Financial Technology and Financial Inclusion of Small and Medium Enterprises in Kenya: Do Government Regulations Really Matter?

The study sought to evaluate the significance of government regulations on the relationship between financial technology and financial inclusion of Small and Medium Enterprises in Kenya. This study emanates from the Doctoral dissertation of the first author where the co-authors served as supervisors. Technology, Organization and Environment Theory and Financial Intermediation Theory were utilized. The study adopted explanatory research design. The top 100 Small Medium Enterprises in Kenya constitute the target population and the sample size was 200 based on purposive sampling technique and simple random sampling where two respondents were picked from each Small Medium Enterprises of interest. A response rate of 81.5 percent was achieved. The study used multiple regression analysis and it was established that government regulations had significant moderation effect on the relationship between financial technology and financial inclusion of small and medium enterprises in Kenya. The study recommends that the existing transaction limits should be reviewed in line with economic conditions of the country. Government should ensure that favorable lending rates are put in place so as to further enhance the level of financial inclusion of small and medium enterprises in Kenya. Government guidelines on screening of customers should be favorable to business owners and stringent requirements should be discouraged. Keywords: Government Regulations, Financial Technology, Financial Inclusion, Small and Medium Enterprises