Digital Financial Transactions and Business Performance: The Role of Mobile Money in Ghana’s SME Sector: Evidence from the Sunyani Municipality

Abstract

This study examines the role of mobile money (MM) transactions in enhancing the performance of small and medium enterprises (SMEs) in the Sunyani Municipality, Ghana. While previous studies have explored the impact of mobile money on various aspects of economic development, limited research has specifically examined its direct impact on SME performance in the Ghanaian context.   A purposive sampling technique was employed to select 120 SMEs from various sectors, including retail, electronics, and services. Data collected through structured questionnaires were analyzed using Statistical Package for Social Sciences (SPSS) version 20 and STATA version 13, focusing on key variables such as sales revenue, frequency of mobile money transactions, and business characteristics. The results reveal a significant positive relationship between the frequency of MM transactions and sales revenue (r = 0.45). Specifically, for each additional MM transaction, sales revenue increased by GHC 500, and for every additional GHC transacted, sales revenue increased by GHC 1.50. The amount transacted via MM showed a stronger correlation with sales revenue (r = 0.60), emphasizing that higher transaction volumes drive business growth. While business age and workforce size positively impacted revenue, their influence was weaker compared to MM usage. The regression analysis further confirmed the critical role of mobile money, with MM transaction frequency and amount being the most significant predictors of sales revenue. The findings suggest that wider adoption of mobile money services could enhance operational efficiency, expand market reach, and improve financial performance, positioning MM as a key driver of SME growth in emerging markets. This study contributes to the growing body of literature on digital financial inclusion and business development, offering practical insights for policymakers and SME owners. The study covers only SMEs in Sunyani Municipality, and thus results may be limited to the generalization to other regions with different socio-economic characteristics. Based on the findings, the study recommends that promotion of the use of mobile money by SMEs be stepped up through targeted financial literacy and awareness creation directed at explaining the utility and profitability of the instrument.