Financial technology and entrepreneurship in Kenya: A propensity score matching approach

Rodgers Musamali Anyanga, Bhavish Jugurnath and Jackson Maalu

Journal of the International Council for Small Business, 2025, vol. 6, issue 3, 392-405

Abstract: Financial technology (FinTech) as a form of technological advancement creates jobs, spurs innovation and entrepreneurship, and contributes to economic growth. In Kenya, it has helped narrow financial exclusion from 41.3 to 11.6 percent. Despite the gains in FinTech, low levels of innovation and entrepreneurship culture persist. Further, there is little research associating FinTech and entrepreneurship. We bridge this gap by investigating the impact of FinTech on entrepreneurship in Kenya. Using propensity score matching, age of the firm, formality status, gender, education level, innovation, and access to credit affect FinTech uptake. FinTech can shape the future of entrepreneurship by spurring growth of establishments, promoting and lowering opportunity entrepreneurship depending on matching approaches used, and reducing necessity entrepreneurship. Government policies should prioritize digitalization and digital entrepreneurship, lowering informality, bridging gender gap in digitalization, and closing access to credit gaps. The policies should incorporate components of micro-, small, and medium-sized enterprise sensitization on leveraging of technology.

Date: 2025
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DOI: 10.1080/26437015.2024.2415889

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