Publication: Effect of Mobile Banking Technology on the Financial Performance of Deposit-Taking Microfinance Institutions in Kenya
Total Views 8
total viewsTotal Downloads 8
total downloadsDate
2022-10
Journal Title
Journal ISSN
Volume Title
Publisher
International Research Journal of Economics and Finance
Cite this Item
Abstract
The Microfinance institutions in Kenya have experienced turbulent times following the
collapse of many banks in the 1990s. In order to minimize their operational costs, these
institutions’ banks have adopted internet banking including ATMs, mobile banking, and
internet banking where customers can access their accounts on their personal computers. The
study’s main objective was; to assess the effect of Mobile Banking Technology on the
financial performance of Deposit-taking Microfinance Institutions in Kenya. The study was
guided by the conventional theory of financial deepening. The study targeted all Deposittaking microfinance institutions in Kenya that were in operation between 2016 and 2020. The
target population was 387 employees, who include: management and operations, Finance and
credit control, Internal and Risk, External Audit, ICT, and Litigation departments of the
Twelve Microfinance Institutions that were in operation in Kenya during the period of the
study 2016 and 2020. The sample size was 281. The researcher used purposive and stratified
Random sampling methods whereby, in a situation where there was only one unit of
observation, the entire population was involved in the study. The findings showed that the
micro-finance institutions used mobile banking technology in capturing data and that this has
reduced incidences of fraud in the banking sector. Further, the findings showed that mobile
banking technology played a major role in the microfinance subsector and the use of cybercrime risk identification mechanisms has reduced incidences of fraud. The study concludes
that there is a positive relationship between mobile banking and the financial performance of
financial institutions in Kenya. The study recommends that the management of microfinance
institutions should review the mobile banking systems continuously to identify loopholes in
the system that can be exploited by fraudsters.
Description
Keywords
Mobile banking technology, Financial performance, Microfinance institutions, Conventional theory.