scholarly journals Effect of Mobile Banking on Financial Inclusion Among Commercial Banks in Kenya

2021 ◽  
Vol 2 (3) ◽  
pp. 184-197
Author(s):  
Harwood Kajirwa Isabwa
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Pearson Correlation ◽  
Primary Source ◽  
Secondary Data ◽  
Target Population ◽  
Financial Inclusion ◽  
Mobile Banking ◽  
Mobile Platforms ◽  
Study Results

Mobile banking is a precursor for the realization of financial inclusion among commercial banks in Kenya. The study's main objective was to determine the effect of mobile banking on financial inclusion among commercial banks in Kenya. The study adopted a positivism research philosophy. The study adopted an expo-facto research design because secondary data was the primary source data. The target population was 43 commercial banks in Kenya. The sample size was 39 commercial banks, but only ten commercial banks were selected because they had the best mobile banking apps. Inferential statistics adopted were; Pearson correlation and regression analysis. The study results revealed that mobile funds transfers significantly affect financial inclusion (β =1.697, p= 0.000). Cash withdrawals via mobile platforms significantly affect financial inclusion (β =1.195, p= 0.000). The study concluded that mobile banking has a significant effect on financial inclusion among commercial banks. In contrast, deposits via mobile platforms have a significant positive effect on financial inclusion (β =.354, p= 0.000). The study recommends that all financial institutions should adopt mobile banking as it helps to achieve financial inclusion. The banking sector should adopt the most appropriate mobile banking strategies to enhance financial inclusion.

scholarly journals Digital Banking and Financial Inclusion of Women Enterprises in Narok County, Kenya

2020 ◽  
Vol 2 (1) ◽  
pp. 28-41
Author(s):  
Kisotu David Melubo ◽  
Salome Musau
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Target Population ◽  
Online Banking ◽  
Financial Inclusion ◽  
Primary Data ◽  
Mobile Banking ◽  
Banking Services ◽  
Financial Exclusion ◽  
The Many

Financial inclusion is an important step in development, as access to finances can help the women to build money and lift themselves out of poverty. Lack of financial inclusion among women in Narok County is one of the many factors leading to financial exclusion and an introduction of digital banking is the remedy to its problems. Financial inclusion of women contributes immensely in empowering them. Digital banking in Kenya has been characterized by rapid technological change in the finance sector that has led to the development of mobile banking, online banking, ATMs and agency banking. The banking sector has undergone substantive transformation particularly from the year 2007. This study sought to establish the effects of digital banking and financial inclusion of Women Enterprises in Narok County, Kenya. Financial inclusion includes the provision of affordable financial services, which includes; access to payments and remittance facilities, savings, loans and insurance services by the formal financial system to those who tend to be excluded The study was anchored on finance growth theory and financial asymmetric theory. This study used descriptive research design and data was collected from the target population of all the 184 women owned enterprise in Narok County, Kenya. For this study census sampling was adopted to where all the population will be included in study since the number of target population is 184. Primary data was collected using a semi structured questionnaire to be administered to the women business owner through face to face interviews. The collected data was analysed using descriptive statistics methods; mean, mode, median, standard deviation, percentages and frequencies. Inferential statistical methods included multiple regression analysis was used to establish the relationship among variables. It was established that digital banking services significantly and positively influenced financial inclusion of women enterprises in Narok County. The study concluded that agency banking, mobile banking, online banking and ATM services significantly influenced the access and use of banking services by the locally based women enterprises in Narok County. It was further concluded that the women enterprises did not adequately use online banking due to limited literacy level, computer proficiency and internet availability. The study recommends that the available financial sector players in Narok County needs to sensitize SMEs especially women-owned to ensure that they are aware of the digital services available to be in the loop to enhance financial inclusion. The study recommends that the available digital banking providers need to improve formation of groups among the users of the services to enable improve usability. The study recommends further that the women enterprises managers and proprietors need to be in groups to develop each other and assist access, use and improve digital banking and financial inclusion.

scholarly journals Financial Inclusion, GDP and Credit Risk of Commercial Banks in Kenya

2018 ◽  
Vol 10 (3) ◽  
pp. 181 ◽  
Author(s):  
Salome Musau ◽  
Stephen Muathe ◽  
Lucy Mwangi
Keyword(s):  
Central Bank ◽  
Credit Risk ◽  
Commercial Banks ◽  
Secondary Data ◽  
Target Population ◽  
Financial Inclusion ◽  
Three Dimensions ◽  
Annual Reports ◽  
Annual Data ◽  
Trade Offs

This paper provides an empirical analysis of the synergies and trade-offs between financial inclusion and credit risk of commercial banks in Kenya. The paper analyzed the effect of financial inclusion on credit risk and the moderation effect of GDP on commercial banks in Kenya. Financial inclusion was measured using three dimensions of bank availability, bank accessibility and bank usage, while credit risk was represented by the non performing loans ratio. The study was anchored on financial intermediation theory supported by finance growth theory and asymmetry information theory. The target population was all the 43 commercial banks in Kenya. The study used secondary data collected from Central Bank of Kenya annual reports; commercial banks of Kenya published audited financial statements and annual data from Central Bureau of statistics of Kenya for the period between 2007-2015. Data was analyzed using descriptive statistics and panel multiple regression analysis. The results obtained found that bank availability, bank accessibility and bank usage had significant effect on credit risk of commercial banks in Kenya. GDP growth rate was found to partially moderate the relationship between financial inclusion and credit risk. From the findings the study concluded that financial inclusion has a significant effect on credit risk of commercial banks in Kenya. The study also recommended that commercial banks in Kenya to negotiate with Central Bank and the Ministry of Finance to put policies which support favorable macroeconomic variables especially GDP which influences the level of financial inclusion and bank credit risk.

scholarly journals Credit Information Sharing Practices and Financial Performance of Commercial Banks in Kenya

2019 ◽  
Vol 3 (VI) ◽  
pp. 67-82
Author(s):  
Felix Ouma Odhiambo ◽  
Fredrick Ndede
Keyword(s):  
Financial Performance ◽  
Information Sharing ◽  
Data Sharing ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Target Population ◽  
Primary Data ◽  
Loan Default

The banking sector in Kenya suffered increased non-performing credits which prompted collapse of certain banks with an upsurge of loan defaulters. This was mainly attributed to the continued information asymmetry in the industry because of absence of a credit data sharing component. Commercial banks in Kenya have continued to encounter a number of challenges in obtaining information on customers’ payment history that helps guide on determining their ability to access and re-pay loan advancements. This has made more commercial banks to subscribe to credit reference bureaus since its establishment in 2008. As a result, commercial banks in Kenya have been experiencing high rates of Non-Performing Loans advanced to customers. The general objective of the study was to determine the effect of credit information sharing practices on financial performance of commercial bank in Kenya. The study specific objectives were to determine the effect of information accuracy, volume of lending and customer credit reports on financial performance of commercial bank in Kenya. The study was anchored by adverse selection theory, moral hazard theory and asymmetry theory. The researcher used a descriptive research design. The target population was five banks within Nairobi County including KCB, Equity Bank, Family Bank, Cooperative Bank and Barclays Bank. Primary data was collected using questionnaires and secondary data using financial statements of the commercial banks performance for the past 5 years. Data was analysed using descriptive statistics and inferential statistics. The study found that information accuracy, volume of lending and customer credit reports were positively and significantly related to the financial performance of the commercial banks. The study concludes that information accuracy increases the banks ' understanding of the applicants’ features and allows a more precise forecast of their probabilities of repayment, it decreases the information rents that banks could otherwise obtain from their clients and it can function as a borrower discipline tool. Lending volume enhances business banks ' enhanced operations, which in turn leads to banks’ enhanced economic results. Sharing of credit information has made commercial banks grant more loans on the basis of their reputation to deserving clients, thereby improving their profitability. When extensive consumer credit history information are easily accessible, it considerably decreases the cost of entering loan markets for fresh lenders, enhances competition and lowers credit rates. The research recommends that for enhanced results, all financial institutions in Kenya need to protect the precision of their platforms for data sharing. Regular site visits should offer credibility to the precision of the borrowers’ data. The data supplied by CRB should be used efficiently by commercial banks to lend to prospective borrowers. Only borrowers with a strong history of credit should be permitted access to the loans. The research also proposes that Kenya's commercial banks should base credit awards on the borrowers’ reputational assets, ensuring that the loan default rate is small, thus enhancing commercial bank performance.

scholarly journals Financial Inclusion, Bank Competitiveness and Credit Risk of Commercial Banks in Kenya

2017 ◽  
Vol 9 (1) ◽  
pp. 203 ◽  
Author(s):  
Salome Musau ◽  
Stephen Muathe ◽  
Lucy Mwangi
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Secondary Data ◽  
Target Population ◽  
Financial Inclusion ◽  
Three Dimensions ◽  
Mediation Effect ◽  
Annual Reports ◽  
Annual Data ◽  
Trade Offs

This paper provides an empirical analysis of the synergies and trade-offs between financial inclusion and credit risk of commercial banks in Kenya. The paper analyzed the effect of financial inclusion on credit risk and the mediation effect of bank competitiveness of commercial banks in Kenya. Financial inclusion was measured using three dimensions of bank availability, bank accessibility and bank usage, bank competitiveness used (HHI) while credit risk was represented by the non performing loans ratio. The study was anchored on financial intermediation theory supported by finance growth theory and asymmetry information theory. The target population was all the 43 commercial banks in Kenya. The study used secondary data collected from Central Bank of Kenya annual reports; commercial banks of Kenya published audited financial statements and annual data from Central Bureau of statistics of Kenya for the period of 2007-2015. Data was analyzed using descriptive statistics and panel multiple regression analysis. The results obtained found that bank availability, bank accessibility and bank usage had significant effect on credit risk of commercial banks in Kenya. Bank competitiveness was found to partially mediate the relationship between financial inclusion and credit risk. From the findings the study concluded that financial inclusion has a significant effect on stability of commercial banks in Kenya. The study recommends that commercial banks to formulate policies to ensure they remain stable and competitive while accommodating their activities to ensure financial inclusion, hence forming an all inclusive and stable financial sector over time.

scholarly journals Technological Banking Innovations and Financial Inclusion by Commercial Banks in Nairobi County, Kenya

2020 ◽  
Vol 2 (1) ◽  
pp. 1-27
Author(s):  
Jeremiah Koori ◽  
Njoki Grace Wanjiku ◽  
Gerald Atheru
Keyword(s):  
Research Design ◽  
Commercial Banks ◽  
Secondary Data ◽  
Internet Banking ◽  
Business Environment ◽  
Financial Inclusion ◽  
Confirmatory Test ◽  
Mobile Banking ◽  
Electronic Banking ◽  
Study Objective

Financial inclusion is the provision of financial services at affordable costs to sections of underprivileged and low-income segments of society. Failure to constantly redesign strategies that help the commercial banks adapt to changing business environment may lead to a strategic mismatch between what they offer and what markets demands.  The study objective was to assess technological banking innovations and financial inclusion by commercial banks in Nairobi County Kenya. The study was anchored on the theory of financial intermediation, diffusion of innovation theory and Silber’s Constraint theory of Innovation. A descriptive research design and a positivism philosophy were used because the conceptual hypotheses were drawn from existing theories and identified knowledge gaps as founded on the research design. Multiple regression model was employed in this study. For the purpose of this investigation, the target population included all the 42 registered commercial banks operating in Nairobi County, Kenya in the year 2016. Purposive sampling technique was used to determine the sample size. Thirteen (13) selected banks that had successfully implemented technological banking innovations in Nairobi County were purposively sampled for the study. Both primary and secondary data was used in this study. Primary data was collected using questionnaires. Secondary data on mobile bank transactions and mobile phone subscriptions in the banks for the period between 2011 and 2016 was obtained from Central Bank of Kenya, Kenya National Bureau of Statistics and the Banking survey manuals. Questionnaires were administered to randomly selected respondents. The confirmatory test for multicollinearity was done using the Variance Inflation Factor. Data was analyzed using correlation, Goodness of Fit, analysis of variance, F statistic/significance of the study variables and regression of coefficients which were used to draw inferences on the relationship between the study variables. Data was presented using tables and figures. Results of the study indicated that the predictor variables; mobile banking, agency banking, electronic banking outlets and internet banking have an influence on financial inclusion. Correlation results also indicated that mobile banking, agency banking, electronic banking outlets and internet banking were positively associated with financial inclusion. Additionally, the regression findings indicated that mobile banking, agency banking and electronic banking outlets were statistically significant predictors of financial inclusion. However, Internet banking had a significance level of 0.586 which is higher than the conventional threshold of 0.05 which rendered the variable as statistically insignificant in prediction of financial inclusion. The findings concluded that mobile banking, agency banking, electronic banking outlets and internet banking have an influence on financial inclusion with the technological innovations being well adopted by the customers in the respective banks .The study recommended that the banks’ management should make use of these research findings to come up with innovative approaches of improving financial inclusion while maintaining the existing ones in the conduct of their business so as reach more clients with their products and services.

Cyber crimes in the banking sector: Case study of Vietnam

2020 ◽  
Vol 6 (05) ◽  
Author(s):  
LE Thanh Tam ◽  
Nguyen Minh Chau ◽  
Pham Ngoc Mai ◽  
Ngo Ha Phuong ◽  
Vu Khanh Huyen Tran
Keyword(s):  
Financial Literacy ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Legal Framework ◽  
Economic Sectors ◽  
Technological Revolution ◽  
Survey Results ◽  
Cyber Crimes

The technological revolution 4.0 brings great opportunities, but also cybercrimes to economic sectors, especially to banks. Using secondary data and survey results of 305 bank clients, the main findings of this paper are: (i) there are several types of cybercrimes in the banking sector; (ii) Vietnam is one of the top countries worldwide having hackers and being attacked by hackers, especially the banking sector. Three most common attacks are skimming, hacking and phishing. Number of cybercrime attacks in Vietnam are increasing rapidly over years; (iii) Vietnamese customers are very vulnerable to cybercrime in banking, as more than 58% seem to hear about cybercrimes, and how banks provide services to let them know about their transactions. However, more than 50% do not have any deep knowledge or any measures for preventing cybercrime; (iii) Customers believe in banks, but do not think that banks can deal with cybercrime issues well. They still feel traditional transactions are more secure than e-transactions; (iv) the reasons for high cybercrimes come from commercial banks (low management and human capacity), supporting environment (inadequate), legal framework (not yet strong and strict enough on cybercrimes), and clients (low level of financial literacy). Therefore, several solutions should be carried out, from all stakeholders, for improving the cybersecurity in Vietnamese banks. 

scholarly journals EFFECT OF CONSUMER PROTECTION FUNCTION ON FINANCIAL PERFORMANCE OF SACCOS IN KENYA

2016 ◽  
Vol 1 (2) ◽  
pp. 48
Author(s):  
Jackson Mnago Ndungo’ ◽  
Dr. Olweny Tobias ◽  
Dr. Memba Florence
Keyword(s):  
Correlation Analysis ◽  
Financial Performance ◽  
Consumer Protection ◽  
Causal Effect ◽  
Pearson Correlation ◽  
Secondary Data ◽  
Target Population ◽  
Descriptive Statistics ◽  
Accurate Information ◽  
Inferential Statistics

Purpose: The study sought to determine the effect of consumer protection function on financial performance of SACCOs in Kenya.Methodology: The study adopted a descriptive research design. The target population comprised of registered 181 deposit-taking SACCOs as at 31st December 2014 and the three licensed CRBs in Kenya. Stratified random sampling was used in the study, where SACCOs were grouped into five respective strata which were then randomly selected. The SACCOs were grouped into five respective strata of government based, teachers based, farmers based, private institutions based and community based. The study sampled 135 of the 181 (74.5%) licensed deposit taking SACCOs since these were the only licensed deposit-taking SACCOs by 2014. The choice of the licensed deposit taking SACCOs in Kenya was very objective since it was possible to obtain information that is representative of Kenya. In addition, SACCOs form the smaller arm in the financial sector and in most cases deals with a larger group of clients from the informal sector as opposed to other financial institutions like banks. Both primary and secondary data were analyzed using SPSS software, and statistics generated included descriptive statistics and inferential statistics. The particular descriptive statistics used included frequencies and percentages while the particular inferential statistics included Pearson correlation analysis and regression. Correlation analysis was used to establish relationships between the consumer protection function and financial performances. Regression analysis was used to establish the significance of the variables and the degree of causal effect of the independent variables on the dependent variable. The hypotheses testing were conducted using simple regression model.Findings: From the data analysis the study concluded that there was a significant and positive relationship between consumer protection function and financial performance thus the existence of credit reference bureaus was suitable for improving financial performance of SACCOs. This implies that that Credit reference bureaus have led to consumer protection and increased customers’ rights. Similarly, credit reference bureaus have led to assumption that borrowing is a right regardless of capabilities. Credit reference bureaus have reduces undesired monopolistic actions of lenders. Lastly, credit reference bureaus have led to reduced bad “culture” on loan repayment.Recommendation: The study recommended that lenders should ensure that they have accurate information before listing the unworthy borrowers to avoid unnecessary legal battles which may affect performance as a measure for customer rights protection.

scholarly journals The Effect of Branchless Banking Strategy on the Financial Performance of Commercial Banks in Kenya

2017 ◽  
Vol 8 (4) ◽  
pp. 167 ◽  
Author(s):  
Gift Kimonge Dzombo ◽  
James M. Kilika ◽  
James Maingi
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Exploratory Research ◽  
Electronic Banking ◽  
Economic Activities ◽  
Significance Level ◽  
Negative Effect ◽  
The Individual

The Banking sector acts as the life blood of modern trade and economic development. Commercial banks influence, facilitate and integrate the economic activities like resources mobilization, poverty elimination, production, and distribution of public finance. The financial performance of commercial banks has great implications in the financial sector and in the country at large, and will still remain an important subject of concern by all the stakeholders in the banking industry. In the last two decades, a lot of banking innovation has taken place in order to improve commercial banks financial performance. Branchless banking which involves the use of agency banking and electronic banking channels in the distribution of banking products and services is one such innovation. This study purpose was to evaluate the effect of branchless banking on the financial performance of commercial banks in Kenya. The specific objectives of the study were to analyze the individual effects of agency banking and electronic banking channels on the financial performance of commercial banks in Kenya and the combined effect of both agency and electronic banking on the financial performance of commercial banks in Kenya. The study adopted an exploratory research design. A survey of all the 42 licensed commercial banks in Kenya was done. Both primary and secondary data on branchless banking and financial performance of banks was obtained from the individual commercial banks, Central Bank of Kenya banking annual supervision reports respectively. Return on Assets (ROA) was used as the main indicator of commercial banks financial performance. The amount of investment in agency and electronic banking was used as indicator for agency and electronic banking. Data analysis was done using SPSS and STATA statistical softwares. Descriptive statistics, diagnostic tests and tests of hypothesis were done. Data was presented using tables and charts. Study findings indicated that when used in isolation; both agency and electronic banking had a significant negative effect on the financial performance of commercial banks at 5 percent significance level. However, when agency and electronic banking channels were used together as a multichannel strategy, they had a significant positive effect on bank’s financial performance at 5 percent significance level. The study recommends that for positive returns, commercial banks should invest in both agency and electronic banking as a multichannel strategy since these channels are complimentary to each other.

Effect of Agency Banking Operation on Profitability of Commercial Banks: A Case Of Selected Commercial Banks in Nairobi County

2017 ◽  
Vol 2 (1) ◽  
pp. 123
Author(s):  
David Mchembere ◽  
Dr A O Jagongo
Keyword(s):  
Performance Indicators ◽  
Commercial Banks ◽  
Regression Models ◽  
Economies Of Scale ◽  
Secondary Data ◽  
Study Finding ◽  
Target Population ◽  
Bank Profitability ◽  
Product Array ◽  
Number Of Customers

Purpose: The purpose of this study was to establish the effects of agency banking operation on profitability of commercial banks.Materials and methods: The research design used for this study was descriptive design. The target population will be all eleven commercial banks offering agency banking. The study will conduct a census for all the banks. Data will be collected by use  of a questionnaire and secondary data. Data will be analyzed mainly by use of descriptive and inferential statistics. Descriptive statistics will include mean and standard deviation. Data will also be presented by use of graphs, pie charts and tables.Multiple regression models will be useful to find out the virtual importance of each of the four variables.Results: From the study finding agency banking branch networking is negative and a statistically insignificant factor of bank profitability. Effect of agency banking withdrawal transaction  is positive and statistically significant. Agency banking deposit transactions is  statistically significant. Agency banking accounts opening services is also a statistically significant  factor, Commercial banks performance indicators is a statistically significant factor of bank profitability. It is possible to conclude that banks do obtain economies of scale and scope when they expand their activities, mainly by mergers and acquisitions. Therefore,expanded product array and potential for cross selling result from larger size and depth of product offering.Recommendations: The study recommends that for all the commercial banks to earn more profit they ought to increase the number of customers and for their businesses to grow further they have to invest more as well as embrace the adoption of market innovative strategies.The study also recommends that the banks should emphasize on cross-selling as they  can be useful marketing tools for banks to reach segments of the population that do not yet use traditional banking services.Key words: agency banking operation, profitability, commercial banks

scholarly journals Demographic Determinants of Access to Bank Credit

2020 ◽  
Vol 8 (5) ◽  
pp. 3272-3275
Keyword(s):  
Rural Areas ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Bank Credit ◽  
Urban District ◽  
General Belief ◽  
Policy Makers ◽  
Access To Credit ◽  
Study Results ◽  
Gender Education

The main objective of the paper is to study the determinants of access to bank credit, an important dimension of Financial Inclusion in India. For this purpose we studied if access to bank credit depends on district, gender, education and literacy. The data was collected from Jogulamba with lower literacy rate and Ranga Reddy a semi urban district in the Telangana. A semi structured questionnaire was prepared for the data collection. Regression analysis has been used to analyze the data for the study. Results show that access to credit for districts is significant which is contrary to general belief that in rural areas the credit from banking sector is less. Education is also significant and positive which implies that educated people prefer credit from banks compared to uneducated. This has important implication for policy makers to focus more on education and Financial Inclusion will follow.

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