Abstract

Micro, Small, and Medium Enterprises (MSMEs) in Kenya, totaling 7.4 million, are crucial for socio-economic development and job creation. However, they face significant challenges due to inadequate access to digital services, especially fintech platforms. This study explored how the ease of accessing digital credit, its associated costs, information availability, and the regulatory landscape influence MSME growth in Uasin Gishu County, Kenya. Using an explanatory research design with simple and stratified random sampling, 121 top-level managers or owners were selected. Primary data was collected via semi-structured questionnaires. Data analysis involved descriptive statistics (percentages, frequencies, means, and standard deviations) and inferential statistics (correlation and multiple regression). Findings indicate that the ease of access to digital credit (r=0.673, p<0.001), information availability (r=0.701, p<0.001), and digital credit regulation (r=0.669, p<0.001) all positively and significantly influence MSME growth. Conversely, the cost of digital credit showed a significant negative correlation with MSME growth (r=−0.610, p<0.001). Collectively, these factors explained 60.0% of the variance in MSME growth (Adjusted R2=0.584), with the overall model being statistically significant (F (4,104) =38.921, p<0.001). The study recommends lowering interest rates, government regulation of digital lending practices to protect MSMEs, and policy frameworks that encourage easy information sharing on digital lending to foster MSME growth.

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