THE Effect of Digital Payments on Financial Performance of Mutual Funds in Kenya

Abstract

Purpose: Mutual funds in Kenya play an integral role in economic development, especially towards the realization of Vision 2030 on financial stability which is anchored on the economic pillar that emphasizes wealth creation opportunities for all. It provides a platform for professional asset management which offers investors the advantage of wealth creation at affordable levels of asset ownership by utilizing unit trust through portfolio diversification. Digital processing of payments offers a professional way of wealth management.

Design/Methodology/Approach: Technology acceptance model was used. Mixed research design combining descriptive and panel design with both primary and secondary data was utilized. Descriptive statistics, correlation, and multiple regression techniques were used guided by the pragmatic philosophy.

Findings: Major findings indicate a positive effect of digital payments on performance of mutual funds. Fund size has a moderating effect on the relationship between digital payments and fund performance. The study concluded that digital payments is a key enabler of mutual fund performance in Kenya, particularly when adopted strategically and scaled effectively according to fund size.

Implications/Originality/Value: Its concluded that digital payments enhances fund performance. The study contributes to the growing body of knowledge on financial technology adoption in emerging markets.