Mobile banking as a strategic means of financial inclusion in Kenya

Abstract

Financial inclusion is an important priority in the development programs of Kenya and other countries across the world due to its ability to ensure all bankable citizens in a country get to participate in main financial drive towards the economic development of the countries from the financial perspective. This study was, therefore, designed with the objective of establishing effectiveness of mobile banking as a strategy of financial inclusion in Kenya. The specific objectives were: to determine the effect of mobile banking strategy on the access to financial services; to establish how mobile banking strategy contributes to the usage of financial services and to establish how mobile banking strategy contributes to the quality of financial services. This study was a survey that focused on the 30 commercial banks in Kenya that had adopted mobile banking. The primary data used for the study was collected by a self-administered questionnaire. the data were analyzed using mean and standard deviation. The findings indicate that mobile telephony has improved the access to commercial banking financial services by customers. This is seen through improved awareness of all the products they can access by mobile devices; increased frequency of access to accounts, the twenty-four-hour access to accounts, the cheapness of the use of mobile banking and the increase in the number of clients with informal accounts managed through mobile devices. The use of mobile devices has improved usage of financial services provided by commercial banks. For instance, most clients now check their financial statements using mobile devices; the use of mobile banking is more preferred to traditional banking; the variety of banking services provided through mobile banking has widened. Now most banking services can be accessed by mobile banking. Mobile baking has improved the quality of services provided by commercial banks. This is seen through improved willingness and readiness of employees to provide services in an effective manner. It is also seen through the high levels of customers’ awareness of the banking services available to them through mobile banking. Customers are increasingly trusting the use of mobile banking to conduct transactions and banks now better understand the needs of the customers. The study recommends that the use of mobile banking should be widened in intensity of use to enable customers to have more freedom and frequency in accessing the services provided by commercial banks through mobile banking. There should be widening of the segments of the clients that have access to financial services and the percentage of customers using mobile banking vis-à-vis traditional banking. Using mobile banking for lending and the frequency of accessing financial services should be strengthen.