Role of Financial Capabilities in Harnessing Digital Mobile Payments for Enterprise Success

In Kenya, Micro and Small Enterprises (MSEs) are key engines for growth, creation of employment, innovation, industrial development and GDP growth. The 2016 Kenya National Bureau of Statistics data indicates that this sector accounted for 45 per cent of the establishments and 85 per cent of employment (KNBS, 2016). Despite their great importance, the sector has experienced many challenges, one of them being the exclusion, in terms of access and use, of formal financial products. Financial capability, the theory in which this study is anchored, proposes that an MSE must have the opportunity to access suitable quality financial products (Storchi and Johnson, 2106). However, it emphasizes that the performance of the MSEs and, in turn, the well-being of the entrepreneur hinges on the financial capabilities of the entrepreneur to embed the use of financial products. We examine two aspects of financial capabilities in this study: financial literacy and financial behaviour.