FACTORS AFFECTING MOBILE BANKING ADOPTION:

A CASE OF KCB BANK KENYA

BY

ALBERTINA SACHOMBE

UNITED STATES INTERNATIONAL UNIVERSITY

AFRICA

SPRING 2017

FACTORS AFFECTING MOBILE BANKING ADOPTION:

A CASE OF KENYA COMMERCIAL BANK

BY

ALBERTINA SACHOMBE

A Research Project Rep0rt Submitted to the Chandaria School of

Business in Partial Fulfillment of the Requirement for the Degree of

Masters in Business Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY

AFRICA

SPRING 2017

ii

STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to any

other college, institution, or university other than the United States International

University in Nairobi for academic credit.

Signed: ________________________ Date: ______________________

Albertina Sachombe (ID No: 646290)

This project has been presented for examination with my approval as the appointed

supervisor.

Signed: ________________________ Date: ______________________

Mr. Kepha Oyaro

Signed: ________________________ Date: ______________________

Dean, Chandaria School of Business

iii

ACKNOWLEDGEMENT

First and foremost, I would to give thanks to the almighty for enabling me see through

this process. I would also like to thank my business research method supervisor Dr.

George Kaol and my final project supervisor Mr. Kepha Oyaro for their guidance and

advice that has motivated me to complete this project report.

My special thanks go to the marketing department KCB Sarit for their assistance in data

collection. I also would like to thank the entire USIU community for providing a good

environment and facilities to enable me to complete this project report.

iv

DEDICATION

I dedicate my project work to my lovely family and friends who have encouraged and

supported me throughout the process. I will always appreciate.

v

ABSTRACT

The general purpose of this study is to determine the factors affecting mobile banking

adoption and usage at Kenya commercial bank Kenya. The research was guided by the

following research questions:How does social cultural factors affect mobile banking

adoption and usage at KCB bank?How does economic factors affect mobile banking

adoption and usage at KCB bank?How does technological factors affect mobile banking

adoption and usage at KCB bank?

The study utilized a descriptive research design and a quantitative and qualitative research

technique was applied to obtain the required information. The target population for this

study was1040 account holders at the KCB Sarit Centre branch. From the initial target

population of using the sample size formulaat 95% confidence interval a sample size of

138 respondents was obtained. Primary data was collected by administering open and

close-ended questionnaire to the respondents. Microsoft excel and the descriptive

statistical tool, Statistical Package for Social Sciences (SPSS) was used to help the

researcher describe the data and acquire the results through descriptive analysis of means,

standard deviations, andInferential statistics through regression analysis the information

was displayed by use of tables where necessary.

For the analysis of the first objective it was established that most of the respondents

strongly agreed that they have the knowledge to use electronic banking services, ability to

use electronic banking service and they would embrace electronic banking services their

banking needs. For the analysis of the second objective it was established that most

respondents strongly agreed that they are able to access to funds any time they want, and

they considered M-banking a cost-effective way to provide banking services to the

unbanked. For the analysis of the third objective it was established the governments can

organize and create good plans to support the development of civilian technology

innovation and also do its part to improve the economic growth and development. Most

of the respondents affirmed that they would use the electronic banking services for

handling banking transactions.

For the analysis, it can be concluded that most of the account holders possess the

knowledge of how to use electronic banking services, and most of them are willing to

embrace electronic banking services for their banking needs. Among the services mostly

vi

preferred is payment of utility bills. The study also conclude that the uptake of the service

is dependent on the group influences. In regard to the second objective it can be

concluded that use of mobile banking has enabled customers to access to funds any time

they want, and they also consider it a cost-effective way to provide banking services to

the unbanked. It also enables the users to save on transaction cost.The study concludes

that governments has a role to play and most of the respondents affirmed that they would

use the electronic banking services for handling banking transactions although losses

from fraud must be borne by the bank.

The study recommended that firstly, banks should strive to educate the account holders on

the benefits that they would incur from taking up the services. The bank also need to offer

the best services to the current users in order for them to convince their peers, friends and

family members to take up the service. Secondly, customers need to be encouraged to use

of mobile banking as it is a cost-effective way to provide banking services to the

unbanked. The bank needs to ensure that the transaction costs are lower than over the

counter cost so as to convince more clients to take up the service. Lastly, the study

recommends that the governments needs to do its part to improve the economic growth

and development. On issues of security the bank needs to seek ways to minimize fraud,

system failures and guaranteeing the users that electronic banking services can handle

their banking transactions.The study recommends that for future studies, similar studies

be undertaken in other banks so as to be able to compare the findings and make

generalized conclusions. Also, there is a need to do a research to establish the impact that

mobile adoption has had on the profitability of financial institutions.

vii

TABLE OF CONTENT

STUDENT’S DECLARATION ................................................................................................... ii

ACKNOWLEDGEMENT ........................................................................................................... iii

DEDICATION.............................................................................................................................. iv

ABSTRACT ................................................................................................................................... v

LIST OF TABLES ........................................................................................................................ x

ACRONYMS AND ABBREVIATIONS .................................................................................... xi

CHAPTER ONE ........................................................................................................................... 1

1.0INTRODUCTION.................................................................................................................... 1

1.1 Background of the Study .......................................................................................................... 1

1.2 problem Statement .................................................................................................................... 3

1.3 Purpose of the Study ................................................................................................................. 5

1.4 Research Questions ................................................................................................................... 5

1.5 Significance of the Study .......................................................................................................... 5

1.6 Scope of the Study .................................................................................................................... 6

1.7 Definiti0n of Terms................................................................................................................... 6

1.8 Chapter Summary ..................................................................................................................... 6

CHAPTER TWO .......................................................................................................................... 7

2.0 LITERATURE REVIEW ...................................................................................................... 7

2.1 Introduction ............................................................................................................................... 7

2.2 Effects of Social Cultural Factors on Mobile Banking Adoption and Usage ........................... 7

2.3 Effects of Economic Factors on Mobile Banking Adoption and Usage ................................. 12

2.4 Effects of Technological Factors on Mobile Banking Adoption and Usage .......................... 17

2.5 Chapter Summary ................................................................................................................... 21

viii

CHAPTER THREE .................................................................................................................... 22

3.0 RESEARCH METHODOLOGY ........................................................................................ 22

3.1 Introduction ............................................................................................................................. 22

3.2 Research Design...................................................................................................................... 22

3.3 Population and Sampling Design ............................................................................................ 23

3.4 Data Collection Methods ........................................................................................................ 25

3.5 Research Procedures ............................................................................................................... 26

3.6 Data Analysis Methods ........................................................................................................... 26

3.7 Summary ................................................................................................................................. 26

CHAPTER FOUR ....................................................................................................................... 27

4.0 DATA ANALYSIS AND INTERPRETATION ................................................................. 27

4.1 Introduction ............................................................................................................................. 27

4.2 Demographic Information ....................................................................................................... 28

4.3 Social Cultural Factors Affect Mobile Banking ..................................................................... 30

4.4 Effect Economic Factors on Mobile Banking Adoption......................................................... 34

4.5 Effects of Technological Factors on Mobile Banking Adoption ............................................ 38

4.6 Chapter Summary ................................................................................................................... 42

CHAPTER FIVE ........................................................................................................................ 43

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION ........................................ 43

5.1 Introduction ............................................................................................................................. 43

5.2 Summaryof Findings ............................................................................................................... 43

5.3 Discussions ............................................................................................................................. 44

5.4 Conclusion .............................................................................................................................. 49

5.5 Recommendation .................................................................................................................... 49

ix

REFERENCES ............................................................................................................................ 51

APPENDIX I: INTRODUCTION LETTER ............................................................................ 66

APPENDIX II: QUESTIONNAIRE ......................................................................................... 67

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LIST OF TABLES

Table 4.1: Response Rate ................................................................................................... 27

Table 4.2: Age Range ........................................................................................................ 28

Table 4.3: Gender............................................................................................................... 29

Table 4.4: Education .......................................................................................................... 29

Table 4.5: Duration as a Customer .................................................................................... 30

Table 4.6: Social Cultural Factors ..................................................................................... 31

Table 4.7: Model Summary on Social Cultural Factors .................................................... 31

Table 4.8: ANOVA on Social Cultural Factorsand Mobile Banking Adoption ................ 32

Table 4.9: Coefficients of Social Cultural Factors ............................................................. 33

Table 4.10: Descriptive of Economic Factors .................................................................... 35

Table 4.11: Regression between Economic Factors and Mobile Banking Adoption ........ 35

Table 4.12: AN0VA of Ec0nomic Fact0rs and Mobile Banking Adoption ...................... 36

Table 4.13: Coefficient of Economic Factors and Mobile Banking Adoption .................. 36

Table 4.14: Descriptive of Technological Factors on Mobile Banking Adoption ............. 38

Table 4.15: Model Summary on Technological Factors on Mobile Banking Adoption ... 39

Table 4.16: ANOVA on Technological Factors on Mobile Banking Adoption ................ 39

Table 4.17: Coefficients of Technological Factors on Mobile Banking Adoption............ 40

xi

ACRONYMS AND ABBREVIATIONS

ANOVA- Analysis of Variances

FSD- Kenya Financial Sector Deepening Kenya

ICT- Information and Communications Technology

IT- Information Technology

KCB- Kenya Commercial Bank

SD- Standard Deviation

SME- Small and Medium Enterprises

SPSS- Statistical Package for Social Sciences

1

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

According to Swickert, Hittner, Harris and Herring (2012) the term mobile banking (M-

Banking) as the name recommend is the access to banking services and facilities offered

by some monetary establishments by use of an electronic mobile device. Among the

services are operation of account and payment of transactions and alternative

merchandise. KPMG mobile report (2015), across Europe adoption of mobile banking

services is averaged at 38%, with a modest annual growth with United Kingdom, U.S.A.

and Australia being the leaders within the region. Despite this there are discrepancies

within the adoption and Great Britain is considered the most mature zone for on-line and

mobile banking, having launched the services in the year 2011. Out of the ten Association

of South-east Asian Nations (ASEAN), Thailand and Vietnam have continued to

experience fast economic growth with the region having a young population of voters

beneath the age of thirty.

Technology trends within the money sector are influencing all of ASEAN states in a

similar way (KPMG, 2015). The report further superimposed that across ASEAN

multiplied usage in mobile commerce has had a significant impact within the banking

sector owing to external competitive forces.In America PayPal, has emerged to be the

main leader in on-line and mobile payments. The establishment begun in 1998 as a

(person-to-person) electronic payment system that has steady matured after its buy out by

eBay to push its customer’s payments. PayPal is calculable to possess over a hundred and

twenty million users across the globe and with a quarterly revenue of over one billion

dollars. Similarly, Square; a platform supported by Jack Dorsey in 2009, provides an

attachment for tablets and mobile phones that may be utilized to process credit cards by

merchants (Gupta, 2013).

By November 2015, nearly ninety percent of the population above eighteen years had a

daily access to a mobile phone. In addition, whereas the amount has been constant an

increased proportion of the adults currently own a smartphone. Rates of portable usage

was also rumored to remain high and consistent across socioeconomic groups and

2

demographics, however, it declines for persons above sixty years of age (Anderson,

2015).

Smartphone adoption has been high among younger generations, with the differences

being more pronounced among age groups of 18 to 29 who represent eighty eight percent

mobile phone users, and in line with the 2015 survey ownership varies by race and

ethnicity. Inaddition, households with an income less than $25,000 yearly, seventy six

percent of adults possess a mobile phone, in those earning over $100,000 each year,

ninety six percent have a phone (Anderson, 2015). Whereas that's the case Shaikh and

Karjaluoto (2015) highlight that mobile banking and payment services have become

progressively widespread over the past years. These they attributed to the provision of

technology.

Wang, Chen, & Wang (2015) deduce that within the 2011 survey, over sixty percent of

mobile phone users had used mobile banking and this figure has gone up to ninety six

percent in line with a 2015 survey. Despite this variation, a challenge to adoption of

mobile banking has been customers as they have a perception that by using plastic money

their desires were already being met and so they thus lack interest for the services.

Among mobile banking users, there's variation in frequency of use mobile banking

services, and what forms of activities they have interaction in. a comparatively little share

of mobile banking users (9 percent) indicated that they'd used mobile banking within the

previous year however had not used it within the previous month. These low-intensity

users have a lower probability of partaking in all forms of mobile banking activities,

relative to mobile banking users overall (Board Federal Reserve, 2015). Like all mobile

banking users, the foremost common task for low-intensity users is checking account

balances or recent transactions (71 percent).

According to the KPMG (2015), 44 % of the low-intensity users have their bank’s mobile

banking app on their phone, however way below the eighty two percent of all mobile

banking users who have installed their bank’s app in their mobile. Further, a bigger

proportion of low-intensity mobile banking users are ages 45 or older (43 percent),

relative to all mobile banking users (32 percent). in line with Ondiege (2010), across the

world sub-SaharanAfrica had the least deposit organization penetration standing at an

average of 16.6% with Guinea-Bissau having the smallest amount within the class at

0.6% whereas Mauritius with over 210% penetration. Most of those deposits are in

3

industrial banks, with few exceptions where some countries have a lot of deposits in

micro-finance establishments (MFIs) and cooperatives and credit unions. Mwaura (2009)

highlights that rising access to money services is important to any economythat aims to

cut back financial condition although in several developing nations however, just one out

of ten is in a position to access to basic monetary services and banking product through

mobile phones is the most suitable choice for these establishments to reach the poor folks

as several of them have already got access to mobile phones.

The 2014 statistics report by the Communications Authority of Kenya (CA), indicate that

ICT sector has fully grown exponentially, with mobile penetration rate hitting a high of

80.5 per cent, as mobile subscriptions accrued in range from 32.2 million to 33.8 million

denoting a 1.6 per cent growth (CA, 2014). Ondiege (2010) conjointly highlights that

customers typically face high charges once moving their money due to the high

transactions costs involved intrinsically fostering the adoption of mobile banking within

the financial sector. Kamotho (2009) highlights that mobile banking in Kenya begun with

the creation of services that may well be simply accessed via the mobile phone, however,

these facilities haven't solely enabled customers to access information regarding their

accounts however has conjointly seen innovations that currently represent a new channel

for monetary services beyond the banks’ premises.

Odera (2013) conjointly noted that with the urge for Kenyan banks to extend or maintain

the market share there has been witnessed an accrued competition to create new product

and services. Such continuous innovation promotes potency in performance of the

establishments’ activities. Thus, the price for these new services introduced are set to

reduce systematically. There’s still a slow uptake of mobile banking and consistent with

Yu (2013) mobile banking users hasn’t increased to the levels anticipated. Jeong and

Yoon (2013) add that the shortage of trust in m-banking services reduces adoption of

mobile banking despite African economies trying to adopt technology to market

economic growth.

1.2 problem Statement

An appropriate banking atmosphere is considered a key pillar likewise as an enabler of

economic process (Koivu 2002). With the endlessly rising wave of data driven economy,

the banking system in Kenya has inevitably found itself unable to resist technological

indulgence. Banking has continuously been a highly data intensive activity that depends

4

heavily on information technology (IT) to amass, process, and deliver the data to any or

all relevant users. Banks realize that they need to perpetually pioneer and update to retain

their exigent and discerning customers and to offer convenient, reliable, and expedient

services. Driven by the challenge to expand and capture a bigger share of the banking

market, some banks invest a lot in additional bricks and mortar to enlarge their

geographical and market coverage whereas others have thought-about a more

revolutionary approach to deliver their banking services via a brand-new medium (Yu,

2013).

The rise of the web has bestowed a new host of opportunities likewise as threats to

business. Today, the web is well on its way to become a full-fledged delivery and

distribution channel and among the consumer-oriented applications riding at the forefront

of this evolution is electronic money product and services. With the fast diffusion of the

technology, banking in cyberspace is quickly changing into an alternate channel to

provide banking services and product. Mobile banking is currently being thought-about as

a strategic weapon and can revolutionize the method banks operate, deliver, and vie

against each other, particularly when competitive benefits of ancient branch networks are

wearing away speedily (Baraghani, 2007).

The need for convenient avenues of accessing monetary resources beyond the standard

norms has seen the continual growth and modernization of banking patterns. And given

the massive demand for finance related services, establishments beside the historical

banks have joined the fray in a trial to grab a bit of the perceived cake of chance inside

the banking system. According to financial Sector Deepening Kenya (FSD Kenya), the

foremost recent information in on the market indicates that solely nineteen percent of

adult Kenyans reported having access to a proper, regulated establishment whereas over a

third (38%) indicated no access to even the foremost rudimentary type of informal

monetary service. This leaves a share of more than 60% outside the bracket of the reach

of regular banking.

The confined-up demand for a reasonable and reliable method of holding funds that

guarantee that risk levels are consigned to a minimum is systematically evolving. A

system with the potential to obliterate the historical hurdles of value and free access,

which have for an extended time stood in the way of willing partakers of banking

services, evokes immediate attention and interest. Unprecedented uptake of mobile phone

5

banking services in the country could be a testament to the present reality. whereas M-

pesa could be a growing development the mobile banking services in the banks still lags

behind, this paper thus seeks to determine the explanations for this.

1.3 Purpose of the Study

The purpose of this study is to determine the factors affecting mobile banking adoption

and usage at Kenya commercial bank Kenya.

1.4 Research Questions

1.4.1 How doessocial cultural factors affect mobile banking adoption and usage at KCB

bank?

1.4.2 How does economic factorsaffect mobile banking adoption and usage at KCB bank?

1.4.3 How does technological factorsaffect mobile banking adoption and usage at KCB

bank?

1.5 Significance of the Study

1.5.1 KCB Bank

This research will assist the bank better analyze the consumer needs as well as establish

the issues facing mobile banking adoption among its customers. This study will also be

important in determining the strategies that the bank will adopt in facilitating mobile

banking usage in the institution.

1.5.2 Other Banks

To other banks these findings will offer an insight into the issue-facing uptake of mobile

banking by the customers in the sector. Apart from that, the findings will also be utilized

in creating an effective strategy to reach all the customers without mobile banking

services.

1.5.3 Scholars

To other scholars the findings of this research will help in adding knowledge to mobile

banking in Kenya. In addition, the research wasa reference for future studies.

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1.6 Scope of the Study

The study was conducted within KCB bank branches in Nairobi. The research will focus

on customers of KCB branches. The population was customers in Sarit centre branch and

the data for the study was collected using questionnaires through personally

administration or by email. The main limitation anticipated is the few account holders

having limited time to fill the questionnaires at the banking halls hence some were sent by

mail to the respondents.

1.7 Definiti0n of Terms

1.7.1 Mobile Banking

This is the access to banking services and facilities offered by financial institutions by use

of an electronic mobile device (Gupta, 2013).

1.7.2 Social Cultural Factors

Social cultural factors are customs, lifestyles, and values that characterize a society or

group. Cultural aspects include politics, concepts of beauty, education,technology and

material culture, values and attitudes language, law religion, social organizations (Shaikh

& Karjaluoto, 2015).

1.7.3 Economic Factors

Economic factors comprise the information that influences the value of an investment or

business (Baraghani, 2007).

1.7.4 Technological Factors

These are the influences that have an impact on how an organization operates that are

related to the equipment used within the organization's environment (Jeong & Yoon,

2013).

1.8 Chapter Summary

This chapter presents the background factors affecting mobile banking adoption and

usage in Kenya commercial bank Kenya. The chapter is divided into sections and gives a

7

detailed background of the study topic, the problem statement in the context of other

studies, outlines the research questions and provides the significance of the study. Chapter

two will present an overview of the literature reviewed according to the research

questions.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter presents a literature review by various academician’s to determine the

factors affecting mobile banking adoption and usage at Kenya commercial bank Kenya.

The research was guided by the research questions, which are: Does social factors affect

mobile banking adoption and usage at KCB bank? Does economic affect mobile banking

adoption and usage at KCB bank? Does a Technological factor affect mobile banking

adoption and usage at KCB bank?

2.2 Effects of Social Cultural Factors on Mobile Banking Adoption and Usage

To analyse the effects of social cultural factors on mobile banking adoption and usage,

this section aims to review how personal behavior, group influence, and cultural factors

affect mobile banking adoption.

2.2.1 Personal Behavior

Consumer behavior is ever-changing the manner banks run their businesses with many

concentrate on satisfying client wants as a means of driving business growth. This

includes communication and feedback between the customers and businesses in real time

over the web (Ngari, 2014). The rise in present computing devices that have web property

has disrupted the standard aspects of client behavior through redefining the data reach and

rich. Client behavior is referred as how persons, groups, or organizations selected,

purchased, used, and disposed of merchandise, services, concepts, or experiences that met

their wants and needs (Kotler et al., 2014). This behavior was attributed to society,

cultural, and individual factors. Consumer behavior whether or not spontaneous or

rational plays a major role on whether or not he/she buys a product or service (Schiff

8

man, Hansen, & Kanuk, 2008). customers price convenience in their buying experience

on-line , that is denoted by varied factors such as; privacy and security (Metzger, 2015);

pricing, on-line search attributes and brand (Degeratu, Rangaswamy, & Wu, 2000); trust

and factual data (Zhou,2012) promotional and evaluation data (Njuguna, 2014).

Most technology adoption analysis on individual level centered on analyzing the impact

of the preceding constructs on totally different innovations. However, as discovered by

Wejnert (2012), comparatively very little analysis had investigated the impact of

individual characteristics on innovation adoption. However, it appears that such

characteristics may be relevant to an individual’s adoption call. As one of the few studies,

Menzel (2010) showed that certainty and risk-taking characteristic of individual actors

affected their acceptance to novel data and applications. Similarly, multiple researchers

argued that non-public innovativeness and openness absolutely influenced an individual’s

adoption of recent technologies. With the wide adoption of the web, additional

researchers tried to research the impact of the large five temperament traits on general

web adoption and use. For example, extraverts like face-to-face interaction thereby utilize

less time on the web (Landers & Lounsbury 2006), particularly for on-line social

activities like chat rooms (Hamburger and Ben-Artizi 2004).

Nonetheless, they use the web as a tool to amass data and share with others (Amiel and

John Singer Sargent 2014). Conscientiousness individuals are less likely to utilize time

on-line in interests as they see them as unproductive activities. Nevertheless, they like to

use longer time on-line to participate in educational activities (Landers & Lounsbury

2006). folks that are higher in neuroticism tend to limit their on-line time on enjoying

games (Swickert et al. 2012) however pay intensive time on the web to achieve a form of

happiness (Amiel & John Singer Sargent 2014). Agreeable individuals use emails less

often than others (Swickert et al. 2012) however they on the average use loner times on-

line since they're additional persistent in on-line investigations (Landers & Lounsbury

2006). Open-to-experience individuals are generally interested in on-line activities they

are curious and often look for new adventures (Tuten & Bosnjak 2011).

McElroy et al. (2007) concluded that individual’s temperament traits explained additional

variances in her use of web and on-line selling behavior than her cognitive behaviour.

Additionally to general web use, the authors called future analysis to concentrate on

examining the impact of temperament on specific kinds of technology adoption and use.

9

Following the trend of proliferation of Smartphone apps, researchers began to investigate

the correlation between temperament traits and adoption of specific apps. As an example,

Ryan and Xenos (2011) claimed that extraverts are additional likely to become

“Facebook” users than conscientious people. Chittaranjan et al. (2013) found correlations

between temperament and use of apps like “Office”, “YouTube”, “Calendar”, “Mail”, etc.

Similarly, Ch0rley et al. (2015) discovered that the large five temperament traits

contributed to clarify individual variations in utilization of location-based social network

like “Foursquare”. The authors found vital correlation between conscientiousness,

openness, neuroticism and internet usage.

2.2.2. Group Influence

Groups that have an immediate influence and to which an individual belongs are referred

to as membership teams. In contrast, reference teams function as direct (face-to-face) or

indirect points of comparison or reference in forming a person’s perspective or behavior.

Marketers attempt to determine the reference groups of their target markets. Reference

teams expose an individual to new behaviors and lifestyles, influence the person’s

attitudes and self-concept, and make pressures to adapt, this has an effect on the person’s

product and brand decisions (Kotler, 2010). The importance of group influence tends to

be strongest once the item is visible to others whom the customer respects. Manufacturers

of merchandise and brands subjected to robust group influence should work out the way

to reach opinion leaders inside a reference group who, owing to special skills, knowledge,

temperament, or alternative characteristics, exert influence on others.

Consumers typically are influenced by reference teams to which they do not belong. As

an example, an inspirational cluster is one to that the individual desires to belong

(Riquelme & Rios, 2010). Relations will powerfully influence customer behavior. The

family is the most significant client shopping for organization in society. Marketers have

an interest within the roles and influence of the husband, wife, and youngsters on the

acquisition of various merchandise. Husband-wife involvement varies wide by product

class and by stage within the purchasing process. Kids may have sturdy influence on

family shopping for choices. As an example, kids as young as six years could influence

the family motor vehicle purchase decision (Riquelme & Rios, 2010). An individual

belongs to several teams – family, clubs, and organizations. The person’s position in

every cluster are often outlined in terms of each role and position. A job consists of the

10

activities individuals are expected to perform consistent with the persons around them.

Every role carries a status reflective of the general esteem given by society.

Consumer behavior literature conjointly suggests that reference teams, like a social

reference cluster, could have an effect on person's behavior. Two competitive influences

have been acknowledged on the connection between subjective norm and behavior:

conformity and dissension (Simonson and Nowlis, 2011). Conformity is that the results of

individuals attempting to adapt to a subjective norm, thereby avoiding criticism and

rejection. Dissension measures consumer's independence of the subjective norm, and may

be a reflection of sturdy self- JIBC respect and autonomy. A dissentient client is therefore

a personal, unique, special, and divisible from the rest.

The central role of the subjective norm in consumers' behavior has been through

empirical observation verified from many angles. Bagozzi (2010) has shown that once the

subjective norm is measured by social factors and focus, it's a powerful determinant of

client behavior. On the opposite hand, Taylor (1991) argues that the majority individuals

try and surround themselves with individuals and things that are according to their own

identities. The consumption of banking services is also influenced by many reference

teams of the client like the personnel of the bank and ancient ones like friends and family.

We have a tendency to anticipate that reference teams do influence the adoption of web

banking, and modify the hypothesis with the statement that even though web banking

usage is also initiated by a definite reference group like banking personnel, the

continuance of the utilization of online banking depends a lot on alternative factors,

mainly customer's perception concerning technology.

2.2.3. Cultural Factors

Previous studies stressed the importance of culture toward a more robust understanding of

knowledge system adoption Al-Gahtani, Hubona, and Wang (2011) stress the role of

culture when transferring information technology applications across culture, before any

technology transfer, it's necessary to check user necessities and desires. Those desires and

demand are heavily influenced by culture. Hence, there's a necessity to explore the role of

national culture as one of the factors most likely to influence the acceptance or resistance

of electronic banking services. There’s no accepted definition for culture. H0fstede (1997)

defines culture as a c0llective pr0gramming of the mind, which distinguishes the member

of 0ne human cluster fr0m an0ther. Culture may denote the variation between values,

11

beliefs, and motivation of a diverse cluster (Mohamed, 2015). Shore and Venkatachalam

(1996) expressed that culture reflects individual core values and beliefs. These values and

beliefs are created through childhood and strengthened throughout their life (Leidner &

Kayworth, 2010).

Cultural factors embrace the following: Culture is the simplest explanation for a person’s

needs and behavior. Human behavior is basically learned. Each cluster or society

incorporates a culture, and cultural influences on purchasing behavior might vary from

one client to another based on his/her culture. Failure to regulate to those variations may

result in ineffective promotion or embarrassing mistakes. Marketers are continually

making an attempt to identify cultural shifts so as to find new product that may be needed

(Kotler, 2010). Every culture contains smaller subcultures, or teams of individuals with

shared worthy systems based on common life experiences and things. Subcultures

embrace nationalities, religions, racial groups, and geographic regions. Several

subcultures conjure necessary market segments, and marketers within the banking system

have to be compelled to create product and promoting programs tailored to their wants

(Kotler, 2006).

Social categories are society’s comparatively permanent and ordered divisions whose

members share similar values, interests, and behaviors. Socio-economic class isn't only

determined by financial gain however additionally measured as a mixture of occupation,

income, education, wealth and alternative variables. Marketers have an interest in people

because individuals within a given socio-economic class tend to exhibit similar purchases

behavior (Armstrong, 2014). In keeping with Riquelme and Rios (2010), social scientists

have known the seven American social categories as higher uppers, lower uppers, higher

middles, middle class, working class, higher lowers, and also the lower lowers.

The higher uppers category includes the social elite who continue to exist on inherited

possessions. They furnish massive sums to charity, own more than one home, and send

their youngsters to the best colleges. The lower uppers category includes those that have

attained high financial gain or wealth through exceptional ability. They are active in

social and civic affairs and purchase expensive homes, education, and cars. The higher

middles category includes professionals, freelance business persons, and company

managers who possess neither family standing nor uncommon wealth. They believe

education, are joiners and extremely civic minded, and need the higher things in life. The

12

middle category constitutes the average-pay white-and blue-collar employees who go on

the higher facet of city. They get standard product to stay up with trends.

The working class includes people who lead a working-class fashion. They rely heavily

on relatives for economic and emotional support, for recommendation on purchases, and

for help in times of hassle. Riquelme and Rios (2010) indicate that the higher lowers

category consists of the operating poor. Though their living standard is simply on top of

poorness, they strive toward a better status. However, they typically lack education and

are poorly remunerated unskilled work. The lower lowers category is composed of people

that are visibly poor, typically poorly educated unskilled laborers. They’re typically out of

labor and a few depend upon public help.

2.3 Effects of Economic Factors on Mobile Banking Adoption and Usage

2.3.1 Cost of Mobile Banking

Cost can be taken a gander at as far as the price of the service and moderateness,

progressing costs and in addition cost of the handset. This alludes to how much the client

brings about to get to the service and to do the genuine transactions. As per Rosenberg

(2010), client use of portable saving money is impacted by supreme costs as well as

incidentally, aservice is valued. For instance, so as to energize trial of cash transactions, a

few services offer free stores, which make branchless banking a moderate approach to

spare. A portion of the banks mobile arrangements may furnish free services with the

main charge being that of the telecoms specialist co-op. For example, while getting to the

service a client was charged a little expense in type of broadcast appointment and perform

account request and exchange subsidizes between records in a similar bank for nothing

out of pocket. Subsequently, contingent upon how much cost the client acquires in

playing out all the required transactions it might figure out if that client can bear the cost

of it or whether he will pay that much for it, in this way influencing reception of the

services

Mobile saving money is a critical viewpoint since the exchange expenses of installments

are significantly diminished when there is an electronically available store of significant

worth in most administrative services (Karjaluoto, 2012). The topic of who may hold the

store adjust ends up being a pivotal issue influencing the advancement of these models

(Salim, 2011). Regardless of the possibility that the attention is on the more extensive

13

viewpoints required in m saving money, the spread of m-managing an account depends to

a great extent on improvements in the innovation and direction of m-installment. In

Kenya, m managing an account and m-installments initially started creating huge

consideration in 2005, however industry premium and speculation capital wound down

with the consequent web bust. In the previous two years, in any case, organizations,

speculators, and industry spectators, energized by full-scale usage abroad and restricted

yet effective local pilots, have at the end of the day started to treat the different types of

smaller scale budgetary services (MFS) as a convincing business opportunity. This is on

the grounds that the saving money process and method in the Kenyan managing an

account establishments is extremely dull particularly with the expanding number of

brokers in the business. The clients are required to take after a pre-decided procedure to

get the services offered by the bank.

For example, services like storing, withdrawals, checking proclamations, adjust request

and transactions inside and outside the nation requires confirmation, verification, lastly

exchange (InfoDEV, 2006). A cell phone based managing an account arrangement could

cover no less than 60% of those at present with financial balances. Such aservice would

be utilized for putting away money safely and for profiting transactions – individuals

presently convey money, utilize the mail station services, and make utilization of

broadcast appointment transactions through a cell phone (Porteous, 2011).

Different activities utilize cell phones to give money related services to the unbanked.

These services take an assortment of frame including long-remove settlements,

micropayments, and casual broadcast appointment bargaining plans and pass by different

names, including mobile saving money, portable transactions, and portable installments.

Taken together, they are no longer only pilots; in the Philippines, South Africa, Kenya,

and somewhere else, these services are comprehensively accessible and progressively

prevalent. Mobilebanking is without a doubt compelling on cost and administers services

to the unbanked in light of the fact that there is no requirement for branches physical

foundation to help the clients. It is just a branchless bank display that has the capacities of

taking care of restricted bank dealings through the cell phone (infoDEV, 2006).

M-managing an account is a financially savvy approach to give saving money services to

the unbanked in light of the fact that there is no compelling reason to set up physical

branches to encourage clients it called as it is branchless banking'. It is branchless bank

14

show incorporates improved capacity to do restricted bankingtransactions by means of

cell phone (Porteous 2011). Banks ought to build up their m-managing an account

framework and enroll their clients electronically for m-saving money. It is noticed that,

underlying expense for foundation of m-banking framework might be high yet negligible

cost for augmentations of new clients in m-managing an account wills decays constantly

until full usage of existing introduced limit. Availability for cell phone is not the piece of

managing an account benefit it is obligation and some portion of business of media

transmission office and cell specialist co-ops. Thus, banks ought to just rent the media

transmission lines gave by media transmission office to give access to the clients

(Vaughan, 2007).

2.3.2 Financial Services offered

Mobile Financial Services (MFS) envelops a wide scope of money related exercises that

customers take part in or get to utilize their cell phones. MFS can be separated into two

unmistakable classes: portable managing an account (m-saving money) and mobile

banking (m-banking) (Boyd and Jacob, 2011). Mobilebanking is characterized as "a

channel whereby the client collaborates with a bank by means of a cell phone, for

example, a cell phone or individual advanced right hand (PDA)" (Barnes and Corbitt,

2013). Portable managing an account can likewise be considered as the joining of mobile

innovation and monetary administrations (Chung &Kwon, 2009). M-banking is a subset

of saving m0ney as it permits everyb0dy simple access t0 their managing an acc0unt

exercises by means of mobile handsets (Yu &Fang, 2009).

With the change of portable innovations and gadgets, mobilebanking has been considered

as a notable framework due to such characteristics of mobile advances as universality,

comfort and intuitiveness. Mobile installments then again are characterized as the

utilization of a cell phone to lead an installment exchange in which cash or subsidizes are

exchanged from a payer to a collector by means of a middle person, or specifically

without a delegate (Niina Mallat, 2011). Cell phones can be utilized as a part of an

assortment of installment situations, for example, installment for advanced substance

(e.g., ring tones, news, music, or amusements), tickets, stopping expenses and transport

admissions, or to get to electronic installment administrations to pay bills and

solicitations. Installments for physical merchandise are additionally conceivable, both at

15

distributing and ticketing machines, and at kept an eye on purpose of offer (POS)

terminals (Mallat et al., 2008).

Clark (2008) recommended that as a channel the cell phone can increase the quantity of

channels accessible to customers, accordingly giving buyers all the more ease self-benefit

choices by which to get to assets, managing an account data and make installments.

Mobile as a channel conveys accommodation, promptness, and decision to buyers. In any

case, there are an expansive number of various cell phone gadgets and it is a major test

for banks to offer Mobile saving money arrangement on a gadget. Some of these gadgets

bolster Java2Micro Edition (J2ME) and others bolster Wireless Application Protocol

(WAP) program or just SMS. Barnes and Corbitt (2003); Scornavacca and Barnes (2004)

propose that current advancements in media communications have empowered the

dispatch of new get to strategies for saving money administrations, one of these is

portable managing an account; whereby a client collaborates with a bank by means of a

cell phone, for example, a cell phone or individual computerized associate.

Vyas (2009) expressed that Indian banks will target non web based banking clients who

may need standard access to desktop web however are probably going to possess a cell

phone, in this manner detailing incredible capability of Mobile managing an account in

India. Karjaluoto (2002); Rugimbana (1995) found that there is endless market potential

for mobile managing an account because of its dependably on usefulness and the

alternative to do saving money practically whenever and anyplace. Unnithan and

Swatman (2001) concentrated the drivers for change in the advancement of the saving

money segment, and the move towards electronic saving money including portable

managing an account by concentrating on two economies, Australia and India and

proposed solid development capability of new banking direct in India. Vyas (2009); Rao

et al. (2003) propose banks should extend their reasoning about portable managing an

account past web based saving money and ought to begin to view versatility as its own

intense and convincing conveyance channel that can help them convey to end clients new

esteem, for example, quick get to and extra control of individual funds.

2.3.3 Money Supply

Bank conduct is one vital determinant of cash and credit advancements, both of a

repeating and of a more relentless nature. Dismissing this part is much the same as

relegating budgetary go-betweens just an aloof part in the economy (Bruno and Shin,

16

2013). As of late, against the foundation of the monetary emergency, it has turned out to

be progressively apparent that such an aloof perspective of banks is ridiculous. The

volume of wide cash in the economy is the consequence of the cooperation of the saving

money area (counting the national bank) with the cash holding division, comprising of

family units, nonfinancial organizations, the general government other than focal

government, and additionally non-fiscal budgetary delegates (Schularick, and Taylor,

2012). Wide cash includes money available for use and close substitutes, for example,

bank stores, and is instructive for total spending and expansion. It along these lines goes

past those advantages that are by and large acknowledged method for installment to

incorporate instruments that capacity fundamentally as a store of significant worth

(Schmiedel, Kostova and Ruttenberg, 2012).

Financial strategy impacts the supply of cash through the impacts it has on banks'

intermediation movement. Nonetheless, most of the adjustments in cash supply happening

in the economy result from improvements in the way that banks lead their business

(Borio, and Zhu, 2012). All the more particularly, a bank is a foundation, the center

operations of which comprise of conceding advances and providing stores to people in

general. Through the duality of loaning and store issuance, banks satisfy various

capacities: they offer liquidity and installment administrations, embrace the screening and

observing of borrowers' reliability, redistribute hazards and change resource attributes

(Greenbaum, Thakor, and Boot, 2015). These capacities will regularly cooperate inside a

bank's intermediation procedure. Banks may middle of the road amongst savers and

borrowers by issuing securities and loaning the receipts forward. Such loaning action will

require the handling of point by point and regularly restrictive data on borrowers and the

checking of the activities that have been financed (Agénor and Canuto, 2014).

As indicated by Agresti (2016) such credit is, be that as it may, likewise gave by various

non-money related monetary mediators, for example, protection partnerships, and benefits

and venture finances, and is not particular to banks. Banks may likewise loan to

borrowers, yet in this manner make stores. The stores constitute guarantees on the bank

that are capital-sure and demandable, that is redeemable at a known ostensible esteem.

These stores have as a key element the arrangement of liquidity administrations to their

proprietor and, now and again, for example, overnight stores, can likewise be utilized for

17

installment administrations. As portrayed by Diamond and Dybvig, this change of illiquid

cases into fluid cases is a key characterizing component of a bank. Non-fiscal money

related go-betweens don't give their clients fluid stores. Banks' fluid store liabilities

constitute the center of expansive fiscal totals, and banks therefore assume a main part in

the supply of wide cash. Changes in banks' conduct will adjust the cash supply (Keister,

2016).

2.4 Effects of Technological Factors on Mobile Banking Adoption and Usage

Headway in innovation has brought many changes and rivalry among banks and nonbank

money related foundations, which raises worry with respect to why a few people receive

one distributional channel, and others don't. Sonja (2010) investigated on the impacts of

computerization on sparing, credit cooperatives in Uganda, and discovered that

Technology is probably going to build the effectiveness, effort, and maintainability of

microfinance establishments. ICT's has been found to advance the double goals of

miniaturized scale fund maintainability and effort to the destitute individuals and noticed

that Management data frameworks are basic all together for a microfinance foundation to

work proficiently.

2.4.1 Government Intervention

The part of government is more critical in the benefit arranged associations that have

constrained access to monetary assets, for example, SMEs, which ingest a noteworthy

number of the work compel around the nation (Baum and Szivas, 2008). Besides, some

applicable support from government for SMEs can fluctuate from making arrangements

and operational heading and urging aptitude change to giving access to the top of the line

skill (Baum and Szivas, 2008). Bozeman (2000) proposed a few commitments that can be

created by governments to empower the effective selection of ICT developments. Firstly,

governments can include college innovative work offices in the program of urging people

and associations to embrace ICT advancements.

Also, governments can compose and make great arrangements to bolster the improvement

of non-military personnel innovation advancements. (2000) suggests concentrated and

nonstop projects from both government and college research centers to create innovation

based financial matters. Examine execution, providing connected research and innovation

to industry and creating arrangements, are exercises that can be produced by government

18

to bolster little and medium endeavors (Bozeman, 2000). By creating solid and

satisfactory learning of the determinants of ICT developments selection, governments are

additionally anticipated that would settle on fitting choices that empower benefit arranged

associations to receive ICT advancements (Bayo-Moriones and Lera Lopez, 2007).

Governments can have a key influence in helping SMEs enhance the monetary

development and improvement of the nation (Baum and Szivas, 2008). Arrangements that

are acquainted by government have with suit the interests of the influenced parties. A

review by Baliamoune-Lutz (2003) found that ICT advancements selection is

fundamentally controlled by the arrangements that are presented by government. Because

of the significance of ICT advancements in the present period, all legislatures around the

globe ought to be more dynamic in their support of firms and reception of ICT

developments to create new and imaginative ICT-based activities (Fernandez-

Villavicencio, 2010). Along these lines, the present needs to bolster SMEs, for example,

creating pertinent establishments (Smallbone and Welter, 2001) and inciting

appropriation of ICT developments (Oh et al., 2009) must be actualized quickly. Besides,

specific impedance to spur and help SMEs to embrace ICT developments and to help

SMEs to accomplish incredible exhibitions is additionally encouraged (Smallbone and

Welter, 2001).

Thomas, Wolf, Allan and Nadra (2008) specified risk as a key lawful issue. Obligation

must be resolved when money related misfortunes happen in Internet exchanges, and

misfortunes must be borne by the bank, the client, or even other related gatherings in the

Internet banking framework, for example, the Internet specialist organization. By and by,

banks ordinarily issue Internet managing an account contracts or concurrences with

constraints of their obligation, taking note of that the bank is not in charge of any

misfortune brought about by the Internet saving money administration or client utilization

of the administration (Sir Luck et al, 2007).

As indicated by Farhoomand, Liao, Cheng and Lee (2009) another issue of legitimate

support for utilizing the Internet in business exchanges is the locale of the courts and

question determination techniques. Question can emerge from many issues for example,

the Web website is not a branch of the bank, which makes it an entangled assignment for

courts to characterize the area of the bank and choose whether they have purview.

Furthermore, online exchange records are not acknowledged by a few clients inferable

19

from the troubles in giving verification of electronic transmissions. Numerous

organizations are still careful about making broad exchanges over the Web as a result of

the absence of supporting law about electronic archives as lawful proof. Habitually it is

hazy whether electronic reports and records are worthy as adequate proof of exchanges

(Larpsiri et al., 2008)

2.4.2 Security Issues

According to Hutchinson (2007) E-trade security is an inside issue that forestalls

allotment of web dealing with a record in many sparing cash establishments. Hutchinson

(2007) battled that while it is perceived that Australian banks have an amazing record

concerning security of customer information, examines show that Internet customers are

drained about insurance issues including straightforwardness, gathering, use and

disclosure of their own information. This stress basically relates to approval. The dealing

with a record and back endeavors report the most vital rate of mishandle being 57 percent,

which is clearly related to these ventures having a standout amongst the most vital

conditions on PCs in the workplace (Hutchinson, 2007).

A standout amongst the latest security perils is a PC program known as "Nmap" which is

a framework examination mechanical assembly and security scanner. On execution it

causes a bank's intrusion area system to deceptively believe it is being struck by

numerous software engineers over the globe, when it is very one individual (Shu-Hsun

and Ying-Yin, 2008). As showed by Chellappa (2008) the security affirmations offered

by banks and which customers predict should include: Careful reference to their endorsed

Web goals in their creations; check by method for the use of a mechanized statement; on-

screen and mouse-worked keypads for tricky information; disease protection; no under

128-piece encryption; firewall use and communicated cutoff focuses to customer hazard

for unapproved use of get to codes.

From a client perspective, the issue of trust can be ensured by having the going with trust

parts embedded inside the trust appear. Protection which is the method through which

customers are satisfied that their own particular information is sufficiently spared by the

component assembling the information (Shu-Hsun and Ying-Yin, 2008). According to

Chellappa (2008), the lion's share of electronic exchange trades are brought out through

Web programs that are related with shipper goals that along these lines interface with

20

some kind of budgetary association. Like any strong information structure, the move

when driving such a trade should be reliable and direct for the customer yet feedback

ought to be demonstrated remembering the true objective to make an opinion control.

Some affirmation of security is appeared in projects and Web goals as pictures for clients

driving trades that conform to some degree to these frameworks. Generally, an unbroken

hook is used to exhibit a protected session empowering genuineness and mystery by

method for encryption, decrees about data security and firewalls addressing protection,

surely understood and irrefutable space names for affirmation and propelled supports

ensuring check from put stock in pariahs (Chellappa, 2008). With no unmistakable way

for a standard customer to affirm the veritable security of Internet Banking structures,

there is little affirmation to support that these pictures have not been made. This

framework gives the preface of perceiving the imperative security requirements and

mapping them to sensible security building for the relating condition.

2.4.3 Ease of Use

Dependability of an administration is distinguished as a standout amongst the most

critical variables inside each objective client section when choosing the utilization of a

banking benefit conveyance channel. Some concurred that "utilizing cell phone in

banking is dependable" (Mattila, 2002). To be one of the best worries in reception of

portable saving money administrations people may stress over security issues amid

versatile banking benefit exchanges, for example, information and yield systems

(Laukkanen and Lauronen, 2005), loss of association hazard and individual execution

botches (Kuisma et al., 2007). Thus, many individuals may choose not to utilize this

administration and disregard the additional advantages of utilizing versatile saving

money. Be that as it may, some past reviews have contended that, despite what might be

expected, security issues were not significant snags for customers in embracing portable

managing an account (Laukkanen and Lauronen, 2005).

The record adjust administration is a standout amongst the most encouraging portable

banking benefits, and is intended to help clients check their record adjust and most recent

exchanges promptly at whatever time/anyplace (Laukkanen, 2007). It was likewise found

that area free get to made comfort in asking for record parities. Moreover, openness and

versatility are delegated measurements of comfort in the purchaser conduct writings.

21

Thusly the spatial and worldly separation between need acknowledgment and need

fulfillment can be viewed as imperative for doing saving money through cell phone

(Mattila, 2002,).

The capacity to permit purchasers to have more control over their budgetary circumstance

is one fascination of portable banking administrations (Laukkanen and Lauronen, 2005),

as the buyer likes to represent himself/herself when managing his/her own financial

exchanges through the cell phone. Luakkanen (2005) found that the adaptability of having

the capacity to utilize the administration wherever and at whatever point the clients need

empowers prompt finish of managing an account errands (exchanging cash or paying a

bill). This would spare time and be seen as advantageous and proficient. The bank gives a

few administrations through versatile media, data based, transaction–based and individual

administrations (Laudon, and Laudon, 2002). The SMS administration is the simplest

approach to check account parities and most recent exchanges by means of cell phone

(Laukkanen, 2007). Laukkanen et al (2007) found that speed of information transmission

and the UI weakened the additional estimation of portable administrations. In this way,

the qualities of the administration as saw by the client and gave by the managing an

account foundation and specialist organization are critical elements affecting the use of

portable banking.

2.5 Chapter Summary

This chapter analyzed the various works of past scholars regarding the topic and this was

discussed with regard to the variables affecting the various objectives of the study. The

next chapter will look into the research methodology applied in the study while chapter

four will look at the data analysis.

22

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

This chapter discussesresearchprocedurethat wasused in the study. It also establishes the

research design, population, and sample size, data collection methods, research

procedures and data analysis and the presentation methods to be utilized in this research.

3.2 Research Design

According to Kothari (2004), research design is a plan, a roadmap, and blueprint strategy.

That is used by researchers to collect and analyze data so as to obtain answers to research

questions.It is a conceptual frame work. It is “a blue print that is used to conduct a study

with maximum control over factors that may interfere with the validity of the findings”

(Burns & Grove 2003).It is the conceptualstructure within which research is conducted; it

outlines the objectives of a study, specifiesthe sources of data to be collected, and

identifies possible constraints that may affect the study (Saunders, 2oo3).

The research used descriptive design, according to Kombo and Tromp (2006), descriptive

survey is used to describe state of the affairs as they exist. It helps a researcher investigate

variables without manipulating them, and also report various aspects that define

competency (Patton, 2000).Both quantitative and qualitative research was used to be able

to gain better knowledge and understanding of the results. Quantitative research relies on

deductive reasoning or deduction(Sekaran &Bougie, 2010).

23

3.3 Population and Sampling Design

3.3.1Population

Burns and Grove (2003), states that a population is all the elements that meet the criteria

for inclusion in astudy.Population can be defined as the total collection of individuals

whom researchers seek to make inference on (Cooper &Schindler, 2014). The target

population was customers at KCB bank Sarit Centre Branch.

Table 3.1: Population

Account Total Population Percentage (%)

Bankika Personal account 360 37%

Bankika business account 140 12%

Current account 100 10%

Jiinue account 320 30%

Simba Savings account 120 11%

Total 1040 100

Source: KCB branch Sarit (2016)

3.3.2 Sampling Design

3.3.2.1 Sampling Frame

Cooper and Schindler (2014) define a sampling frame as the listing of the entire

population from which a sample size is selected. It represents a complete and correct list

of population members.A sampling frame should be a completeand correct list of

population members only. It is arecord of all the sample units available for selection at a

given stage in the sampling process (Ngechu, 2oo4). The sample frame for this study

came from customers at KCB bank Sarit Centre branch.

3.3.2.2 Sampling Technique

The research will use a stratified random sampling technique. Stratified random sampling

is a technique that divides a population into subgroups. Stratified random sampling is the

24

process of stratification (different strata are madeon the bases of different factors such as

life stages, income levels, management leveletc.) and a random sample is then drawn

from each stratum(Sekaran & B0ugie, 2016). The use of stratified random sampling

helped the researcher reduce error and bias.

3.3.2.3 Sample Size

According to Polit (2001), sample is a proportion of a population. According to Lind

(2008), a sample is a subgroup of the population. The use of a sample enable a researcher

save a lot of time and money, and get more detailed information (Bluman, 2009). A

sample reflects the population as a whole i.e. it a true representative of the population.

Out of the whole population, a sample was selected to be a true representative of the

population

The sample size in a research was the number of observations or replicates to include in a

statistical sample. The sample size is important in achieving the objective of making an

inference about a population from a given sample. Holloway and Wheeler (2002) assert

that sample size does not influence the importance or quality of the study and note that

there are no guidelines in determining the size.

According to Mugenda and Mugenda (2008), a sample should comprise between 10-30%

of the population, and a good population sample should be at least 10% and not more than

30% of the entire population. According to Cooper and Schindler (2014), a sample is

equivalent to the sample size that would be reliable and since the population is large the

sample size was drawn using the following formula.

Sample size = (Zα/2)2 x P(1-P)

E2

Where: (Zα/2)= Z value (2.58=99%; 1.96= 95%; 1.645=90% confidence level)

In this case 1.96 used.

P = percentage proportion of choice (10% used for sample size needed)

E = margin of error (5%)

Going as per the stated assumptions the sample size will therefore be:

25

Sample size = (1.96)2 x 0.1 (1 - 0.1)

0.052

= 3.8416 x 0.09

0.002.5

Sample size = 138.2976 = 138 Respondents

Table 3.2: Sample Distribution

Account Sample size Percentage (%)

Bankika Personal account 51 37%

Bankika Business account 17 12%

Current account 14 10%

Jiinue account 41 30%

Simba savings account 15 11%

Total 138 100%

3.4 Data Collection Methods

Structured questionnaires were used to collect primary data. Structured questionnaire is a

questionnaire in which the questions asked are precisely decided in advance. The

questionnaires were in line with the research objectives and wasdelivered to the

customers. The questionnaire was self-administered. They were delivered to bank

customers and picked immediately they are done answering the questions hence reducing

bias. Likert scale type of questions were used to determine respondent’s attitudes or

feelings about a given subject. In most cases, it is used to measure the level of the

respondents’ satisfaction or consent rate (Cooper & Schindler, 2014).The questionnaire

waspre-tested with a few members of the population for further improvements. This was

done in order to enhance its validity and accuracy of data collected for the study.

26

3.5 Research Procedures

Five questionnaires were pre-tested and reviewed for precision, completeness, accuracy

and clarity of interview questions. Findings received from the pretest wasincorporated

into the questionnaire before administering the final copy.Questions werestandardized to

minimize interference from interpersonal factors. The study used a five-point Liker scale

to ask all respondents to express their opinion on given statements, and they were

expected to agree, strongly agree, remain neutral, disagree or strongly disagree. Before

issuing the questionnaire, the researcher sought permission from supervisors within the

branch, and this was done via an official communication by a letter from United States

International University. Ample time wasallowed for respondents to fill in the

questionnaires, and the information received was treated confidentially for academic

purpose only. The researcher will communicate to the organization about the results of

the research findings.

3.6 Data Analysis Methods

The process of analyzing, cleaning, transforming, and modeling data collected is called

data analysis (Wagner, Halley & Zaino 2011). Both qualitative and quantitative data was

used. Data collected was coded to different variables of the study for ease of data entry

and interpretation. The quantitative data collectedwas analyzed by the use of descriptive

statistics using Statistical Package for Social Sciences (SPSS) and presented through

means and standard deviations. This was done by tallying, computing percentages as well

as describing and interpreting the data in regard to the study objectives and assumptions

through use of SPSS.

The study also undertook a regression and correlation analysis of the various variables to

determine how the various variables relate to each other. The information was displayed

by use of tables. Tables are very appropriate when presenting the data collected for ease

of comprehension and analysis.

3.7 Summary

This chapter discusses the research methodology that was used in the study. It has

highlighted research design, population, sampling frame, sampling technique, Sample

27

size, data collection, and data analysis. Chapter four will cover data analysis and

presentation of the findings of the research.

CHAPTER FOUR

4.0 DATA ANALYSIS AND INTERPRETATION

4.1 Introduction

This chapter offers the findings established from the study and the interpretations. The

chapter also shows the results on demographics of the respondents. The chapter further

gives findings on the various factors affecting mobile banking adoption: a case of KCB

bank Kenya.

4.1.1 Response Rate

The response rate determines the statistical power of a research and a higher rate is

considered better. In this study, a total of 138 questionnaires were distributed and only 95

were filled and returned. This represents a response rate of 69 % and this was sufficient as

shown in table 4.1.

Table 4.1: Response Rate

Questionnaires Number Percentage

Filled and collected 95 69

28

Non Responded 43 31

Total 138 100

4.2 Demographic Information

This section of the analysis shows the results on the demographic factors of participants

in this research study.

4.2.1 Age

To investigate the age of the respondents the age group 30-39 were the majority with 45

respondents accounting for 47.37% of the population; this was followed by those between

25-30, with 25 respondents accounting for 26.32% of the total. Those above 40 years

were 20 and this was 21.05% of the total. Those below 25 were five and represented

5.26% as shown in table 4.2. Most of the account holders are either employed or run their

own firms and this explains the huge numbers of respondents above 25 as shown in table

4.3.

Table 4.2: Age Range

Variable Distribution

Frequency Percent

Below 25 5 5.26

25-30years 25 26.32

30-39years 45 47.37

40 years and above 20 21.05

Total 95 100

4.2.2Gender

From the study, the variable gender had a majority of the respondents being male

accounting for 57.9 % of the population while the female accounted for 42.1% as shown

in table 4.4. This was attributed to the fact that male’s respondents are more approachable

hence they were able to fill in more questionnaire than the female respondents.

29

Table 4.3: Gender

4.2.3 Level of Education

To investigate the education level of the respondents, Bachelor degree holders were the

majority with 55 respondents accounting for 57.9% of the population; Diploma holders

followed with 20 respondents accounting for 21.1% of the total. Certificate holders were

15 accounting for 15.8% while Masters Holders were 5 and this was 5.3 % of the total as

shown in table 4.5. As it is in Kenya there are many degree holders in the various

industries and this explains the high number of bachelor degree holders from the

respondents.

Table 4.4: Education

Variable Distribution

Frequency Percent

Certificate 15 15.8

Diploma 20 21.1

Bachelor 55 57.9

Masters 5 5.3

Total 95 100.0

4.2.4 Duration as a Customer

To analyze the duration served as a customer from the finding 50 of the respondents had

held accounts for 2-4 years, those above 10 years were 35 and accounted for 36.8%, those

of less than 1 year and 5-9 years were 5 and represented 5.3%. It was also established that

those above 10 years were 35 and accounted for 36.8% as shown in Table 4.5.

Variable Distribution

Frequency Percent

Male 55 57.9

Female 40 42.1

Total 95 100.0

30

Table 4.5: Duration as a Customer

Variable Distribution

Frequency Percent

less than 1 year 5 5.3

2-4 years 50 52.6

5-9years 5 5.3

above 10 years 35 36.8

Total 95 100

4.3 Social Cultural Factors Affect Mobile Banking

The first objective of this study was set tosought to establish the effects of social cultural

factors on mobile bankingand the respondents were asked several questions that they

were rating with the best being Strongly agree (1) and the worst being Strongly Disagree

(5).

4.3.1 Descriptive of Social Cultural Factors

The findings established that most of the respondents strongly agreed that they have the

knowledge to use electronic banking services (1.42), ability to use electronic banking

service (1.74) and they would embrace electronic banking services their banking needs

(1.79), as well as use mobile banking to pay my utility bills (1.95). The respondents also

agreed that people whose opinion they value thought they should use electronic banking

services (2.37) while people who are important and in support of the service (2.79), those

who influence respondent’s decisionsand in support of the service (2.84).

There was uncertainty on time taken to learn electronic banking services (3.47), and use

of electronic banking services because other people may be able to access respondents

accounts (3.63), Most disagreed on whether they had the resources to use electronic

banking services (4.02) and whether it would take me lots of time to learn how to use

electronic banking services (4.21).This means that most of the respondents agree that

adoption of the service is dependent on the user as well as the surrounding individuals.

However, there is uncertainty about time taken to learn electronic banking servicesother

people accessing respondent’s accounts.

On analysis of the standard deviation having the resources to use electronic banking

serviceshad the highest deviation of 1.631. This means that there was a big deviation

between those who agreed, disagreed and neutral. The least standard deviation was for the

31

respondents using electronic banking services for own banking needs(0.898) and thus

implies that little variation was exhibited between those who agreed, disagreed and

neutral.

Table 4.6: Social Cultural Factors

VARIABLE MEAN SD

I have the resources to use electronic banking services 4.02 1.631

I have the knowledge to use electronic banking services 1.42 .941

I have the ability to use electronic banking services 1.74 1.213

It would take me lots of time to learn electronic banking services. 3.47 1.610

I am worried to use electronic banking services because other people

may be able to access my account

3.63 1.092

People who are important to make think that I should use electronic

banking services.

2.79 1.245

I value people opinions to use electronic banking services. 2.37 .990

People who influence my decisions think that I should use electronic

banking services

2.84 1.142

It would take me lots of time to learn how to use electronic banking

services.

4.21 1.245

I would use electronic banking services for my banking needs. 1.79 .898

I would use mobile banking to pay my utility bills 1.95 1.283

4.3.2Regression between Social Cultural Factors and Mobile Banking Adoption

Table 4.7: Model Summary on Social Cultural Factors

Model R

R

Square

Adjusted

R Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1

df2

Sig. F

Change

1 .897a .804 .778 .363 .804 30.950 11a 83 .000

a. Predictors: (Constant), resources to use services, knowledge to use electronic services, ability to use

services, lots of time, other people may be able to access my account, people who are important to make

think that I should use electronic banking services, People whose opinion I value think I should use

service, people who influence my decisions think that I should use services, lots of time to learn how to

use services, use electronic banking services for my banking needs, use mobile banking to pay my utility

bills

A regression analysis done between variables of social cultural factorsand mobile banking

adoption. On analysis, the R square value was 0.804 and a p-value of (0.000) was

32

significant as indicated in Table 4.7. This means that 80.4% of the variation in mobile

banking adoptionwas caused by the variation in thesocial cultural factors.

Table 4.8: ANOVA on Social Cultural Factorsand Mobile Banking Adoption

An AN0VA analysis was d0ne between s0cial cultural fact0rs and m0bile banking

ad0pti0n.at 95% c0nfidence level, the F critical was 30.950 and the P value was (0.000)

theref0re significant the results are sh0wn in table 4.8. This result indicate a statistically

significant difference in the mean between the variables 0f social cultural factors that

affect mobile banking

4.3.3 Coefficient ofSocial Cultural Factors And Mobile Banking Adoption

A Pearson correlation was done between mobile banking adoption(dependent variable)

against other social cultural factors. The results of the regression coefficients, t-statistics,

standard errors of the estimates and p values are shown in table 4.9.

When social cultural factors were predicted against mobile banking adoption (Constant)(

p value =.000), have the resources to use electronic banking service (Beta=.807, p

value=.000), have the knowledge to use electronic banking service (Beta=.281, p

value=.010). have the ability to use electronic banking services (Beta= -.514, p

value=.000), It takes lots of time to learn electronic banking services (Beta=.254, p value

=.000), I am worried to use electronic banking services because other people may be able

to access my account (Beta=.453, p value= .000), People who are important to make think

Model Sum of Squares df Mean Square F Sig.

1 Regression 44.960 11 4.087 30.950 .000b

Residual 10.961 83 .132

Total 55.921 94

a. Dependent Variable: Mobile Banking Adoption

b. Predictors: (Constant), resources to use services, knowledge to use electronic services, ability to use

services, lots of time, other people may be able to access my account, people who are important to make

think that I should use electronic banking services, People whose opinion I value think I should use

service, people who influence my decisions think that I should use services, lots of time to learn how to

use services, use electronic banking services for my banking needs, use mobile banking to pay my utility

bills

33

that I should use electronic banking services (Beta=.071, p value=.621), People whose

opinion I value think I should use electronic banking services Beta=.136, p value=.116),

People who influence my decisions think that I would use electronic banking services

(Beta=.165, p value .072), It would take me lots of time to learn how to use electronic

banking services. Beta=-.168, p value .102), I would use electronic banking services for

my banking needs. (Beta=.155, p value= .247), I would use mobile banking to pay my

utility bills (Beta=.048, p value=.826)

From the analysis, only the variables; have the resources to use electronic banking

service, have the knowledge to use electronic banking service, it takes lots of time to

learn electronic banking services, and am worried to use electronic banking services

because other people may be able to access my accountwere significant (pvalue < 0.05),

however, the variable have the ability to use electronic banking services was significant

but had a negative Beta (-0.514).

This implies that for KCB Bank to be able to have many people adopt mobile banking

there is a need for the customers to have the resources to use electronic banking service,

have the knowledge to use electronic banking service, it takes lots of time to learn

electronic banking services, and increase security towards access their account. However,

other areas need to be analysed to improve the adoption include the encouraging

customers who have the ability to use electronic banking services to take the service.

Table 4.9: Coefficients of Social Cultural Factors

Model

Unstandardized

Coefficients Standardized

Coefficients

t Sig. B

Std.

Error Beta

1 (Constant) Performance -1.364 .360 -3.790 .000

I have the resources to use electronic

banking services

.719 .108 .807 6.638 .000

I have the knowledge to use electronic

banking services

.231 .088 .281 2.626 .010

I have the ability to use electronic

banking services

-.327 .051 -.514 -6.365 .000

34

It would take me lots of time to learn

electronic banking services.

.122 .033 .254 3.707 .000

I am worried to use electronic banking

services because other people may be

able to access my account

.320 .054 .453 5.922 .000

People who are important to make

think that I should use electronic

banking services.

.044 .089 .071 .496 .621

People whose opinion I value think I

should use electronic banking services.

.106 .067 .136 1.589 .116

People who influence my decisions

think that I should use electronic

banking services

.111 .061 .165 1.824 .072

It would take me lots of time to learn

how to use electronic banking

services.

-.104 .063 -.168 -1.652 .102

I would use electronic banking

services for my banking needs.

.133 .114 .155 1.166 .247

I would use mobile banking to pay my

utility bills

.029 .131 .048 .221 .826

4.4 Effect Economic Factors on Mobile Banking Adoption

The study sought to establish the effects of differentiation on performance and the

respondents were asked a few questions that they rated with Strongly agree being (1) and

the Strongly disagree (5).

4.4.1 Descriptive of Economic Factors

Most respondents strongly agreed that they are able to access to funds any time they want

(1.63), also majority agreed that M-banking is a costeffective way to provide banking

services to the unbanked because there (2.16), various initiatives use mobile phones to

provide financial services to the unbanked (2.26), mobile banking could save me

transaction cost (2.58), mobile banking reduced transaction costs of payments (2.58),

mobile banking affect rate of money supply in the economy (2.84).

There was however uncertainty on how the customer usage of mobile banking is

influenced by how a service is priced (3.00), customer usage of mobile banking is

35

influenced by absolute prices (3.11) and worry for lack of compensating from bank when

transaction error occurs (3.37) as shown in table 4.10.

Table 4.10: Descriptive of Economic Factors

Variable Mean SD

worry that I cannot get compensating from bank in case of error 3.37 1.430

Mobile banking could save me transaction cost 2.58 1.234

customer usage of mobile banking is influenced by absolute prices 3.11 1.293

Customer usage of mobile banking is influenced by how a service is

priced.

3.00 1.345

Mobile banking reduced transaction costs of payments 2.58 1.357

Various initiatives use mobile phones to provide financial services

to the unbanked.

2.26 1.339

M-banking is a cost-effective way to provide banking services to

the unbanked because there

2.16 1.315

Mobile banking affect rate of money supply in the economy 2.84 1.394

I am able to access my funds any time I want to 1.63 1.185

4.4.2 Regression Between Economic Factors and Mobile Banking Adoption

A regression analysis was done between variables of economic factors and mobile

banking adoption. On analysis, the R square value was 0.839 and a p-value of (0.000) was

significant as indicated in Table 4.11. This means that 83.9% of the variation in mobile

banking adoption was explained by variances in economic factors.

Table 4.11: Regression between Economic Factors and Mobile Banking Adoption

Model R

R

Square

Adjusted R

Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .916a .839 .821 .334 .839 46.407 9a 80 .000

36

a. Dependent Variable: Adoption of Mobile banking

b. Predictors: (Constant), worry for compensating in case of error, save transaction cost, mobile banking is

influenced by absolute prices, usage influenced by prices, reduced transaction costs of payments, provide

financial services to the unbanked, cost-effective way to provide banking services to the unbanked, affect

rate of money supply in the economy, able to access funds any time.

Table 4.12: AN0VA of Ec0nomic Fact0rs and Mobile Banking Adoption

Model Sum of

Squares

df Mean

Square

F Sig.

1 Regression 46.683 9 5.187 46.407 .000b

Residual 8.942 80 .112

Total 55.625 89

a. Dependent Variable: Mobile banking adoption

b. Predictors: (Constant), worry for compensating in case of error, save transaction cost, mobile banking

is influenced by absolute prices, usage influenced by prices, reduced transaction costs of payments,

provide financial services to the unbanked, cost-effective way to provide banking services to the

unbanked, affect rate of money supply in the economy, able to access funds any time.

An ANOVA analysis between economic factors and mobile banking adoption at 95%

confidence level revealed that the F critical was 46.407 and the P value was (0.000)

therefore significant; the results are sh0wn in table 4.12.This result therefore shows that

there was a statistically significant difference in the mean between the various variables

of economic factorsthat influence mobile banking adoption.

4.4.3 Coefficient of Economic Factors and Mobile Banking Adoption

A Pearson correlation was done between mobile banking adoptions (dependent variable)

against other economic factors. The results of the regression coefficients, t-statistics,

standard errors of the estimates and p values are shown in table 4.13.

Table 4.13: Coefficient of Economic Factors and Mobile Banking Adoption

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

37

B

Std.

Error Beta

1 (Constant) Mobile banking adoption .262 .151 1.734 .087

Worry on compensating from bank in

case of error

.214 .039 .397 5.544 .000

Save transaction cost -.055 .053 -.084 -1.042 .301

Influenced by absolute prices -.310 .054 -.507 -5.741 .000

Influenced by how a service is priced. .144 .059 .248 2.448 .017

Reduced transaction costs of payments -.103 .067 -.181 -1.552 .125

Provide financial services to the

unbanked.

.076 .055 .129 1.385 .170

Cost-effective way to provide banking

services to the unbanked because there

.267 .078 .446 3.403 .001

Affect rate of money supply .060 .046 .107 1.294 .199

Access funds any time .456 .045 .697 10.197 .000

When mobile banking adoption was predicted on economic factors (Constant p

value=0.087). Worry on compensating from bank in case of error (Beta=.397, p value

=.000), save transaction cost (Beta=-.084, p value=.301), influenced by absolute prices

(Beta=-.507, p value= .000), influenced by how a service is priced (Beta=.248, p value

=.017), reduced transaction costs of payments (Beta=-.181, p value=.125), provide

financial services to the unbanked (Beta=.129, p value= .170), cost-effective way to

provide banking services to the unbanked because there (Beta=.446, p value= .001),

affect rate of money supply (Beta=.107, p value=.199), access funds any time (Beta=.697,

p value=.000).

From the analysis above, influenced by absolute prices, influenced by how a service is

priced, cost-effective way to provide banking services to the unbanked because there, and

access funds any time were significant (P value < 0.05) except the variables; save

38

transaction cost, reduced transaction costs of payments, provide financial services to the

unbanked, and affect rate of money supply.

This result implies that among the economic factors that has resulted in improved mobile

banking uptake at KCB include;absolute prices of the service, influence by how a service

is priced, cost-effectiveness of the services to the unbanked, and access of funds any time.

On the other side, there are areas that the firm need to adjust to improve mobile banking

uptake and this include; save transaction cost, reduced transaction costs of payments,

provide financial services to the unbanked, and affect rate of money supply.

4.5 Effects of Technological Factors onMobile Banking Adoption

The study sought to establish the effect of technological factors on mobile banking

adoptionand the respondents were asked a number of questions that they rated with

Strongly agree being (1) and Strongly Disagree (5).

4.5.1 Descriptive on Technological Factors

To analyze the descriptive statistic most respondents strongly agree that governments can

organize and create good plans to support the development of civilian technology

innovation (1.74), governments play part to improve the economic growth and

development (1.79), respondents would use the electronic banking services for handling

my banking transactions (1.95). Respondents also agree that responsibility must be

determined when financial losses occur in Internet transactions (2.00), losses must be

borne by the bank (2.61). There was uncertainty that electronic banking services may not

perform well and process payment incorrectly (3.21), when transaction error occurs, I

worry that I cannot get compensating from bank (3.37), when bank account incurs fraud

or the hacker invades, I would have potential loss of status in one's social group (3.37) in

Table 4.14.

Table 4.14: Descriptive of Technological Factors on Mobile Banking Adoption

Variable Mean SD

39

Governments play part to improve the economic growth and

development

1.79 1.110

Governments can organize and create good plans to support the

development of civilian technology innovations

1.74 .788

Responsibility must be determined when financial losses occur in

Internet transactions

2.00 1.082

Losses must be borne by the bank 2.61 1.347

When transaction error occurs, I worry that I cannot get compensating

from bank

3.37 1.313

When bank account incurs fraud or the hacker invades, I would have

potential loss of status in one's social group

3.37 1.313

Electronic banking services may not perform well and process

payment incorrectly.

3.21 1.480

I would see myself using the electronic banking services for handling

my banking transactions.

1.95 .949

4.5.2 Regression analysis of Technological Factors on Mobile Banking Adoption

A regression analysis was done between variables of focus strategy and performance as

shown in table 4.15. 0n analysis, the R square value was 0.863 and a p-value 0f (0.000)

was significant. Therefore, 86.3%of the variation in mobile phone adoption was caused

by the variation intechnological factors as highlighted in table 4.15

Table 4.15: Model Summary on Technological Factors on Mobile Banking Adoption

Model R

R

Square

Adjusted

R Square

Std.

Error of

the

Estimate

Change Statistics

R

Square

Change

F

Change df1

df2

Sig F

change

1 .929a .863 .849 .307 .863 63.726 8a 81 .000

a. Dependent Variable: Mobile Banking Adoption

b. Predictors: (Constant),economic growth and development, Govt support technology innovations,

Responsibility when financial losses occur, Losses borne by the bank,I cannot get compensating, When

hacker invades loss of status, Electronic banking services failure, using the electronic banking services

Table 4.16: ANOVA on Technological Factors on Mobile Banking Adoption

Model Sum of

Squares

df Mean

Square

F Sig.

1 Regression 47.999 8 6.000 63.726 .000b

Residual 7.626 81 .094

40

Total 55.625 89

a. Dependent Variable: Mobile Banking Adoption

b. Predictors: (Constant), economic growth and development, Govt support technology innovations,

Responsibility when financial losses occur, Losses borne by the bank, I cannot get compensating, When

hacker invades loss of status, Electronic banking services failure, using the electronic banking services

An ANOVA analysis between technological factors and mobile banking adoption at 95%

confidence level revealed that the F critical was 63.726 and the P value was (0.000)

therefore significant, the results are shown in table 4.16. This result therefore show that

there was a statistically significant difference in the mean between the various variables

of technological factors that influence mobile banking adoption.

4.5.3 Coefficients of variables of Technological Factors on Mobile Banking Adoption

A Pearson correlation was done between mobile banking adoptions (dependent variable)

against other factors of technology.The results of the regression coefficients, t-statistics,

standard errors of the estimates and p values are shown in table 4.17.When mobile

adoption was predicted on technological factors (p value =.004);Government improve the

economic growth and development (Beta =.607, pvalue =000);Governments support the

development of civilian technology innovations (Beta =.-202, p value

=006);Responsibility when financial losses occur in Internet transactions (Beta =.526, p

value =000);Losses must be borne by the bank (Beta =.-283, p value =000); when

transaction error occurs I cannot get compensating from bank (Beta =.199, p value =000);

when bank account incurs fraud I would have potential loss of status (Beta =-.031, p

value =638); electronic banking services may not perform well (Beta =.083, p value

=092); using the electronic banking services for handling my banking transactions (Beta

=-.014, p value =775) as shown by table 4.17.

Table 4.17: Coefficients of Technological Factors on Mobile Banking Adoption

Model

Unstandardized

Coefficients Standardized

Coefficients

t Sig. B

Std.

Error Beta

41

1 (Constant) Mobile banking adoption .597 .199 3.001 .004

Government Improve the economic

growth and development

.421 .061 .607 6.844 .000

Governments support the development

of civilian technology innovations

-.213 .076 -.202 -2.805 .006

Responsibility when financial losses

occur in Internet transactions

.383 .057 .526 6.725 .000

Losses must be borne by the bank -.166 .033 -.283 -5.051 .000

When transaction error occurs I cannot

get compensating from bank

.117 .030 .199 3.836 .000

When bank account incurs fraud I

would have potential loss of status

-.018 .039 -.031 -.472 .638

Electronic banking services may not

perform well

.043 .025 .083 1.704 .092

Using the electronic banking services

for handling my banking transactions.

-.012 .040 -.014 -.287 .775

From the analysis, majority of the variables had a significant positive effect on mobile

banking adoption except the variable; when bank account incurs fraud I would have

potential loss of status (p value=.638), electronic banking services may not perform well

(p value=.092) and I would see myself using the electronic banking services for handling

my banking transactions (p value=.775),

From the findings it is clear that KCB has experienced improved mobile banking

adoption as a result of government improve the economic growth and development,the

bank taking responsibility when financial losses occur in Internet transactions and low

worry that when transaction error occurs clients cannot get compensating from bank.

However, there are areas that needs improvement to fully achieve better performance.

This includeminimizing fraud, system failures and guaranteeing the users that electronic

banking services is capable of handling their banking transactions.

42

4.6 Chapter Summary

This chapter has presented the interpreted results and findings. The first section provided

an analysis of the various demographic data on the respondents. The second section

analysed the findings how cost strategy affect performance. The third section provided

findings on how differentiation strategy affect performance. The fourth section presented

the effects of focus strategy on performance. The next chapter discusses the findings,

conclusions and recommendations.

43

CHAPTER FIVE

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION

5.1 Introduction

In this chapter, the findings of this study are discussed with regard to the reviewed

literature and conclusions are drawn with recommendations being made at the end. The

chapter has subsections divided into discussion, conclusions, and recommendations. In

addition, recommendationsfor further studies are also highlighted.

5.2 Summary of Findings

The purpose of this study was to determine the factors affecting mobile banking adoption

and usage at Kenya commercial bank Kenya and sought to answer the following research

questions: How does social cultural factors affect mobile banking adoption and usage at

KCB bank? How does economic factors affect mobile banking adoption and usage at

KCB bank? How does technological factors affect mobile banking adoption and usage at

KCB bank?The study utilized a descriptive research design and questionnaires were used

as data collection tool. The target population for the study was 1040 customers at KCB

bank Sarit Centre Branch. Using the sample formula, a sample of 138 respondents was

drawn out of which only 95 responded giving a rate of 69% which was sufficient. The

data was then analyzed using both descriptive and inferential statistics by the aid of SPSS

and the results were presented in tables.

For the analysis of the first objective it was established that most of the respondents

strongly agreed that they have the knowledge to use electronic banking services, ability to

use electronic banking service and they would embrace electronic banking services their

banking needs. In addition, the findings also revealed that the respondents would use

mobile banking to pay utility bills and that the respondents valued others opinion in order

to use electronic banking services. It was also established that learn how to use electronic

banking services did not take time.

For the analysis of the second objective it was established that most respondents strongly

agreed that they are able to access to funds any time they want, and considered M-

banking a cost effective way to provide banking services to the unbanked. In addition, the

findings revealed that various initiatives use mobile phones to provide financial services

44

to the unbanked,it saves transaction cost, reduced transaction costs of payments, and

affected rate of money supply in the economy. There was however uncertainty on

influence of pricingon mobile service usage.

For the analysis of the third objective it was established the governments can organize

and create good plans to support the development of civilian technology innovation and

also do its part to improve the economic growth and development. Most of the

respondents affirmed that they would use the electronic banking services for handling

banking transactions and that responsibility must be determined when financial losses

occur in Internet transactions, while losses must be borne by the bank in case of fraud.

5.3 Discussions

5.3.1 Social Cultural Factors and Mobile banking adoption

The study established that most of the respondents had the knowledge to use electronic

and ability to use electronic banking services. This has been attributed to the individual

character of the adopters. Wejnert (2012) established that characteristics may be relevant

to an individual’s adoption capability. As one of the few studies, Menzel (2010) showed

that certainty and risk-taking characteristic of individual actors affected their acceptance

to novel data and applications. Wejnert (2012), comparatively very little analysis had

investigated the impact of individual characteristics on innovation adoption. However, it

appears that such characteristics may be relevant to an individual’s adoption call. As one

of the few studies, Menzel (2010) showed that certainty and risk-taking characteristic of

individual actors affected their acceptance to novel data and applications. Similarly,

multiple researchers argued that non-public innovativeness and openness absolutely

influenced an individual’s adoption of recent technologies. With the wide adoption of the

web, additional researchers tried to research the impact of the large five temperament

traits on general web adoption and use. For example, extraverts like face-to-face

interaction thereby utilize less time on the web (Landers & Lounsbury 2006), particularly

for on-line social activities like chat rooms (Hamburger and Ben-Artizi 2004).

The findings also revealed that the respondents value people opinions to use electronic

banking services. Riquelme and Rios (2010) established that onsumers typically are

influenced by reference teams to which they do not belong. as an example, an

inspirational cluster is one to that the individual desires to belong relations will

45

powerfully influence customer behavior. The family is the most significant client

shopping for organization in society. Marketers have an interest within the roles and

influence of the husband, wife, and youngsters on the acquisition of various merchandise.

Husband-wife involvement varies wide by product class and by stage within the

purchasing process. Kids may have sturdy influence on family shopping for choices. As

an example, kids as young as six years could influence the family motor vehicle purchase

decision (Riquelme & Rios, 2010).

The findings also revealed that people who are important to the respondents made them

think about using electronic banking services. Simonson and Nowlis, (2011) in their study

noted that individual belongs to several teams –family, clubs, and organizations. The

person’s position in every cluster are often outlined in terms of each role and position. A

job consists of the activities individuals are expected to perform consistent with the

persons around them. Every role carries a status reflective of the general esteem given by

society.

In addition, the research also established that people who influence the account holder’s

decisions thought they should use electronic banking services.Simonson and Nowlis,

(2011) also established that same and they explained that reference teams, like a social

reference cluster, could have an effect on person's behavior. Two competitive influences

have been acknowledged on the connection between subjective norm and behavior:

conformity and dissension. Conformity is that the results of individuals attempting to

adapt to a subjective norm, thereby avoiding criticism and rejection.

There was uncertainty on timetaken to learn electronic banking services and fear that

other people may be able to access personal account, this could be attributed to the

general culture. Previous studies stressed the importance of culture toward a more robust

understanding of knowledge system adoption Al-Gahtani, Hubona, and Wang (2011)

stress the role of culture when transferring information technology applications across

culture, before any technology transfer, it's necessary to check user necessities and

desires. Those desires and demand are heavily influenced by culture. According to

Mohamed (2015)culture may denote the variation between values, beliefs, and motivation

of a diverse cluster Shore and Venkatachalam (1996) expressed that culture reflects

individual core values and beliefs. These values and beliefs are created through childhood

and strengthened throughout their life (Leidner & Kayworth, 2010).

46

5.3.2 Economic Factors and Mobile Banking Adoption

The study revealed that most of the respondents were able to access funds any time they

wanted to (1.63). This was similar to what Clark (2008) study recommended that as a

channel the cell phone can increase the quantity of channels accessible to customers,

accordingly giving buyers all the more ease self-benefit choices by which to get to assets,

managing an account data and make installments. Mobile as a channel conveys

accommodation, promptness, and decision to buyers. Indeed, Barnes and Corbitt (2003);

Scornavacca and Barnes (2004) established that the current advancements in media

communications have empowered the dispatch of new get to strategies for saving money

administrations, one of these is portable managing an account; whereby a client

collaborates with a bank by means of a cell phone, for example, a cell phone or individual

computerized associate.Additionally, Borio, and Zhu (2012) established that fnancial

strategy impacted the supply of cash through the impacts it has on banks' intermediation

movement. Nonetheless, most of the adjustments in cash supply happening in the

economy result from improvements in the way that banks lead their business.

With the change of portable innovations and gadgets, mobile banking has been

considered as a notable framework due to such characteristics of mobile advances as

universality, comfort, and intuitiveness. Mobile installments then again are characterized

as the utilization of a cell phone to lead an installment exchange in which cash or

subsidizes are exchanged from a payer to a collector by means of a middle person, or

specifically without a delegate (Niina Mallat, 2011). Cell phones can be utilized as a part

of an assortment of installment situations, for example, installment for advanced

substance (e.g., ring tones, news, music, or amusements), tickets, stopping expenses and

transport admissions, or to get to electronic installment administrations to pay bills and

solicitations. Installments for physical merchandise are additionally conceivable, both at

distributing and ticketing machines, and at kept an eye on purpose of offer (POS)

terminals (Mallat et al., 2008).

Clark (2008) recommended that as a channel the cell phone can increase the quantity of

channels accessible to customers, accordingly giving buyers all the more ease self-benefit

choices by which to get to assets, managing an account data and make installments.

47

Mobile as a channel conveys accommodation, promptness, and decision to buyers. In any

case, there are an expansive number of various cell phone gadgets and it is a major test

for banks to offer Mobile saving money arrangement on a gadget.

The study established that M-banking is a cost-effective way to provide banking services

to the unbanked (2.16) through provision of financial services (2.26). Similarly, Porteous,

(2011) established that mobile banking is without a doubt compelling on cost and

administers services to the unbanked in light of the fact there is no requirement for

branches physical foundation to help the clients. InfoDEV (2006) research established

that it is just a branchless bank display that has the capacities of taking care of restricted

bank dealings through the cell phone.Financial strategy impacts the supply of cash

through the impacts it has on banks' intermediation movement. Nonetheless, most of the

adjustments in cash supply happening in the economy result from improvements in the

way that banks lead their business (Borio, &Zhu, 2012). All the more particularly, a bank

is a foundation, the center operations of which comprise of conceding advances and

providing stores to people in general. Through the duality of loaning and store issuance,

banks satisfy various capacities: they offer liquidity and installment administrations,

embrace the screening, and observing of borrowers' reliability, redistribute hazards and

change resource attributes (Greenbaum, Thakor, & Boot, 2015).

The respondents agreed that mobile banking could save me transaction cost (2.58), and

Karjaluoto (2012) established that Mobile banking is a critical viewpoint since the

exchange expenses of installments are significantly diminished when there is an

electronically available store of significant worth in most administrative services. On the

other hand,Karjaluoto (2002); Rugimbana (1995) found that there is endless market

potential for mobile managing an account because of its dependably on usefulness and the

alternative to do saving money practically whenever and anyplace. The study established

that mobile banking affect rate of money supply in the economy (2.84) and Bruno and

Shin (2013) illustrated that bank transaction is one vital determinant of cash and credit

advancements, both of a repeating and of a more relentless nature.

5.3.3 Effects of Technology on Mobile Banking Adoption

The study established that the Governments can organize and create good plans to support

the development of civilian technology innovations (1.74), as well as improve the

economic growth and development (1.79). Bozeman (2000) in his study proposed a few

48

commitments that can be created by governments to empower the effective selection of

ICT developments. Firstly, governments can include college innovative work offices in

the program of urging people and associations to embrace ICT advancements. Also,

governments can compose and make great arrangements to bolster the improvement of

nonmilitary personnel innovation advancements.Bozeman (2000) suggests concentrated

and nonstop projects from both government and college research centers to create

innovation based financial matters. Examine execution, providing connected research and

innovation to industry and creating arrangements, are exercises that can be produced by

government to bolster little and medium endeavors.

The findings revealed that most respondents thought that responsibility must be

determined when financial losses occur in internet transactions (2.00) and losses must be

borne by the bank (2.61). Thomas, Wolf, Allan and Nadra (2008) established that

specified risk is a key lawful issue. Obligation must be resolved when money related

misfortunes happen in Internet exchanges, and misfortunes must be borne by the bank,

the client, or even other related gatherings in the Internet banking framework, for

example, the Internet specialist organization. However, Sir luck et al, (2007) noted that

banks ordinarily use internet managing an account contracts or concurrences with

constraints of their obligation, taking note of that the bank is not in charge of any

misfortune brought about by the Internet saving money administration or client utilization

of the administration

There was uncertainity on whether electronic banking services may not perform well and

process payment incorrectly ( 3.21) therefore there is a need for the bank to guarantee

that as showed by Chellappa (2008) the security affirmations offered by banks and which

customers predict should include: Careful reference to their endorsed Web goals in their

creations; check by method for the use of a mechanized statement; on-screen and mouse-

worked keypads for tricky information; virus protection; firewall use and communicated

cutoff focuses to customer hazard for unapproved use of access to codes.

There was also uncertainty on the customer side on whether when transaction error

occurs, they would get compensating from bank (3.37),Shu-Hsun and Ying-Yin (2008)

agree with the statement and intheir findings they established that from a client

perspective, the issue of trust can be ensured by having the going with trust parts

embedded inside the trust appear. Protection which is the method through which

49

customers are satisfied that their own particular information is sufficiently spared by the

component assembling the information). According to Chellappa (2008), the lion's share

of electronic exchange trades are brought out through Web programs that are related with

shipper goals that along these lines interface with some kind of budgetary association.

Like any strong information structure, the move when driving such a trade should be

reliable and direct for the customer yet feedback ought to be demonstrated remembering

the true objective to make an opinion control.

5.4 Conclusion

5.4.1 Social Cultural Factors Affect Mobile Banking Adoption

For the analysis, it can be concluded that most of the account holders possess the

knowledgeof how to use electronic banking services, and most of them are willing to

embrace electronic banking services for their banking needs. Among the services mostly

preferred is payment of utility bills. The study also conclude that the uptake of the service

is dependent on the group influences.

5.4.2 Economic Factors Affect Mobile Banking Adoption

For the data analysis done with regard to the this objective it can be concluded that use of

mobile banking has enabled customers to access to funds any time they want, and they

also consider it a cost effective way to provide banking services to the unbanked. It also

enables the users to save on transaction cost.

5.4.3 Technological Factors Affect Mobile Banking Adoption

The study concludes that governments can organize and create good plans to support the

development of civilian technology innovation and also do its part to improve the

economic growth and development. Most of the respondents affirmed that they would use

the electronic banking services for handling banking transactions and that responsibility

must be determined when financial losses occur in Internet transactions, while losses

must be borne by the bank in case of fraud.

5.5 Recommendation

5.5.1 Recommendations for improvement

50

5.5.1.1Social Cultural Factors and Mobile Banking Adoption

Since most of the account holders possess the knowledge of how to use electronic

banking services, banks should strive to educate the account holders on the benefits that

they would incur from taking up the services. The bank also need to offer the best

services to the current users in order for them to convince their peers, friends and family

members to take up the service.

5.5.1.2 Economic Factors Affect Mobile Banking Adoption

Customers need to be encouraged to use of mobile banking as it would have enabledthem

to access their funds any time they want, and it is also a cost-effective way to provide

banking services to the unbanked. The bank needs to ensure that the transaction costs are

lower than over the counter cost so as to convince more clients to take up the service.

5.4.3 Technological Factors Affect Mobile Banking Adoption

The study recommends that the governments needs to organize and create good plans to

support the development of civilian technology innovation and also do its part to improve

the economic growth and development. On issues of security the bank needs to seek ways

to minimize fraud, system failures and guaranteeing the users that electronic banking

services can handle their banking transactions.

5.5.2 Recommendations for Further Studies

This study looked at the factors affecting mobile banking adoption and usage at KCB.

The study recommends that similar studies be undertaken in other banks so as to be able

to compare the findings and make generalized conclusions. Also, there is a need to do a

research to establish the impact that mobile adoption has had on the profitability of

financial institutions.

51

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APPENDIX I: INTRODUCTION LETTER

Albertina Sachombe

P.O. BOX 14634 - 00800

Nairobi, Kenya

Email: sachombe@gmail.com

December 9th, 2016

Dear Respondent,

RE: REQUEST FOR PARTICIPATION IN RESEARCH WORK

I am a Masters student at United States International University pursuing an (MBA) with

a concentration inFinance. In partial fulfilment of the requirement for the degree, I am

conducting a research on “factors affecting adoption of mobile banking At KCB”

I shall be grateful if you kindly complete the enclosed questionnaire to be used to collect

the data applicable to my research. Any contributions areessential for the achievement of

this research. The results will beused only for academic purposes.In case of any queries

during completing the enclosed questionnaire, contact me at any time via my contact

furnished at the top of this letter

Thank you in advance,

Yours Sincerely,

67

Albertina Sachombe

APPENDIXII: QUESTIONNAIRE

To determine the factors affecting mobile banking adoption and usage: a case of

KCB Bank Kenya

This questionnaire aids to assists in data collection for academic purpose. The research

intends to give an analysis of impact of social cultural factors, economic factors and

technological factors on mobile banking adoption and usage at KCB bank. All

information obtained, was handled with high level of confidentiality. Do not incorporate

identification or names in the questionnaire.

Please answer every question as in outlined by using either a cross(x) or (ticking) in the

option that applies.

SECTION A: DEMOGRAPHIC FACTORS

Please tick the most appropriate answer (√ )

1. Age

Below 25 yrs

25-30yrs

30-39yrs

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40 yrs and Above

2. Gender Male Female

3. What is your highest education level?

Certificate Diploma Degree Masters PHD

5. How long have been a customer in this organization?

Less than 1 year 2-4 years 5-9 years above 10 years

SECTION B: SOCIAL CULTURAL EFFECT OF MOBILE BANKING ADOPTION

AND USAGE AT KCB BANK

Please indicate your opinion as per the level of disagreement or agreement with the

outline statement using 1 to 5 scale guideline. 1= Strongly Agree 2- Agree, 3= Neutral,

4 =Disagree, 5= Strongly Disagree

PERSONAL BEHAVIOR

1 2 3 4 5

1 I have the resources to use electronic banking services

2 I have the knowledge to use electronic banking services

3 I have the ability to use electronic banking services

4 It would take me lots of time to learn how to use

electronic banking services.

GROUP INFLUENCE

5 I am worried to use electronic banking services because

other people may be able to access my account

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6 People who are important to make think that I should use

electronic banking services.

7 People whose opinion I value think I should use

electronic banking services.

8 People who influence my decisions think that I should

use electronic banking services

CULTURAL FACTORS

9 It would take me lots of time to learn how to use electronic

banking services.

10 I would use electronic banking services for my banking

needs.

11 I would use mobile banking to pay my utility bills

.

12. What other social culturalfactors affect mobile banking adoption

SECTION C: ECONOMIC FACTORS AFFECT MOBILE BANKING ADOPTION

AND USAGE AT KCB BANK

COST OF MOBILE BANKING

When transaction error occurs, I worry that I cannot get

compensating from bank.

Mobile banking could save me transaction cost

customer usage of mobile banking is influenced by

absolute prices

Customer usage of mobile banking is influenced by how

a service is priced.

Mobile banking is an important aspect since the

transaction costs of payments are greatly reduced when

there is an electronically accessible

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FINANCIAL SERVICES OFFERED

Various initiatives use mobile phones to provide financial

services to the unbanked.

M-banking is a cost effective way to provide banking

services to the unbanked because there

MONEY SUPPLY

Mobile banking affect rate of money supply in the

economy

I am able to access my funds any time I want to

20. Are there any that economic factors affect mobile banking

SECTION D: TECHNOLOGICAL FACTORS AFFECT MOBILE BANKING

ADOPTION AND USAGE AT KCB BANK

GOVERNMENT INTERVENTION

Governments can play a key part in assisting to improve

the economic growth and development of the country

governments can organize and create good plans to

support the development of civilian technology

innovations

Responsibility must be determined when financial losses

occur in Internet transactions

and losses must be borne by the bank

SECURITY ISSUES

When transaction error occurs, I worry that I cannot get

compensating from bank

When bank account incurs fraud or the hacker invades, I

71

would have potential loss of status in one's social group

EASE OF USE

Electronic banking services may not perform well and

process payment incorrectly.

I would see myself using the electronic banking services

for handling my banking transactions.

17.What should be done to make the process better?