MOBILE BANKING AND FINANCIAL PERFORMANCE OF SELECTED COMMERCIAL BANKS IN KENYA

Ong‘era Sarah Bochaberi, Dr. Omagwa Job

Abstract


Despite the importance of financial inclusion in developing economies, financial inclusion is still experiencing a slow growth. Commercial banks have adopted mobile banking to increase customer deposits, opening of accounts and deposit and withdrawal transactions. Since mobile banking transactions cost far less than transactions at the branch teller, banks can make a profit handling even small money transfers and payments. However, despite the adoption of mobile banking in commercial banks, the performance of banks has been declining. The study sought to examine the role of mobile banking on performance of commercial banks. The study was conducted in the month of July, 2016 and focused on selected commercial banks, that is, Equity bank Kenya limited, Co-operative bank of Kenya limited, KCB bank Kenya Limited and Family bank Kenya limited. The researcher used descriptive research design. The study adopted purposive sampling whereby respondents targeted provided the information that was required. The study used both primary and secondary data. Primary data was collected using a questionnaire, while secondary data was collected from the audited financial statements for over a period of 5 years (2011-2015). Statistical Package for Social Sciences (SPSS) version 22) was used for purposes of analysis. Data was analyzed using descriptive statistics (Means, percentages and standard deviation) as well as regression analysis. The study found that mobile banking influences the financial performance of the four commercial banks in Kenya. The study also found that mobile banking is reliable to customers, enables the bank to reach the most unbanked people, is safe and affordable, it is efficient and increases the number of transactions in commercial banks. Therefore, commercial banks should adopt mobile banking as a way of increasing number of transactions, reducing cost of service delivery and hence improve on their profitability and revenue. The study recommends that policy makers should consider mobile banking in their formulation of policies because of the technological developments and the expected switch from physical branch networks to technologically supported banking services.

Key Words: Mobile Banking, Financial Performance, Commercial Banks


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References


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