Thesis:

Influence of Mpesa link business model on financial Performance of commercial banks in Kenya

M-Pesa is a mobile phone based money transfer system in Kenya which grew at a blistering pace following its inception in 2007. It is a financial innovation which has been a key feature in the banking sector based on the high levels of innovations and use of modern technologies in the day to day operations. The need to meet customer demands and enhance competitiveness in the dynamic markets, has been akey driver to adoption of modern technologies in the banking sectors to keep up with all these trends. This study aimed to assess how M-Pesa linkage business model impacts financial performance of commercial banks in Kenya. The study specific objectives were; To establish how Mpesalink create value addition; determine the impact of Mpesalink on quality of resources; to evaluate the impact of M pesalink on adaptability by the commercial banks and to find out the impact of Mpesalink on imitability on performance of commercial banks in Kenya. The study was guided by Schumpeter theory of Innovation, Innovation Diffusion Theory and Transaction Cost Innovation theory. The study used a descriptive statistic in its methodology. This study used primary data. Data collection was through use of structured questionnaires. The study population were the senior, middle and low level management from a total of 42 commercial banks in Kenya. The questionnaires were issued through drop and pick method, coded, keyed and were analyzed using both descriptive and regression analysis. The regression model had four variables that is value creation, quality of resources, imitability and adaptability were the dependent variables while financial performance of commercial banks were the independent variable. As evidenced by the high mean values of the responses, which were above 3.585, the study's findings showed that the majority of Kenyan commercial banks had realigned their business models by using Mpesa Link's value creation feature to realign their processes. This has increased the banks' market share and customer satisfaction levels. The quality of resources was found to have had a significant impact on business model realignment. This was demonstrated by a mean value of 4.29, which showed that the adoption of MPesaLink innovations had significantly improved the quality of resources provided by Kenyan commercial banks. A mean score of 4.18 indicates that MPesaLink, adaptability, had a significant impact on the business mode realignment of Kenyan commercial banks. MPesaLink's adoption, which has enhanced consumer benefits, timely service delivery, and efficient service delivery. According to the responses, commercial banks in Kenya have been able to realign their business models to a moderate degree because they can provide highly distinctive products that their rivals cannot copy, they can endure over the long term, and they can also achieve consistent profitability. In order to reap the benefits of using MPesaLink as a financial tool to improve financial performance, the study suggests that commercial banks enlighten their clients about its use. Future research should examine additional financial breakthroughs and their impact on the realignment and comparison of company models in relation to this study.