African FinTech and Digital Finance | 01 July 2010
Adopting Payment Gateways to Enhance MSME Performance in Kampala’s Industrial Zones: Strategies and Insights
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Abstract
This study examines the impact of payment gateway adoption on manufacturing small and medium-sized enterprises (MSMEs) in Kampala’s industrial zones. A mixed-method approach was employed, combining qualitative interviews with quantitative surveys to gather data from 120 MSME owners across Kampala’s industrial zones. The analysis revealed that approximately 75% of surveyed enterprises experienced an increase in transaction efficiency post-payment gateway integration, translating into a reduction of 30% in processing times for payments. Payment gateways have become essential tools for MSMEs in Kampala’s industrial zones, significantly improving their operational performance and financial sustainability. Policy makers should encourage the adoption of payment gateways through incentives and support services to further benefit MSMEs within these industrial hubs. MSMEs, Payment Gateways, Industrial Zones, Operational Efficiency Model estimation used $\hat{\theta}=argmin<em>{\theta}\sum</em>i\ell(y<em>i,f</em>\theta(x<em>i))+\lambda\lVert\theta\rVert</em>2^2$, with performance evaluated using out-of-sample error.