Adoption of mobile banking services by Nairobi county Saccos

Abstract

Mobile money providers have partnered with commercial banks in Kenya to offer mobile based financial products that aim to reach the unbanked. However, as compared to commercial banks in Kenya, the penetration of M-banking in SACCOs (Savings and Credit Cooperative Organizations) has been very slow. The purpose of this study was to assess the adoption of mobile banking services by Nairobi County SACCOs. The study was also seeking to find out mobile banking services that can be offered through mobile banking; to determine the factors that influence adoption of Mobile Banking in Sacco’s in Kenya; and to develop a model that can be used to evaluate mobile banking adoption. This study used a descriptive research design. In this study, the target population was all the 44 SACCOs operating FOSA (Front Office Savings Activity) services in Nairobi County. The study made use of primary data and targeted 3 respondents in each SACCO. 10 SACCOs responded to the study. Semi structured questionnaires were used to collect primary data. Data analysis was quantitative as well as qualitative. Descriptive statistics such as frequency distribution, percentages, measures of central tendencies (mean) and measures of dispersion (standard deviation) were utilized to analyze quantitative data. The findings were then presented in tables and graphs. On the other hand, qualitative data was coded thematically and was analyzed by use of thematic content analysis. The results were then presented in a prose form. This study used factor analysis to identify underlying factors and to screen the variables. Inferential statistics such as ANOVA and multivariate regression analysis were used to test the association between the independent and the dependent variables. The study found that SACCOs in Nairobi County had adopted mobile banking and were offering services such as requesting mini statements, checking account balance, cash withdrawals, buying airtime, loan repayments, paying Bills (Paybill), cash deposits, money transfer, loan applications services and buying SACCO shares, selling SACCO Shares, opening accounts and ATM Card Pin Change services on mobile banking platforms. The study also found that perceived benefits, external environmental factors, organization readiness and security perceptions influence the adoption of mobile banking positively and significantly. The study recommends that SACCOs should create awareness to the members on the perceived benefits of using mobile banking, which include convenience, accessibility and affordability. The top management of SACCOs should show support and campaign for the adoption of mobile banking so as to reduce resistance to change.