DIGITAL PAYMENT SYSTEMS AND FINANCIAL MANAGEMENT EFFICIENCY IN PRIVATE PRIMARY AND JUNIOR SCHOOLS IN NYAMIRA COUNTY, KENYA

Authors: Mr Benecha Nyaberi Joshua & Dr Titus M. Mweta

ABSTRACT

Private primary and junior schools must manage fee collection, financial records, budgeting, reporting and control of school funds while maintaining financial sustainability. Digital payment systems offer opportunities to reduce cash-handling risks, improve transaction records and support timely financial information. This study evaluated the influence of digital payment systems on financial management efficiency in private primary and junior schools in Nyamira County, Kenya. Guided by the Technology Acceptance Model, the Resource-Based View and Diffusion of Innovations Theory, the study adopted a positivist, quantitative descriptive-correlational cross-sectional design. Data were collected using a structured five-point Likert questionnaire administered to proprietors, head teachers, deputy principals, bursars and senior administrative officers. Of 264 questionnaires issued, 254 were returned from 136 schools, representing a response rate of 96.2%. The analysis used descriptive statistics, Pearson correlation and simple linear regression. Digital payment systems recorded a composite mean of 3.83 (SD = 0.93), and approximately 87.0% of respondents indicated that their schools used M-Pesa or another digital platform for fee collection. Financial management efficiency recorded a composite mean of 3.20 (SD = 0.71). Digital payment systems had a positive and statistically significant relationship with financial management efficiency (r = .31, p < .001). The regression model was statistically significant, F(1, 250) = 26.55, p < .001, and explained 9.6% of the variation in financial management efficiency (R² = .096). The standardised regression coefficient was β = .310 (p < .001). The findings indicate that digital payments are associated with improved financial management, although digital fee collection alone does not guarantee effective budgeting, reporting and financial control. The study recommends that schools integrate payment platform statements with accounting records, strengthen reconciliation and arrears monitoring, and train finance personnel in the use of digital financial information.

Keywords: digital payment systems; financial management efficiency; fee collection; mobile money; private schools; Nyamira County; Kenya.

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