Credit Cost and Choice of Mobile Lending Platforms: Case of Tharaka Nithi County Small-Scale Enterprises

Abstract

The advent of digital lending through mobile lending platforms has improved access to credit for small-scale enterprises. However, since mobile lending platforms are unregulated in Kenya, predatory lending is rampant and hence it is vital for small-scale enterprises to make informed choices when they are selecting mobile lending platforms. The purpose of this study was to determine the effect of credit cost on the choice of mobile lending platforms among small and medium enterprises in Tharaka Nithi County in Kenya. This study applied a descriptive research design on a population of 745 small-scale enterprises in Tharaka Nithi County. A sample of 260 small-scale enterprises was selected and questionnaire were applied to collect data. The collected data was analysed using descriptive statistics and multi-linear regression. The presentation of the findings was through figures and tables. The study findings determined that credit cost had a significant and positive effect on choice of mobile lending platforms by small-scale enterprises in Tharaka Nithi County, Kenya.

Keywords

• credit cost, small-scale enterprises, choice of credit, mobile lending platforms