Factors influencing adoption of mobile phone financial services by informal women’s savings groups in Kisumu central sub-county

Abstract

Informal finance is a widely accepted phenomenon in Kenya with individuals increasingly joining and participating in informal savings groups. Kisumu has the second highest composition of informal savings groups at 35.1%. The use of informal savings provide both economic and social benefits to its members but also have inefficiencies which can best be reduced through the use of mobile phone technology especially by adopting mobile financial services. The main challenge is the level of adoption of these services in the informal savings groups as well as the realization of their greater effect on the overall performance. The aim of this study was to establish the factors influencing adoption of mobile phone financial services among informal women’s savings groups in Kisumu central sub county. The specific objectives of the study were to assess how socio-demographic factors influence adoption of mobile money services among women informal savings groups in Kisumu central sub county, to examine the extent to which perceived usefulness and ease of use of MFS influences its adoption of among informal women’s saving groups in Kisumu central sub county, to evaluate the extent to which personal innovativeness influences its adoption and to investigate the influence of perceived risk on the adoption of MFS by informal women’s savings groups in Kisumu Central sub county. The study adopted descriptive research design because this design allowed the researcher to collect data from the respondents and make inferences from this information. The target population of this study comprised of all informal women’s savings groups in Kisumu Central Sub County. Snowball sampling technique was used to get the required sample of 24 informal women’s savings groups and purposive sampling done to select the respondents including the three top officials including the chairperson, treasurer and secretary in each group and two group members randomly sampled in each group thus getting 120 respondents. Primary data was collected using semi structured questionnaires containing both closed and open ended questions to allow variety. To ensure reliability test retest technique was used. The quantitative data was analyzed using descriptive statistics then presented in tables of frequencies and percentages. Findings of the study revealed that perceived usefulness and ease of use as well personal innovativeness had a positive influence on the adoption of MFS due to the ease of language used, it requires minimum mental effort to use the service, the convenience and accessibility of the service to the respondents. Perceived risk had a negative influence on the adoption of MFS with majority fearing loss of funds due to network failures and system malfunctions.The study recommends that mobile network operators to enhance security measures that will protect funds from losses.They should carry out a countrywide campaign to allay fears of security/safety issues regarding mobile financial services. The study also recommends that the government, the relevant policy makers should improve the policies governing the industry and use of ICT in financial services for quality of their services to the informal women savings groups to minimize the problems that they encounter using the service.