Financial Technology Adoption and SME Access to Financial Services: Insights from Tabora Municipality, Tanzania

Abstract

This study examined the adoption of Financial Technology (FinTech) and its influence on small and medium-sized enterprises’ (SMEs) access to financial services in Tabora Municipality, Tanzania. Guided by the pragmatist paradigm, it employed a convergent parallel mixed-methods case study design that integrated quantitative and qualitative approaches. The study involved 206 respondents selected from 425 micro and small enterprises using stratified, simple random, and purposive sampling techniques. Data were collected through questionnaires and semi-structured interviews. Quantitative data were analysed using descriptive statistics, Pearson correlation, and multiple linear regression, while qualitative data were analysed thematically in NVivo. The study assessed six dimensions of FinTech adoption: mobile money, digital lending, online banking, payment applications, trust in digital platforms, and frequency of digital transactions. Findings revealed that all six dimensions were positively and statistically significantly associated with SMEs’ access to financial services. Findings also showed that convenience, speed, reliability, and trust drove adoption, while usability challenges, hidden transaction costs, and cash preferences constrained digital engagement. The study concludes that FinTech adoption is a critical enabler
of financial inclusion among SMEs in Tabora Municipality. It recommends enhancing digital literacy, strengthening platform security and trust, improving service usability, and promoting transparent pricing mechanisms to increase adoption and expand access to financial services.