THE EFFECTS OF FINTECH ON CREDIT PERFORMANCE TO SMES GROWTH IN KENYA A CASE STUDY IN NAIROBI COUNTY

Small and medium enterprise financing is imperative to economic growth and improving living standards of a country's population. Access to financial products, including savings, insurance, credit, and payment of services, has increasingly led to an improved financial performance by Small and Medium Enterprises. SMEs have proven vital and significant in their contribution to economic growth as they play pivotal roles in job creation and poverty reduction. Despite this, these business formations have registered a high failure rate due to a lack of access to financial services. With the advent of technological development and application in modern society, Financial Technology has immensely influenced the financial and business sectors with such products as mobile saving and lending. These have resulted in efficiency, enhanced accountability, and have given SMEs a new lease of life due to the emergence of financial technology companies, FinTech, which have complemented the banking sector and provided local access to financial services with reduced formalities. In Kenya, FinTech companies include Tala, Branch, Stawika, Timiza, Okash, and Pesapata, which use the Peer to Peer lending (P2P) model to pride short-term lending to SMEs. This study sought to determine the effect of FinTech companies on credit performance to SME growth in Starehe sub-county, Nairobi, Kenya with an aim to make policy recommendations for improvement. The study adopted credit access theory and used a descriptive survey design to achieve its objectives.