Fintech Adoption and Credit Access of Micro, Small, Medium Enterprises in Nairobi City County, Kenya.

Abstract

Access to credit remains a major constraint for Micro, Small, and Medium Enterprises (MSMEs) in Nairobi City County, limiting their ability to grow, innovate, and sustain operations. Although financial technology (FinTech) solutions have emerged to ease credit constraints, their effectiveness in improving credit access among MSMEs remains insufficiently explored in the Kenyan context. This study sought to examine the influence of FinTech adoption on credit access among MSMEs, focusing on the effects of mobile lending, digital banking, and web-based platforms, as well as the moderating role of regulatory frameworks. The study was anchored on the Disruptive Innovation Theory, the Technology Acceptance Model (TAM), and the Theory of Planned Behavior (TPB), which collectively explain how FinTech innovations drive behavioral change and financial inclusion. A descriptive research design was adopted, utilizing a quantitative approach. Data were analyzed using descriptive analysis. The target population comprised registered MSMEs in Nairobi City County, from which 200 respondents were selected using stratified sampling. Data were collected using structured questionnaires and analyzed through descriptive and inferential statistics using SPSS version 28. Simple linear regression analysis was used to determine the effects of each FinTech variable on credit access, while hierarchical regression assessed the moderating effect of regulatory frameworks. The findings revealed that mobile lending has a positive and statistically significant effect on credit access, enabling quicker access to short-term credit with minimal collateral requirements. Digital banking also exhibited a positive and significant effect, improving loan processing efficiency, repayment flexibility, and financial record management. Similarly, web-based financial platforms showed a positive and significant effect on credit access by enhancing transparency and accelerating loan approvals. The results further indicated that regulatory frameworks significantly moderate the relationship between FinTech adoption and credit access by boosting confidence and reducing risks associated with digital credit services. The study concludes that FinTech adoption enhances financial inclusion, improves loan accessibility, and supports operational efficiency among MSMEs. It recommends strengthening regulatory oversight, improving cybersecurity, and promoting digital literacy to maximize the benefits of FinTech-driven credit solutions.