Effect of Agency Banking and Digital Wallet Technologies on Performance of Small and Medium Enterprises in Nairobi County, Kenya

This study examined the associations of agency banking and digital wallet technologies with the performance of small and medium-sized enterprises (SMEs) in Nairobi County, Kenya. It was informed by the Technology Acceptance Model, the Resource-Based View and agency theory. The investigation employed a cross-sectional explanatory survey design and collected information from SME respondents using a structured questionnaire. The reported sample size was 200, and multiple regression analysis was used to assess the relationships between the two financial technologies and SME performance. Agency banking technology had a negative but statistically non-significant association with SME performance (B = −0.040, p = 0.461). In contrast, digital wallet technology showed a positive and statistically significant association with performance (B = 0.290, p < 0.001). The reported model explained 17.8% of the variation in SME performance scores (R² = 0.178), with an adjusted R² of 0.159. These findings indicate that the two financial-service channels were associated differently with enterprise performance within the study setting. Because the research was cross-sectional, the reported relationships should not be interpreted as causal effects. Banks and agent-network operators should monitor agent liquidity, service reliability, operating hours, transaction failures and complaint resolution. Decisions about expanding agency banking should be informed by local demand and service-quality evidence. Digital wallet technology may also be relevant to SMEs seeking to manage their transactions and financial processes more effectively.