AN ASSEMENT ON HOW MOBILE MONEY USAGE AFFECTS THE PERFORMANCE OF SMALL SCALE BUSINESSES IN LILONGWE AREA 25 SUNGWI

This study assesses how the use of mobile money affects the performance of small-scale businesses in Area 25, Sungwi, in Lilongwe District. In recent years, mobile money services have grown rapidly in Malawi and have significantly changed the way financial transactions are conducted. This growth has been particularly important for small-scale businesses, which often experience difficulties in accessing formal banking services due to high costs, strict requirements, and limited availability of banks. As a result, many small business owners rely on mobile money as an alternative financial service to manage their daily business operations.

The main aim of the study is to examine the extent to which small-scale businesses in Area 25 have adopted mobile money services and to assess how this adoption influences their overall business performance. Specifically, the study seeks to identify the benefits and challenges associated with the use of mobile money and to evaluate its impact on key business performance indicators such as sales growth, profitability, customer satisfaction, and operational efficiency. By focusing on these indicators, the study provides a clear understanding of how mobile money contributes to business success and sustainability among small-scale enterprises.

A descriptive research design was employed in this study, using a quantitative research approach. Data were collected from small-scale business owners operating in Area 25, Sungwi, through structured questionnaires. The questionnaires were designed to gather information on the level of mobile money usage, types of transactions conducted, perceived benefits, challenges faced, and the overall effect of mobile money on business performance. The collected data were analyzed to identify patterns and relationships between mobile money usage and business outcomes.

The findings of the study reveal that mobile money usage has a positive influence on the performance of small-scale businesses in the study area. Most respondents reported that mobile money has made business transactions faster and more convenient, improved cash flow management, and reduced risks associated with carrying and handling physical cash. Additionally, mobile money has helped businesses expand their customer base by allowing customers to make payments easily, even when cash is not available. These improvements have contributed to increased sales, better profitability, higher customer satisfaction, and improved operational efficiency.

However, despite the positive effects, the study also identified several challenges associated with mobile money usage. These include high transaction costs, frequent network failures, delayed transactions, and limited digital and financial literacy among some business owners. Such challenges sometimes reduce the effectiveness of mobile money services and discourage full adoption among small-scale enterprises.

The study concludes that mobile money services play a significant role in enhancing the performance of small-scale businesses in Area 25, Sungwi. It recommends that mobile money service providers, government institutions, and other relevant stakeholders should promote financial and digital literacy training for small business owners, improve network reliability, and introduce supportive policies that reduce transaction costs. These measures would help maximize the benefits of mobile money and strengthen the growth and sustainability of small-scale businesses in Malawi.