An Empirical Investigation on The Effect of Mobile Banking Services on Financial Performance of Deposit-Taking SACCOS in Kenya

Abstract

The rapid advances in mobile technologies and the increased coverage of mobile networks present new opportunities for integrating mobile technology services into existing financial services delivery models as well as driving innovations leading to new financial solutions delivery channels. Most financial institutions have now embraced mobile banking services in order to address their financial challenges. Like their other financial institution's counterparts, Deposit-Taking Savings and Credit Cooperative Societies (SACCOs) have embraced mobile banking services to address efficiency challenges (characterized by poor information delivery channels and high operational costs) and to enhance their financial performance. However, the effect of mobile banking services on the financial performance of Deposit-Taking SACCOs has not been well studied. Even though some studies have indicated the potential of mobile banking services towards improving organizational performance, other studies have indicated the converse. Given these contradictions, this study sought to investigate the effect of mobile banking services on the financial performance of Deposit-Taking SACCOs in Kenya. Descriptive and explanatory research designs were adopted using a quantitative approach to data collection, analysis and reporting. Using simple random sampling, the study was based on a sample of 86 Deposit-Taking SACCOs drawn from a target population of 110 Deposit-Taking SACCOs that were licensed by SACCO Societies Regulatory Authority as at 31st December 2011.