Factors affecting the adoption of Information Communication and Technology among small and micro enterprises: the case of SMES in Nanyuki Town Council

Abstract

This is a study of the factors affecting the adoption of information and communication among small and micro enterprises in Kenya, a case study of Nanyuki Town in Laikipia County. There are 765 registered SMEs in the town council from documents collected from the Revenue section of Nanyuki Town council classified as Retail shops, Hardware shops, Butcheries, Salons, Supermarkets, Hotels and Cyber Cafes. From this population, the researcher sampled 247 SMEs for the study at a 10% sampling error. To get the desired sample size, the researcher used systematic sampling by picking a representative sample from every category of SMEs. This was then coded and analysed using the Statistical Package for the Social Science (SPSS) software. According to the gender of the sampled respondents the larger share with reference to gender males represented for 56.1 % while females were 43.9%. The largest share of the establishments were retail shops which accounted for 50.9 % whereas the smallest share was represented by hardware stores 7.0 %.

The study was able to establish that most of the forms of businesses were formal SMEs (77.2%). Ownership and presence of various ICT devices within the business premises included computer, fax, fixed/landline, internet, mobile and post office box. The largest share of respondents whom comprised of 12.3% had a Computer. Among the tested modes of communication within the SMEs face to face communication was the most popular at 50.9% while the mobile phone was represented at 39.5%. From the data collected cash payments was most favoured at 79.8% the reason given for this was because it was convenient for the particular business which accounted for 59.6% while internet banking was least popular at 2.6% and respondent acknowledged that it was more convenient for their type of business.

Mobile banking was represented at 5.3% and this was because it helps in isaving culture. With regard to lCT services meeting their business needs, 98.2% of the respondents acknowledged that they were effective in the day to day running of their enterprises. Majority of the respondents had acknowledged that lCT businesses did meet their business needs it was prudent for the study to establish the particular service that they deemed was beneficial to their business. Those that agreed accounted for 39.8% of the respondents whom acknowledge that let increased the speed of processing transactions.

Infrastructure presence is directly related to ICT use in business and as such the researcher sought to establish the availability of network whereby the majority identified that they had Airtel; Orange; Safaricom and Yu networks and amounted to 94.7%. Mobile phone accessories were the most popular form ofiCT service in the sampled businesses at 59.6%. The highest cluster was represented by those whom had attained the secondary level of education at 59.6%. University graduates were also relatively larger than the other groups and accounted for 12.3%.

Respondents were asked to give any other factors that they knew that would lead to the adoption or not of lCT services. Most of them acknowledged that lack of knowledge of the lCT devices and services they offer and they accounted for 22.8%; illiteracy was also another major factor in leT adoption in small businesses and this amounted for 37.7%. Lack of exposure, interest and time were all represented at 5.3%.