As smart phone penetration continues to increase, so do consumer expectations. Effects of mobile banking on the financial performance of commercial banks in kapsabet kenya. Mobile financial services consumer financial protection. Mobile money mobile phone financial services or simply mobile money offered by mno mtp kenya vision 2030 medium term plan nassep national sample survey and evaluation programme. Tavneet suri is an associate professor of applied economics at the mit sloan school of management. 2 1 f ederal r eserve s ystem, c onsumers and m obile inancial ervices 2015 12 m arch 2015 hereinafter frb. It improves the convenience of banking services, consumers control over inances, and in some cases the afordability of banking services. It has since expanded to afghanistan, south africa, india and in 2014 to romania and in 2015 to albania. Mobile banking helps meet consumer needs in areas where tradiional banking is perceived to be weak. The impact of mobile banking on financial performance of. E40,o16,o33 abstract mpesa is a mobile phone based money transfer system in kenya which grew at a blistering pace following its inception in 2007.
Factors influencing the adoption of mobile banking in kenyas. Financial establishments in kenya have adopted mobile services i. Opportunities for mobile federal deposit insurance. It is worth noting that the term mobile banking is. The study recommends that the policy makers take mobile banking awareness creation into consideration when drafting policies on the operations of banks in kenya. Mpesa m for mobile, pesa is swahili for money is a mobile phonebased money transfer service, payments and microfinancing service, launched in 2007 by vodafone group plc and safaricom, the largest mobile network operator in kenya.
Mobile phone banking mobile phonebased banking services and products by commercial banks such as timiza, hf whizz, mcoop cash, mshwari, eazzy loan, and tkash. Rapid development of information technology has made banking tasks more efficient and cheaper. Mpesa m for mobile, pesa is swahili for money is a mobile phonebased money transfer, financing and microfinancing service, launched in 2007 by vodafone for safaricom and vodacom, the largest mobile network operators in kenya and tanzania. This study sought to determine the impact of mobile and internetbanking on performance of financial institutions in kenya where the survey was conducted on financial institutions in nairobi. This is is true in kenya since e banking in kenya is still developing thus the focus of most banks is on setting up the systems giving less attention to the industry technical issues. The study analyzed the mobile banking mbanking system coverage for financial inclusion in tanzania, the case study of coast region at kibaha district council. Mobile banking to provide crucial banking services. This was because of the indirect relationship of mobile banking and financial performance. Objectives of the study were to analyze coverage of m banking for financial inclusion, the usage behavior of mobile subscribers to m banking services, understand the extent. From the regression model of 5 years the study found evidence of positive relationship between mobile banking and bank performance. Despite the numerous economic challenges that have been witnessed within the sector, the industry remains strong and vibrant. It would therefore be informative to analyze the impact of mobile banking, specifically mpesa to the society in kenya and understand perceptions. Nov 14, 2016 rosengard believes kenya has struck on a promising solution.
There are four mobile money providers in kenya, but one dominates currently the mobile money market in kenya is dominated by one major player, safaricoms mpesa. Objectives of the study were to analyze coverage of mbanking for financial inclusion, the usage behavior of mobile subscribers to mbanking services, understand the extent. The second specific objective sought to establish the effects of perceived impact of cost on adoption of mobile banking. Effects of mobile banking on the financial performance of. As this report highlights, the industry has now reached a major milestone. To access the services, a member must fill and submit the mobile banking application form. Rosengard believes kenya has struck on a promising solution. According to ngugi 20, banking over the internet an example of digital banking has attracted. The impact of mpesa in kenya isaac mbiti and david n. At the moment, three banks have been placed under receivership with only one having recovered and back to operations. Unlike the related internet banking it uses software, usually called an app, provided by the financial institution for the purpose.
Money mobile money state of the industry report on mobile. It is at the hub of the customer relationship and is quickly becoming a point of differentiation and is already a source of revenue for progressive banks. You agree to take every precaution to ensure the safety, security and integrity of your account and transactions when using mobile banking. Kcb kenya commercial bank mobef mobile banking evaluation framework nic nic bank kenya plc, pin personal identification number roa return on assets roe return on equity sme small and medium enterprises sms short message services ssa subsahara africa. Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Thus there is a need to manage costs and risks associated with internet banking. Other aspects of kenyas private sector environment that has helped in the expansion of the mobile phone market and mobile banking include an increasingly efficient tax system and a stable legal.
Mobile phone ownership is estimated from finaccess 2016 data. The specific objectives were to establish the effect of mobile banking transactions volume and mobile banking products on the financial performance of commercial banks. Although mbanking is a profitable retailbanking product and has been the cornerstone of. Factors influencing the adoption of mobile banking in. This informed who, how and what about the mobile banking in commercial banks in kenya and as a onetime event. It would therefore be informative to analyze the impact of mobile banking, specifically mpesa to the society in kenya and understand perceptions about mobile banking among users and nonusers.
At jpal, she is scientific director for africa, cochair for the agriculture sector and of the agricultural technology adoption initiative and chair of the digital identification and finance initiative. According to aljabri 2015, it has been seen that over the past few years that the. Cross sectional descriptive survey was employed in this case. This study was guided by the following specific objectives. With more money mobile accounts than traditional bank accounts, financial inclusion has significantly improved in subsaharan africa 0 50 100 150 200 250 300 dec 2011 dec 2010 dec 2008 dec 2009 dec 2007 dec 2012 dec 2014 dec 20 dec 2016 dec 2015 millions source. A further feature of mobile banking is the way in which it facilitates the development of relations of trust where previously there was no basis for it.
At jpal, she is scientific director for africa, cochair for the agriculture sector and of the agricultural technology adoption initiative and chair of the digital identification and finance initiative her research focuses on the adoption. Mobile money operators typically leverage an agent network to. Effects of internet banking on the financial performance. Money mobile money state of the industry report on. In particular, mobile banking provides an instantaneous and traceable record of transactions that were otherwise anonymous and unverifiable through cash. In general, mobile money is a term describing electronic financial services performed via a mobile phone. Mobile banking allows members to transact remotely using their mobile phone. Determinants of mobile banking adoption in the ghanaian. It has since expanded to tanzania, mozambique, drc, lesotho, ghana, egypt, afghanistan, south africa, india, romania, and albania. There is a risk that an it failure could interrupt services, preventing access to mobile banking, limiting customers access to their money and undermining consumer confidence in these services. Digital banking commonly referred to as electronic banking or simply ebanking is the use of electronic and telecommunication networks to deliver a wide range of value added products and services to bank customers steven, 2002. Overview the topic of mobile banking is hot in africa kenya, sierra leone, south africa, ghana, nigeria, and all 21 mtn countries are moving deliberately, if not cautiously, to ensure their people are not left out kenyan govt. Mobile banking has moved quickly beyond being simply online banking using a smart phone. Effects of internet banking on the financial performance of.
Oct 16, 2009 other aspects of kenyas private sector environment that has helped in the expansion of the mobile phone market and mobile banking include an increasingly efficient tax system and a stable legal. The study analyzed the mobile banking m banking system coverage for financial inclusion in tanzania, the case study of coast region at kibaha district council. Mobile banking in kenya is still at its early stages with a limited number of providers that are operational. Pdf mpesa is a mobile phone based money transfer system in kenya which grew at a blistering pace following its inception in 2007. The main objective of the study is to examine the determinants of mobile banking adoption as a communication in the banking industry with specific emphasis on the access bank ghana limited. Mobile banking and financial inclusion the world bank. Not only did safaricom launch the first service, in 2007, but it still dominates the field, with an estimated 99% market share of all mobile money transactions in kenya. You agree not to leave your device unattended while logged into mobile banking and to log off immediately at the completion of each access by. Mobile banking activity is highest in africa, led by nigeria, south africa and kenya which has the reputation for being the worlds mobile money pacesetter with mpesa. The study concludes that cost was a key factor stopping people from adopting mobile banking. Usage experiences in kenya by adrian d kamotho njenga lecturer of information systems, catholic university of eastern africa email. This is is true in kenya since ebanking in kenya is still developing thus the focus of most banks is on setting up the systems giving less attention to the industry technical issues. Paying for a taxi ride using your mobile phone is easier in nairobi than it is in new york, thanks to kenyas worldleading mobilemoney system, mpesa.
The economist explains why does kenya lead the world in. Although m banking is a profitable retail banking product and has been the cornerstone of. Research questions the following research question guided the study. The study results show that mobile banking has a moderate influence on profitability of commercial banks in kenya. How mobile banking is transforming africa huffpost.
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