory, and profit maximization theory. The study used causal research design. The 4,136 SMEs operating in Machakos Town represented the study population where stratified, convenience and simple random sampling methodology was used to select the sample size which was 414 SMEs. To collect data, a drop-and-pick approach was relied upon whereby all the structured questionnaires were distributed to research participants who were the owners or top officials of the SMEs. To analyze the data collected the researcher relied on both descriptive and inferential approaches. The research findings portrayed that SME owners’ perceived transaction value had statistically significant effect on profitability of selected SMEs in Machakos Town, Kenya. To the top management of SMEs in Machakos Town, the research findings will aid them in decision making process such as giving preeminence the dimension of digital transactions as compared to manual approaches for innovation evolution is already up and running in the whole world which is more efficient and effective in executing most of the business transactions. The government agencies involved in promoting the wellbeing of SMEs such as Micro and Small Enterprises Authority (MSEA) will be guided in policy making process of creating of an enabling environment for SMEs. The study outcome will be beneficial to FinTech service providers to recognize the advantages and drawbacks of the online products they supply to their clients such as SMEs so as to tailor make them fully to ensure customer retention in future which will guarantee sustainable profitability amongst SMEs.
