Karatu Kiemo and Barbara Leseni, University of Nairobi Kenya

1. Mobile Money Services and Entrepreneurial Development In Rural Communities A Report of Preliminary Findings Karatu Kiemo and Barbara Leseni, University of Nairobi Kenya

2. Background • This study was set against clear indications of expansion of mobile money services (MMS) to rural people who have been traditionally excluded from baking services. • A key assumption was that exposure to banking services inculcate among users positive attitude and behaviors of personal finance management e.g., budgeting, saving, investment and entrepreneurship.

3. The study hypothesized that MMS use might influence personal finance management and entrepreneurship. • The study was guided by the theory of planned behavior (Ajzen, 1991), which holds that intention is the most important predictor of behavior.

4. Applied to entrepreneurship, the theory has led to the development of: • entrepreneurial intention model (EIM) (Ajzen, 2002) and; • entrepreneurial intention questionnaire (EIQ), which has been validated in several studies (Linan and Chen, 2006).

5. Ajzen’s model of planned behavior

6. Components of EIM: Personal Attitude • Personal attitude was measured by 5 items: • Being a businessperson implies more advantages than disadvantages to me • A career as businessperson is attractive for me • If i had the resources, i would like to start a business • Being a businessperson would entail great satisfaction for me • Among other options, i would rather be a businessperson

7. Component of EIM: Subjective Norm • Subjective norm was measured by six items: • To what extent would your spouse approve/disapprove of your decision to start a business? • To what extent would your children approve/disapprove of your decision to start a business? • To what extent would your siblings approve/disapprove of your decision to start a business? • To what extent would your parents approve/disapprove of your decision to start a business? • To what extent would your close friends approve/disapprove of your decision to start a business? • To what extent would your workmates approve/disapprove of your decision to start a business?

8. Component of EIM: Perceived behavioral Control Perceived Behavioral control was measured by 6 items: • To start a business and keep it running would be easy for me • I am prepared to start a viable business • I can control the creation process of a new business • I know the necessary practical details to start a business • I know how to develop a business entrepreneurial project • If I tried to start a business, I would have a high probability of succeeding

9. Component of EIM: Entrepreneurial Intention • Entrepreneurial intention was measured by 6 items: • I am ready to do anything to be a businessperson • My professional goal is to become a businessperson • I will make every effort to start and run my own business • I am determined to create a business in the future • I have very seriously thought of starting a business • I have the firm intention to start a business some day

10. Measuring Personal finance Management • Personal finance management was measured by questions on whether one does budgetary planning and whether formally. • It was also measured by 6 Likert-type scale of 6 positively and negatively worded items: • I seriously think about my life in retirement; • I save money to help me in retirement; • I have made investments to help me in retirement; • I seriously think of who will inherit my assets when I die; • It is impossible to think about my own death; • I have no assets to be inherited by anyone.

11. Method • The study adopted two designs - A cross section survey and a comparison of agricultural and pastoralist modes of livelihoods. • Participants were selected randomly through a two-stage sampling design • The sample included 174 participants – 51.7% (90) from agricultural zone and 48.3% (84) from pastoralist zone.

12. Table 1: Sample description

14. Substantive Data Analysis • Each of the 174 respondents had their values of responses (1 = SD; 2 = D; 3 = A; 4 = SA summed for individual components and the composite variable. • Subjective norm was excluded in this computation due to presence of “not applicable” response category. • The scores were treated as interval type of measurement and compared using Analysis of Variance test (SPSS Version 16)

15. Substantive/Tentative Results Hypothesis 1: There is a relationship between MMS use and entrepreneurial intention • There was no significant difference between MMS users and non-users in relation to the composite entrepreneurial intention variable (F = 1.913).

16. Disaggregating for the constituent variables, significant difference was found in entrepreneurial intention (F = 6.254, p< 0.05) but not in personal attitude and behavioral control. • In respect to significant finding (above) MMS users had higher entrepreneurial intention than non-users as was hypothesized (Table 1).

17. Table 3: Levels of agreement on entrepreneurial intention among MMS users and non-users

18. MMS use was also measured by length of use disaggregating for under 1 year, 1 -3 years and above 3 years. • The results showed no difference in the composite variable (F=0.421) and particular components.

19. Hypothesis 2: There is a relationship between MMS use and personal finance management. • This was strongly confirmed (F=21.991, p< 0.001) with MMS users having the higher level of positive attitude on PFM than non-users.

20. Table 4: Levels of agreement on personal finance management among MMS users and non-users

21. The mode of livelihood had no significant influence (F= 2. 279, p = .1).

22. Influence of mode of livelihood Hypothesis 3: The mode of livelihood mediates between MMS use and entrepreneurial such that those from agricultural area are more likely to have higher entrepreneurial intention. • There results showed no relationship (F = 1.833 for MMS use and 0.0 for mode of livelihood) for the composite variable.

23. But with regard to the entrepreneurial intention component the difference between users and non-users “disappeared” (F = 3.306, p = 0.071). • But the difference between mode of livelihood was significant (F= 12.990, p< 0.0001).

24. Table 5: Levels of agreement on entrepreneurial intention among users by mode of livelihood

25. MMS users in the agricultural had the higher entrepreneurial intention. • The two variables, however, could explain only 10% of the variation (Eta = 0.104).

29. Test question • Supposing you had a need and asked a friend to lend you 10,000/= to return in 3 months which he does but you manage your need with half the amount, what would you do with the rest?

32. Conclusion • The preliminary analysis showed no influence of MMS use on entrepreneurial intention as a composite variable. • However, MMS was found to have significant influence on the component of entrepreneurial intention.

33. The study also found that MMS use have positive influence on personal finance management. • These results are good news for policy since they imply accelerating MMS use might indeed increase rural people’s entrepreneurial attitude and behavior.

34. An important finding from the study was the low perceived behavioral control (Data not shown). • This may mean people have the wish to become entrepreneurs but they are limited by know how. • The policy implication is the need for entrepreneurial training that would make people have the courage to venture in entrepreneurial activities.

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