IMPACT OF MOBILE COMMERCE SERVICES ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA

IMPACT OF MOBILE COMMERCE SERVICES ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Over the last decade the world has become more digitalized and mobile. This digitalization brought about by the advancement in technology has affected all sectors of the economy which the small and medium enterprise sector is not an exception. As a result of this, business organisations world over have sought for ways of improving their business operations through improved technologies in order to serve their customers better. Consequently, the advent of Electronic commerce has assisted business organisations in achieving this desired goal. ECommerce refers to online transactions- buying and selling of goods and/or services over electronic medium especially the internet (Yeo & Huang 2003). It consists of all commercial transactions mediated by digital technologies such as landline telephone, electronic mails, mobile-phones and internet which takes place over electronic networks. As conceived by some schools of thought, Mobile-commerce is an extension of E-commerce to mobile phones. Therefore, M-commerce involves an emerging set of applications and services people can access from their Web enabled mobile devices (Sadeh, 2002). According to this definition, m-commerce represents a subset of all e- commerce, including both business-to-business and business to consumer. M- Commerce uses the internet for purchasing goods and services as well as sending and receiving messages using hand- held wireless devices. Some other schools of thought think it is another new channel after the internet, since Mobile phones itself provides an easier way to access the internet as it brings about flexibility and speed in its operations, thereby facilitating improvement in its operations leading to substantial cost savings as well as increased efficiency and competitiveness. Generally, mcommerce refers to any transaction with a monetary value that is conducted via a mobile 13 telecommunications network, thus enabling Wireless web applications users with Internet enabled cell- phones undertake and carry out several kinds of transactions. One of the fastest developments in mobile commerce has been made in Africa where the inadequate bank infrastructures have encouraged financial firms to make use of mobile phones rather than other E-commerce devices.

One of the major characteristics that made Mcommerce a major contender in the business world is its accessibility. It gives consumers the flexibility to access goods/services regardless of location or time, other characteristics include; convenience, ubiquity or immediacy, real time, context awareness and personalization (Boateng 2013); Today, the mobile Internet is emerging even faster because network providers, content partners, customers, and investors are leveraging lessons from e-commerce. Cellular carriers, both nationally and globally, have made significant advances to enable next generation data or wireless Web services and mobile commerce. M- Commerce is believed to be driving fundamental changes in the way business is conducted in many industries, particularly in telecommunications, information technology, media and financial services. As such, accessibility to the mobile phone is to both the poor and the rich. According to Lennart& Bjorn (2010), the fast diffusion of mobile money transfer was viewed as a potential key tool for facilitating financial transactions. This indicates that the rapid adoption of mobile phone was seen as a means of uplifting the financial functionality of Small and Medium Enterprises. Since some SMEs can be found in rural or remote areas, a positive aspect of mobile phone is that mobile networks can reach remote areas at low cost thereby making it possible for financial transactions to be made in a simple and faster manner from any point in so far as there are mobile money service provider which makes it easier to 14 transact at a lower cost as against the conventional electronic commerce which provides anytime services but seriously constrained by locational accessibility thereby, improving the performance of the SMEs.

The contribution of the SME sector to the development of the Nigerian economy cannot be over emphasised According to the United Nations Industrial Development Organization (UNIDO) report of 2012, SMEs have a significant role to play in economic development. They formed the backbone of the private sector; they make up over 90 per cent of entrepreneurs of the world and account for 50 to 60 per cent of employment generation. They also play an important role in poverty alleviation. In the words of Fashola (2013) “The SME sector in any nation is the main driving force behind job creation, export earnings, poverty reduction, wealth creation, income redistribution and reduction in income inequality.” SMEs contribute to a more efficient allocation of resources. They tend to adopt labour intensive method of production and support the development and diffusion of entrepreneurship spirit and skills and helps in reducing economic disparity between rural and urban centers. Nwosa and Oseni (2013) enunciated that the contributions of the SME sector to output growth and employment generation in United States and some Asian countries has helped in a long way in renewing the focus of economic planners and policy makers in Nigeria on the importance of the sector in aiding industrial growth and reducing the level of unemployment rate in the country. However, Alalade, Amusa and Adekunles (2013) maintained that SMEs whether starting ups or existing entities need capital either to be able to grow or expand operations. Capital can be in form of internally generated funds or external funds such as capital contributed of some types.

1.2 Statement of the Problem

According to figures made available by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) documented in the Survey Report on Micro Small and Medium Enterprises in Nigeria (MSMEs) 2013 declared 17 that Nigeria boasts of specifically, 17,284,678 registered Small and Medium Enterprises in which probably only 50 per cent of this number operates formally. Famously, SMEs have been acknowledged worldwide as the engine room of national economies, even in developed countries, the SME sector is one of the most critical sectors of the Nigerian economy. Ironically, it appears that considering the enormous potentials of the SMEs sector, and despite the acknowledgement of its immense contribution to sustainable economic development, its performance still falls below expectation in many developing countries (International Finance Corporation, 2014). This may be because the sector in developing countries has been bedeviled by several factors such as government policies and competition from Multi-National Corporations as militating against its performance thereby leading to an increase in the rate of SMEs failure.

SMEs are faced with the threat of failure with past statistics indicating that most SMEs die within their first five years of existence. Another smaller percentage go into extinction between the sixth and tenth year, thus only about five to ten percent of young companies survive, thrive and grow to maturity (Basil 2005). However, most empirical studies on impacts of mobile commerce services on SMEs performance have shown that studies in this area are scanty in Nigeria and have shown mixed findings for instance, Chogi (2006), Bangens&Soderberg (2008), Wambari (2009), Huang (2008), Donner &Escobari (2010)are foreign works conducted majorly in African countries on mobile commerce service usage,their studies used questionnaire to collect data from SMEs and it revealed positive and significant relationship with SMEs performance. Whereas in Nigeria, Okolo and Obidigbo (2014) examined the effect of mobile commerce on the performance of SMEs in Nigeria and how its performance can be boosted, their study adopted survival, asset size and access to credit as a proxy to measure SMEs performance, but the 18 study did not make use of sufficient test on their time series data. Consequently, Okolo, Ani&Ofoegbu (2014) in their study made use of mobile penetration internet penetration and lending rate as their independent variable which the current study adopted but the study was conducted on economic growth as against SMEs performance considered for the current study.

Format: MS Word

Chapters: 1 - 5, Preliminary Pages, Abstract, References
Delivery: Email

No. of Pages: 120

NB: The Complete Thesis is well written and ready to use. 

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