A lot of research has been done on the effect of mobile money on efficiency of and outreach of
micro-finance loans in developing countries. Yet to date, there has been limited quantitative tests done to show the factors
driving the acceptance of mobile- money service, and whether the level of acceptance has any significant effect
on the performance of small and micro-businesses in Kenya
Journal Publication on ROLE OF MOBILE BANKING IN ENHANCING FINANCIAL PERFORMA...Muiruri Kariri
This document summarizes a study on the role of mobile banking in enhancing the financial performance of micro and small enterprises (MSEs) in Nakuru town, Kenya. The study found that there is a strong, significant, and positive correlation between the timeliness and reliability of mobile banking and the financial performance of MSEs. Adopting mobile banking was found to likely improve MSEs' financial performance due to mobile banking's timeliness and reliability. The study recommends that MSEs fully adopt mobile banking services.
Analysis on Challenges Small Business Face in using the MBanking/Payment Serv...Dr. Amarjeet Singh
Mobile banking services are at the present
increasingly used to accomplish economic transactions by the
business people who would have followed long processes to
complete their transaction deals. Despite the importance of
mobile banking, several studies indicate that the industry still
faces challenges including lack of awareness among the
business parties and customers. Though large populations of
Kenyans have embraced the new technology in most of their
transactions, the contribution of the new technology on small
scale enterprises has received very little attention from the
scholars. The main purpose of this study was to identifying
and rank the challenges faced by the residents as they try to
embrace the mobile banking services. The study adopted a
survey design where data was collected from selected
respondents. The population of the study comprises of 730
small business enterprises. Simple random sampling technique
was used to select 88 small business enterprises based on 95%
confidence level and accepting 5% margin of error as
recommended for most business and social researches.
Primary data was collected from the respondents. Data was
analyzed by using statistical package for social sciences (SPSS)
and it was presented in the form of graphs, tables and charts.
Analysis of the data revealed that the highest challenge faced
by the business owners was the cost of transaction with a
cumulative percentage of 51.3 as compared with other
challenges.
This document summarizes a study that examined predictors of acceptance of 'Lipa na Mpesa' mobile payments by micro-entrepreneurs in Laikipia East Sub-County, Kenya. The study found that ease of use, perceived usefulness, and attitude towards usage highly influenced micro-entrepreneurs' intention to accept Lipa na Mpesa payments, with an 85% degree of variation. While many micro-entrepreneurs had signed up for the service, only about a quarter were actively using it. The researcher recommends maintaining the easy-to-use technology but further study is needed to understand the low attitude towards use despite initial signup.
Effect of Mobile Banking on Financial Performance of Commercial Banks in Kisi...paperpublications3
Abstract: Around half of the world’s population is out of formal banking and financial services. For this reason, several mobile payment trend studies have revealed the potential of mobile network technologies for payment purposes. The main objective of the study was to assess the effect of mobile banking to financial performance of commercial banks in Kisii Town, Kenya. The specific objectives of the study were to evaluate the effect of perceived security of mobile payments technology on financial performance of commercial banks in Kisii Town, to determine the effect of perceived ease of accessibility of mobile payments technology on financial performance of commercial banks in Kisii Town and to determine the effect of transaction cost of mobile payment technology on financial performance of commercial banks in Kisii Town. The study used a sample of 255 respondents which was drawn from Operation Managers, clients, cashiers and 7 M-Pesa paying agents. The data collected were analyzed by use of descriptive statistics and inferential statistics with the help of Social Sciences version 21 software. The study found out that, perceived cost, perceived access and perceived security of mobile payments technology have a significant influence on the financial performance of commercial banks. The study concluded that the transaction cost of mobile payment is cheap, mobile banking money can be sent any time of day; it saves time of travelling and that mobile banking transactions are processed in accordance with clients’ expectations besides providing evident of payment to another person.
Keywords: Craft, External equity, Financing, Growth, Microenterprise, Tabaka.
Title: Effect of Mobile Banking on Financial Performance of Commercial Banks in Kisii Town, Kenya
Author: Isabellah Mageto, Dr. Willy Mwangi Muturi, Dr. Vitalis Mogwambo Abuga
ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Paper Publications
In order to reduce cash handling cost of banks amongst other objectives, the Central Bank of Nigeria introduced the ‘cashless policy’. The success of this policy hinges on the adoption of alternative payment systems one of which is mobile banking. Thus it is imperative for policy makers and other relevant stakeholders to anticipate and deal with inhibitions surrounding the adoption of mobile banking by bank customers in the country. This study investigates the determinants of mobile banking adoption in Nigeria using a modified version of Technology Acceptance Model (TAM). This incorporates Perceived Risk, Facilitating Conditions and Demographic Characteristics (Age, Gender, Educational Qualification and Income) to Perceived Usefulness and Perceived Ease-of-Use as determinants of Mobile Banking Adoption. We also propose that this relationship is mediated by attitude towards mobile banking adoption. A total of 250 bank customers from the Lagos area were selected and a structured questionnaire was designed and copies distributed to them. Data was analysed using multiple regression and computed using SPSS 20.0 computer application. Results show that Perceived Usefulness, Perceived Ease-of-Use, perceived Risk, Facilitating Conditions, Age, Educational Qualifications and Income significantly determine Mobile Banking Adoption. However, the relationship between gender and Mobile Banking Adoption is not significant. The outcome of this study has some implications to m-banking policy formulation and implementation. It also throws more light into what should be done to improve mbanking adoption rate in Nigeria
Over the last decade, Africa has become a global leader in mobile money with the rate of smartphone adoption at twice the global scale. But what challenges is the industry facing and how can these be overcome? Our new article, sponsored by Mazars, explores.
Mobile money services have greatly expanded access to financial services in Kenya. M-Pesa, launched in 2007, allows users to store and transfer money via mobile phones. It now has over 17 million users, more than Western Union globally. M-Pesa led to the creation of mobile banking like M-Kesho. Crowdfunding apps and other mobile startups are creating opportunities. The government aims to achieve complete financial inclusion through initiatives that expand infrastructure like its new undersea fiber optic cable. Mobile innovations have helped lift many Kenyans out of poverty and driven progress towards the country's 2030 development goals.
Mobile banking has great potential to promote financial inclusion in Africa. By reducing geographic and cost barriers, mobile banking allows commercial banks to expand into new areas at low cost. Kenya and South Africa have been leaders in mobile banking, with services like M-Pesa in Kenya growing exponentially and bringing millions of unbanked individuals into the formal financial system. Partnerships between mobile operators, banks, and microfinance institutions can further expand access to affordable financial services across Africa through mobile phones.
Journal Publication on ROLE OF MOBILE BANKING IN ENHANCING FINANCIAL PERFORMA...Muiruri Kariri
This document summarizes a study on the role of mobile banking in enhancing the financial performance of micro and small enterprises (MSEs) in Nakuru town, Kenya. The study found that there is a strong, significant, and positive correlation between the timeliness and reliability of mobile banking and the financial performance of MSEs. Adopting mobile banking was found to likely improve MSEs' financial performance due to mobile banking's timeliness and reliability. The study recommends that MSEs fully adopt mobile banking services.
Analysis on Challenges Small Business Face in using the MBanking/Payment Serv...Dr. Amarjeet Singh
Mobile banking services are at the present
increasingly used to accomplish economic transactions by the
business people who would have followed long processes to
complete their transaction deals. Despite the importance of
mobile banking, several studies indicate that the industry still
faces challenges including lack of awareness among the
business parties and customers. Though large populations of
Kenyans have embraced the new technology in most of their
transactions, the contribution of the new technology on small
scale enterprises has received very little attention from the
scholars. The main purpose of this study was to identifying
and rank the challenges faced by the residents as they try to
embrace the mobile banking services. The study adopted a
survey design where data was collected from selected
respondents. The population of the study comprises of 730
small business enterprises. Simple random sampling technique
was used to select 88 small business enterprises based on 95%
confidence level and accepting 5% margin of error as
recommended for most business and social researches.
Primary data was collected from the respondents. Data was
analyzed by using statistical package for social sciences (SPSS)
and it was presented in the form of graphs, tables and charts.
Analysis of the data revealed that the highest challenge faced
by the business owners was the cost of transaction with a
cumulative percentage of 51.3 as compared with other
challenges.
This document summarizes a study that examined predictors of acceptance of 'Lipa na Mpesa' mobile payments by micro-entrepreneurs in Laikipia East Sub-County, Kenya. The study found that ease of use, perceived usefulness, and attitude towards usage highly influenced micro-entrepreneurs' intention to accept Lipa na Mpesa payments, with an 85% degree of variation. While many micro-entrepreneurs had signed up for the service, only about a quarter were actively using it. The researcher recommends maintaining the easy-to-use technology but further study is needed to understand the low attitude towards use despite initial signup.
Effect of Mobile Banking on Financial Performance of Commercial Banks in Kisi...paperpublications3
Abstract: Around half of the world’s population is out of formal banking and financial services. For this reason, several mobile payment trend studies have revealed the potential of mobile network technologies for payment purposes. The main objective of the study was to assess the effect of mobile banking to financial performance of commercial banks in Kisii Town, Kenya. The specific objectives of the study were to evaluate the effect of perceived security of mobile payments technology on financial performance of commercial banks in Kisii Town, to determine the effect of perceived ease of accessibility of mobile payments technology on financial performance of commercial banks in Kisii Town and to determine the effect of transaction cost of mobile payment technology on financial performance of commercial banks in Kisii Town. The study used a sample of 255 respondents which was drawn from Operation Managers, clients, cashiers and 7 M-Pesa paying agents. The data collected were analyzed by use of descriptive statistics and inferential statistics with the help of Social Sciences version 21 software. The study found out that, perceived cost, perceived access and perceived security of mobile payments technology have a significant influence on the financial performance of commercial banks. The study concluded that the transaction cost of mobile payment is cheap, mobile banking money can be sent any time of day; it saves time of travelling and that mobile banking transactions are processed in accordance with clients’ expectations besides providing evident of payment to another person.
Keywords: Craft, External equity, Financing, Growth, Microenterprise, Tabaka.
Title: Effect of Mobile Banking on Financial Performance of Commercial Banks in Kisii Town, Kenya
Author: Isabellah Mageto, Dr. Willy Mwangi Muturi, Dr. Vitalis Mogwambo Abuga
ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Paper Publications
In order to reduce cash handling cost of banks amongst other objectives, the Central Bank of Nigeria introduced the ‘cashless policy’. The success of this policy hinges on the adoption of alternative payment systems one of which is mobile banking. Thus it is imperative for policy makers and other relevant stakeholders to anticipate and deal with inhibitions surrounding the adoption of mobile banking by bank customers in the country. This study investigates the determinants of mobile banking adoption in Nigeria using a modified version of Technology Acceptance Model (TAM). This incorporates Perceived Risk, Facilitating Conditions and Demographic Characteristics (Age, Gender, Educational Qualification and Income) to Perceived Usefulness and Perceived Ease-of-Use as determinants of Mobile Banking Adoption. We also propose that this relationship is mediated by attitude towards mobile banking adoption. A total of 250 bank customers from the Lagos area were selected and a structured questionnaire was designed and copies distributed to them. Data was analysed using multiple regression and computed using SPSS 20.0 computer application. Results show that Perceived Usefulness, Perceived Ease-of-Use, perceived Risk, Facilitating Conditions, Age, Educational Qualifications and Income significantly determine Mobile Banking Adoption. However, the relationship between gender and Mobile Banking Adoption is not significant. The outcome of this study has some implications to m-banking policy formulation and implementation. It also throws more light into what should be done to improve mbanking adoption rate in Nigeria
Over the last decade, Africa has become a global leader in mobile money with the rate of smartphone adoption at twice the global scale. But what challenges is the industry facing and how can these be overcome? Our new article, sponsored by Mazars, explores.
Mobile money services have greatly expanded access to financial services in Kenya. M-Pesa, launched in 2007, allows users to store and transfer money via mobile phones. It now has over 17 million users, more than Western Union globally. M-Pesa led to the creation of mobile banking like M-Kesho. Crowdfunding apps and other mobile startups are creating opportunities. The government aims to achieve complete financial inclusion through initiatives that expand infrastructure like its new undersea fiber optic cable. Mobile innovations have helped lift many Kenyans out of poverty and driven progress towards the country's 2030 development goals.
Mobile banking has great potential to promote financial inclusion in Africa. By reducing geographic and cost barriers, mobile banking allows commercial banks to expand into new areas at low cost. Kenya and South Africa have been leaders in mobile banking, with services like M-Pesa in Kenya growing exponentially and bringing millions of unbanked individuals into the formal financial system. Partnerships between mobile operators, banks, and microfinance institutions can further expand access to affordable financial services across Africa through mobile phones.
The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
The papers for publication in The International Journal of Engineering& Science are selected through rigorous peer reviews to ensure originality, timeliness, relevance, and readability.
Mobile banking has grown in Nigeria in recent years as banks offer SMS banking, funds transfers, bill payments, and other services via mobile phones. However, the paper identifies several challenges to the operation of mobile banking in Nigeria, including insecure environments, interoperability issues between different mobile devices, unstable power and network infrastructure, and low financial literacy among many Nigerians. The paper proposes that Nigerian banks adopt a "non-bank led model" of mobile banking to make services more transformational and accessible to the unbanked, rather than just adding a new channel for existing customers. Future research is needed to address challenges like security, scalability, and expanding financial inclusion through mobile banking in Nigeria.
It is evident that financial services industry has been undergoing a profound transformation in Nigeria. Rapid changes in the banking environment, increased competition by new players from non-banking sector, product innovations, globalization and technological advancement-all these have led to a market situation in which the battle for consumers is intense. We look at the prospect and challenges of mobile banking services in Nigeria using four selected’ banks as case study, reviewed prior literatures on mobile banking, analyze the different factors that impact the market, and give direction for future research on this emerging field. A framework of four contingency and five competitive factors were proposed to facilitate the analysis. Factors affecting mobile services in Nigeria such interoperability, unstable power supply, network problems etc. were identified. Finally, we recommended that non–bank led model of mobile banking be adopted by Nigeria banks to make the services transformational instead of additives as is currently being practiced.
This document provides a summary of how three major mobile network operators in Indonesia - Telkomsel, Indosat, and XL - implemented mobile money interoperability between their platforms in just six months. The operators recognized that an interconnected mobile money system would allow customers to transfer funds across networks, strengthening the value proposition and increasing competitiveness in Indonesia's growing payments market. With support from new regulations enabling broader agent networks, the CEOs of the three operators began discussions in late 2012 and agreed to prioritize real-time account-to-account transfers across platforms. Each operator maintained technical independence while collaborating at high levels and through cross-functional teams to launch interoperability in May 2013.
STATE OF MOBILE BANKING IN TANZANIA AND SECURITY ISSUESIJNSA Journal
Mobile technology offers an unprecedented growth opportunity for banking industry in Tanzania. As the economy continues to prosper, increasingly affluent consumers and underbanked segments create demand for new financial products and services. Many consumers in Tanzania have mobile phones, but not bank accounts. Therefore, the mobile channel presents an effective way to connect them to the national financial grid. For the local banks, going mobile may increase banks opportunities to unlock the inherent potential of underbanked segments. This paper addresses the current state, future prospects, and security challenges to the usage of mobile banking in Tanzania.
State of mobile banking in tanzania andIJNSA Journal
This document summarizes the state of mobile banking in Tanzania. It discusses the key players in the mobile banking ecosystem including mobile network operators, banks, agents, merchants, and regulatory bodies. The four main mobile banking services in Tanzania are discussed: M-Pesa, Ezy-Pesa, AirtelMoney, and Tigo Pesa. M-Pesa has the largest market share at 53%. Security challenges with mobile banking are also covered, such as malware threats from downloads, messaging, and Bluetooth. Collaboration between players is important but also presents challenges around revenue sharing and strategic decision making.
There has been tremendous growth in mobile banking penetration in many countries in the developed and
developing economies and most interestingly in a number of developing countries such as Nigeria. Yet there are numbers of opportunities and threats in the mobile banking systems. However the major threat of mobile banking is its non-adoption by the banking customers. This research focuses on the perceived barriers to mobile banking adoption in Nigeria as a developing economy. The study adopted an exploratory qualitative method and this was conducted among banking customers spread across three regions of North, West and East of Nigeria. The basis of participants’ selection was being active customers of the Nigerian banks. Findings indicate that there is intention to adopt the mobile banking services; unfortunately, the
intentions cannot be translated into action due mainly to lack of trust on issues such as the delivery
channels/technology, communication infrastructures, government policies, etc. Findings further revealed
that majority of respondents do not use internet and mobile banking services, due to several identified
barriers. There is however a preference for the traditional banking approaches as opposed to the mobile
banking services. The study recommends that banks and other financial institutions embark on massive
awareness campaign.
Mobile money service as an opportunity for the growth of commercial banks in ...Alexander Decker
This document discusses mobile money services in Tanzania and their potential to promote financial inclusion and commercial bank growth. It finds that mobile money services have significantly expanded access to financial services for the previously unbanked in Tanzania by leveraging the widespread adoption of mobile phones. Studies cited show mobile money reduces transaction costs and improves access to payments, remittances, and other services. As most Tanzanians, including the unbanked, now have mobile phones, mobile money provides a platform to incorporate them into the formal financial system. This represents an opportunity for commercial banks to partner with mobile money providers to bank the unbanked and further their own growth.
TECHNOLOGICAL ADVANCES IN MICROFINANCE BANKS AND ECONOMIC GROWTH IN NIGERIAIAEME Publication
The study was designed to estimate growth implications of the intermediation activities of microfinance banks in Nigeria. The study covered the period 1992 to 2016. Model estimation was based on the technique of autoregressive distributed lag (ARDL) using data from the Central Bank of Nigeria statistical bulletin. Traditional intermediation functions of microfinance banks (deposit mobilization and credit creation) were adopted as explanatory variables while inflation and asset base were introduced as controlled variables. The result showed that while deposit mobilization significantly enhanced growth, microfinance banks’ loans and advances impeded the growth process.
This document summarizes a study on bankers' perceptions of electronic banking in India. The study had the following objectives: 1) To understand bankers' views on e-banking activities, 2) To analyze the impact of e-banking on banks, 3) To examine promotional measures used to promote e-banking, and 4) To assess bankers' views on how e-banking impacts relationships with customers and bank performance. The study reviewed previous literature which found that education, age, and gender influence e-banking adoption. It then described the research methodology which included collecting primary and secondary data from 220 bankers across public and private sector banks in India through questionnaires.
This document summarizes a study on bankers' perceptions of electronic banking in India. It discusses the objectives and methodology of the study, which surveyed 190 bankers about e-banking activities, impact, and promotion. Key findings include:
1) Most customers (54.74%) use e-banking services due to banker persuasion rather than own initiative. Middle-aged men ages 30-50 make greatest use of e-banking.
2) Bankers perceive e-banking has improved relationships with customers and overall bank performance. The majority felt satisfaction with e-banking customer retention rates.
3) The number of customers using e-banking is increasing, with 58.94% of
A study on banker's perception of electronic bankingRAVICHANDIRANG
Information and communication technologies have changed the working of the banking industry in the last few years. The
transformation is expected to quicken their pace in the coming years. The trend towards electronic delivery of products and
services is dramatically changing in the financial service industry, where the shift is partly as a result of consumer demand
but also a ruthless competitive environment. The present paper is an attempt to understand the use and benefits of e-Banking
from Bankers’ perspectives. This paper is the outcome of an empirical study with the objective of investigating bankers’
views regarding e-banking. It covers bankers’ perspectives on e-banking activities of respondents, impact of e-banking and
promotional measures used by banks to promote e-banking. The customers generally use e-Banking services on persuasion of
bankers. The bankers are convinced that e-banking helps in improving the relationship between bankers and customers and
that it will bring patent improvement in the overall performance of banks. So far as promotional avenues are concerned,
print media is at the top. The sources used from secondary level of data.
The study was designed to identify basic factors required to deepen adoption of
internet banking in the delivery of banking services to a rapidly growing market
characterized by complexities in service requirements. Analysis of data collected from
selected customers of 5 DMBs in Lagos, Ogun and Ebonyi States of Nigeria showed
that alternative service channels offered by technology-based applications enhanced
the delivery of banking services to bank customers. Specifically, the result showed
significant impact of ease of access, cost, reliability, and security/integrity of
technology-driven service delivery channels on the adoption of engineering
technology-based applications in Nigeria's banking industry.
The document discusses how financial technology (Fintech) has benefited various sectors like healthcare, agriculture, transportation, e-commerce, education, and retail in East African countries. It highlights how Kenya is recognized as the home of mobile money in East Africa, with many companies digitizing operations to enable digital payments. Fintech has grown significantly in Kenya and Rwanda, contributing to increased financial access, while countries like Somalia have opportunities to collaborate more with banks to gain broader market access. The growth and collaboration between banks and Fintech companies in providing digital financial services has boosted financial inclusion across East Africa.
Inhibitors and catalysts for Successful Mobile Services Growth in Africa: The...Tendai Marengereke
The document discusses mobile service growth in Kenya. It identifies supportive government policies, private sector investment, and technology incubators as key catalysts. Mobile networks also played a role by expanding infrastructure and lowering costs. A key reason for Kenya's success is its regulator allowing innovation to lead over strict regulation. The government created policies supporting competition and infrastructure sharing, which helped services grow and reach more populations.
Influence of Mobile Money on Transactions in Africa; Focus East AfricaKelvin Kizito Kiyingi
The rapid growth of mobile money in East Africa is a phenomenon which has few precedents in the region’s financial and banking history and has far reaching implications on transactions. Four main areas of focus: The history and growth of Mobile Money; The financial sector; Business; and Influence on transactions
The majority of the world population is not covered by the mainstream financial sector. As such, mobile money services are seen as a cost effective and efficient way of increasing financial inclusion. However, there remains some factors that impede the development of mobile money services. Therefore, this study sought to analyse these factors with a view to identifying strategies that can be used to accelerate the development of mobile money services.
The Innovation Africa Digital Summit in Zimbabwe highlighted the importance of affordable digital access across Africa. Over 350 delegates from 40 countries attended workshops and presentations on emerging technologies and business models. Key topics discussed included increasing connectivity through a combination of networks, developing relevant digital content, growing mobile commerce solutions, strengthening online communities, fostering a culture of collaboration, and building technical and entrepreneurial capacity through partnerships and investment.
M-Pesa in Kenya has significant network effects (it becomes more valua.docxhendriciraida
M-Pesa in Kenya has significant network effects (it becomes more valuable to participate as the number of people grows that use it) across several sides or dimensions. Select the side/dimension that is least dependent on the network effects of the M-Pesa. Explain your reasoning.
a. Average citizens
b. Farmers
c. Merchants
d. Kenyan Government
e. Employers
Solution
the M-pesa we means that the mobile payment service. it is introduced by the famous tele communication company the vodafone in recent years. this is the low cost service of the citizens to transfer their finance for simplicity. the service started initially for that the recievers of the micro finnce companys. this will the micro finance companys will offer more competitive loan rates for their users. the kenyns now use the M-pesa service for their financial transactions.many of the people are not available bank account but use the M-pesa services. now the recent studies shown that the M-pesa is the most successful story of the mobile banking services.
1.for the average citizens of the kenya used the mobile banking services the M-pesa for their finacial transaction. this shows that there was not used much of the technological knowledge for using the mobile banking services. they can easly transfer funds to one another. for all citizns of the country are aware for the usage of the M-pesa services. this is the most important key the success of the M_pesa
2.the kenyan government introduced the M_pesa service sfor the poor people of the country. the usage smplicity of the M- pesa service will access all the people of the country. the farmers are not well advenced to use the modern technology. but this service will help them to transfer of funds very easly.
3.for the payment of the E-cash the merchants also developed their own way. the easy transfer of funds will help them to develp thei business very smoothlky. they can easly acccesible the loan amount very eassly
4.the biggest achievers of the service the M-pesa is that of the governments of the country. they can support the service now the one of the important business services.they can access the services. the government now introduce the E-government services fopr their citizens.
5. another achivers for the M-pesa services is that the employees. they can get their payment for veary easly. they all can use the E-services and they can easly convert the amount of money very accuratly.
.
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The International Journal of Engineering & Science is aimed at providing a platform for researchers, engineers, scientists, or educators to publish their original research results, to exchange new ideas, to disseminate information in innovative designs, engineering experiences and technological skills. It is also the Journal's objective to promote engineering and technology education. All papers submitted to the Journal will be blind peer-reviewed. Only original articles will be published.
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Mobile banking has grown in Nigeria in recent years as banks offer SMS banking, funds transfers, bill payments, and other services via mobile phones. However, the paper identifies several challenges to the operation of mobile banking in Nigeria, including insecure environments, interoperability issues between different mobile devices, unstable power and network infrastructure, and low financial literacy among many Nigerians. The paper proposes that Nigerian banks adopt a "non-bank led model" of mobile banking to make services more transformational and accessible to the unbanked, rather than just adding a new channel for existing customers. Future research is needed to address challenges like security, scalability, and expanding financial inclusion through mobile banking in Nigeria.
It is evident that financial services industry has been undergoing a profound transformation in Nigeria. Rapid changes in the banking environment, increased competition by new players from non-banking sector, product innovations, globalization and technological advancement-all these have led to a market situation in which the battle for consumers is intense. We look at the prospect and challenges of mobile banking services in Nigeria using four selected’ banks as case study, reviewed prior literatures on mobile banking, analyze the different factors that impact the market, and give direction for future research on this emerging field. A framework of four contingency and five competitive factors were proposed to facilitate the analysis. Factors affecting mobile services in Nigeria such interoperability, unstable power supply, network problems etc. were identified. Finally, we recommended that non–bank led model of mobile banking be adopted by Nigeria banks to make the services transformational instead of additives as is currently being practiced.
This document provides a summary of how three major mobile network operators in Indonesia - Telkomsel, Indosat, and XL - implemented mobile money interoperability between their platforms in just six months. The operators recognized that an interconnected mobile money system would allow customers to transfer funds across networks, strengthening the value proposition and increasing competitiveness in Indonesia's growing payments market. With support from new regulations enabling broader agent networks, the CEOs of the three operators began discussions in late 2012 and agreed to prioritize real-time account-to-account transfers across platforms. Each operator maintained technical independence while collaborating at high levels and through cross-functional teams to launch interoperability in May 2013.
STATE OF MOBILE BANKING IN TANZANIA AND SECURITY ISSUESIJNSA Journal
Mobile technology offers an unprecedented growth opportunity for banking industry in Tanzania. As the economy continues to prosper, increasingly affluent consumers and underbanked segments create demand for new financial products and services. Many consumers in Tanzania have mobile phones, but not bank accounts. Therefore, the mobile channel presents an effective way to connect them to the national financial grid. For the local banks, going mobile may increase banks opportunities to unlock the inherent potential of underbanked segments. This paper addresses the current state, future prospects, and security challenges to the usage of mobile banking in Tanzania.
State of mobile banking in tanzania andIJNSA Journal
This document summarizes the state of mobile banking in Tanzania. It discusses the key players in the mobile banking ecosystem including mobile network operators, banks, agents, merchants, and regulatory bodies. The four main mobile banking services in Tanzania are discussed: M-Pesa, Ezy-Pesa, AirtelMoney, and Tigo Pesa. M-Pesa has the largest market share at 53%. Security challenges with mobile banking are also covered, such as malware threats from downloads, messaging, and Bluetooth. Collaboration between players is important but also presents challenges around revenue sharing and strategic decision making.
There has been tremendous growth in mobile banking penetration in many countries in the developed and
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channels/technology, communication infrastructures, government policies, etc. Findings further revealed
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barriers. There is however a preference for the traditional banking approaches as opposed to the mobile
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Mobile money service as an opportunity for the growth of commercial banks in ...Alexander Decker
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TECHNOLOGICAL ADVANCES IN MICROFINANCE BANKS AND ECONOMIC GROWTH IN NIGERIAIAEME Publication
The study was designed to estimate growth implications of the intermediation activities of microfinance banks in Nigeria. The study covered the period 1992 to 2016. Model estimation was based on the technique of autoregressive distributed lag (ARDL) using data from the Central Bank of Nigeria statistical bulletin. Traditional intermediation functions of microfinance banks (deposit mobilization and credit creation) were adopted as explanatory variables while inflation and asset base were introduced as controlled variables. The result showed that while deposit mobilization significantly enhanced growth, microfinance banks’ loans and advances impeded the growth process.
This document summarizes a study on bankers' perceptions of electronic banking in India. The study had the following objectives: 1) To understand bankers' views on e-banking activities, 2) To analyze the impact of e-banking on banks, 3) To examine promotional measures used to promote e-banking, and 4) To assess bankers' views on how e-banking impacts relationships with customers and bank performance. The study reviewed previous literature which found that education, age, and gender influence e-banking adoption. It then described the research methodology which included collecting primary and secondary data from 220 bankers across public and private sector banks in India through questionnaires.
This document summarizes a study on bankers' perceptions of electronic banking in India. It discusses the objectives and methodology of the study, which surveyed 190 bankers about e-banking activities, impact, and promotion. Key findings include:
1) Most customers (54.74%) use e-banking services due to banker persuasion rather than own initiative. Middle-aged men ages 30-50 make greatest use of e-banking.
2) Bankers perceive e-banking has improved relationships with customers and overall bank performance. The majority felt satisfaction with e-banking customer retention rates.
3) The number of customers using e-banking is increasing, with 58.94% of
A study on banker's perception of electronic bankingRAVICHANDIRANG
Information and communication technologies have changed the working of the banking industry in the last few years. The
transformation is expected to quicken their pace in the coming years. The trend towards electronic delivery of products and
services is dramatically changing in the financial service industry, where the shift is partly as a result of consumer demand
but also a ruthless competitive environment. The present paper is an attempt to understand the use and benefits of e-Banking
from Bankers’ perspectives. This paper is the outcome of an empirical study with the objective of investigating bankers’
views regarding e-banking. It covers bankers’ perspectives on e-banking activities of respondents, impact of e-banking and
promotional measures used by banks to promote e-banking. The customers generally use e-Banking services on persuasion of
bankers. The bankers are convinced that e-banking helps in improving the relationship between bankers and customers and
that it will bring patent improvement in the overall performance of banks. So far as promotional avenues are concerned,
print media is at the top. The sources used from secondary level of data.
The study was designed to identify basic factors required to deepen adoption of
internet banking in the delivery of banking services to a rapidly growing market
characterized by complexities in service requirements. Analysis of data collected from
selected customers of 5 DMBs in Lagos, Ogun and Ebonyi States of Nigeria showed
that alternative service channels offered by technology-based applications enhanced
the delivery of banking services to bank customers. Specifically, the result showed
significant impact of ease of access, cost, reliability, and security/integrity of
technology-driven service delivery channels on the adoption of engineering
technology-based applications in Nigeria's banking industry.
The document discusses how financial technology (Fintech) has benefited various sectors like healthcare, agriculture, transportation, e-commerce, education, and retail in East African countries. It highlights how Kenya is recognized as the home of mobile money in East Africa, with many companies digitizing operations to enable digital payments. Fintech has grown significantly in Kenya and Rwanda, contributing to increased financial access, while countries like Somalia have opportunities to collaborate more with banks to gain broader market access. The growth and collaboration between banks and Fintech companies in providing digital financial services has boosted financial inclusion across East Africa.
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The document discusses mobile service growth in Kenya. It identifies supportive government policies, private sector investment, and technology incubators as key catalysts. Mobile networks also played a role by expanding infrastructure and lowering costs. A key reason for Kenya's success is its regulator allowing innovation to lead over strict regulation. The government created policies supporting competition and infrastructure sharing, which helped services grow and reach more populations.
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The rapid growth of mobile money in East Africa is a phenomenon which has few precedents in the region’s financial and banking history and has far reaching implications on transactions. Four main areas of focus: The history and growth of Mobile Money; The financial sector; Business; and Influence on transactions
The majority of the world population is not covered by the mainstream financial sector. As such, mobile money services are seen as a cost effective and efficient way of increasing financial inclusion. However, there remains some factors that impede the development of mobile money services. Therefore, this study sought to analyse these factors with a view to identifying strategies that can be used to accelerate the development of mobile money services.
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M-Pesa in Kenya has significant network effects (it becomes more valua.docxhendriciraida
M-Pesa in Kenya has significant network effects (it becomes more valuable to participate as the number of people grows that use it) across several sides or dimensions. Select the side/dimension that is least dependent on the network effects of the M-Pesa. Explain your reasoning.
a. Average citizens
b. Farmers
c. Merchants
d. Kenyan Government
e. Employers
Solution
the M-pesa we means that the mobile payment service. it is introduced by the famous tele communication company the vodafone in recent years. this is the low cost service of the citizens to transfer their finance for simplicity. the service started initially for that the recievers of the micro finnce companys. this will the micro finance companys will offer more competitive loan rates for their users. the kenyns now use the M-pesa service for their financial transactions.many of the people are not available bank account but use the M-pesa services. now the recent studies shown that the M-pesa is the most successful story of the mobile banking services.
1.for the average citizens of the kenya used the mobile banking services the M-pesa for their finacial transaction. this shows that there was not used much of the technological knowledge for using the mobile banking services. they can easly transfer funds to one another. for all citizns of the country are aware for the usage of the M-pesa services. this is the most important key the success of the M_pesa
2.the kenyan government introduced the M_pesa service sfor the poor people of the country. the usage smplicity of the M- pesa service will access all the people of the country. the farmers are not well advenced to use the modern technology. but this service will help them to transfer of funds very easly.
3.for the payment of the E-cash the merchants also developed their own way. the easy transfer of funds will help them to develp thei business very smoothlky. they can easly acccesible the loan amount very eassly
4.the biggest achievers of the service the M-pesa is that of the governments of the country. they can support the service now the one of the important business services.they can access the services. the government now introduce the E-government services fopr their citizens.
5. another achivers for the M-pesa services is that the employees. they can get their payment for veary easly. they all can use the E-services and they can easly convert the amount of money very accuratly.
.
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2. Ann Kalei et al.
International Journal of Managerial Studies and Research (IJMSR) Page | 86
mobile telephones to manipulate their bank accounts, store value in an account linked to their
handsets, transfer funds or even access credit or insurance products. The first targets for these
applications were consumers in the developed world. By complementing services offered by the
banking system, such as cheque books, automated teller machines (ATMs), voicemail/landline
interfaces, smart cards, point-of-sale networks, and internet resources, the mobile platform offers a
convenient additional method for managing money without handling cash ( Karjaluoto H, 2002).For
users in the developing world, the appeal of these m-payments systems may be less about
convenience and more about accessibility and affordability (Cracknell, 2004; info DEV, 2006). This
is done through M-PESA which is a small-value electronic payment and store of value system that is
accessible from ordinary mobile phones to customers registered at authorized M-PESA retail outlets.
Limuru town is in Kiambu County, central Kenya with a population of about 4800 people. Limuru is a
town located on the eastern edge of the Great Rift Valley about 30km North-West from Nairobi the
capital city of Kenya. Limuru residents rely mostly on farming and BATA shoe factory for
employment. Early in the British colonial period Europeans settled in the area due to its proximity to
Nairobi, the railway line, its fertile land and pleasant weather. Most of the area of Limuru is what was
previously known as "the white highlands", a rich agricultural land just south of the equator. Limuru
has an average temperature range about of 28 °C year round, and it is widely-known in Kenya for the
large amounts of tea it produces. The influx of workers in the tea farms and the factories available has
led to flourishing of many micro businesses in the town to meet the needs of these workers who are
mainly low income earners. The availability of these micro businesses creates a firm foundation upon
which this study can be undertaken.
2. STATEMENT OF THE PROBLEM
According to Central Bureau Statistics, Kenya has over 7 Million people employed in the informal
sector, which has translated to about 19% of the total Kenyan population (CBS 2005). This sector has
continuously experienced growth, and becoming a key sector in the economy of the country, creating
most of the new jobs in Kenya. It has resonated to be a key pillar towards poverty alleviation as well
as raising the standards of living of the people. According to Malick (2004) Kenya‘s informal sector
constitutes 98% of all businesses in the country, absorbing a high population of school, college and
university leavers. According to the Baseline Survey of 2006, the number has grown to 1.8million
from 910,000 in 1993.
According to Haans (2001) the informal sector is segmented into three. The smallest segment is the
Income-Generating Activities (IGAs) which is the most predominant type of informal businesses. It
consist seasonal trading and hawking, keeping domestic animals, and many traditional craft activities,
especially in rural areas. The second segment of the micro-enterprises has businesses that are slightly
bigger than IGAs, which includes small shops, metal working, carpentry, tailoring, and various forms
of repair services. They operate with a few family workers, apprentices with one or a few permanent
workers. Their technology is a mix of traditional and modern methods. Their market is limited since
they serve local and nearby markets. They are found in larger villages, rural towns and regional
centers. The third segment comprises the Small enterprises (SMEs). These are firms with roughly 10
to 20 workers that are at the boundary between formal and informal sector. They use non-traditional
technology in the production process. Their products and services range from simple to complex and
similarly span a range of consumer types. They are usually registered with the local government and
hence they pay taxes. SEs are more urban than rural-based and good examples of small enterprises
include, saw mills, garment assembly, motorized transport, building & construction and medium-scale
industrial agro-processing.
The emergence of M-PESA, a text messaging service (SMS) provide the solution to small businesses
banking needs and majority of the Kenyan population. This is because the majority of Kenyans don't
hold bank accounts but they do have the services of a mobile phone, hence they could settle bills by
building up credit on the mobile phones and then sending a text (SMS) to make a payment. The
leading mobile service providers in Kenya have introduced some money transfer services whose
objective is to enable Kenyans to make 'micro payments' using their mobile phones. This saves time
that could have been spent at the long queues in the bank. The service enables subscribers to use their
mobile phones to carry out transactions such as pay for goods and services, pay utility bills, send to
and receive money from friends and relatives, withdraw cash for their use, top up their own airtime
account or top up someone else's account and manage their own accounts. The use of mobile
3. Acceptance of M-Pesa Service and its Effect on Performance of Small and Micro-Businesses in Kenya
International Journal of Managerial Studies and Research (IJMSR) Page | 87
payment technology requires basic knowledge to operate and hence majority of micro business
operators are able to employ this technology in the daily business operations. These services are
supposed to provide an e-commerce platform of choice in a country where credit cards have struggled
to reach most the population without the bank accounts.
The government has encouraged the Kenyan population to join the information superhighways, to
make them competitive and have a global reach, penetrate more markets and access information from
different sources. As a result Small and Medium Enterprises (SME‘s) in the less developed world are
increasingly deploying the use of mobile payments to enhance the quality of their services and
increase growth. The rate of transformation in the SME sector has speeded up with more small
businesses realizing the potential of using the mobile payments in service delivery. However, there
are only a handful of studies focusing directly on the effect of M-money transfer on the performance
of small and medium business sector in Kenya. This study therefore, investigates the acceptance of
M-PESA service and the effect of this service on the performance of SME‘s in Kenya.
3. OBJECTIVES OF THE STUDY
The general objective of the study was to investigate the use of M-PESA service by small and micro
enterprises in Kenya. The study was guided by the following specific objectives.
To identify the determinant of the acceptance of mobile money transfer
To determine whether acceptance of M-PESA service has significant effect on the performance of
small and micro-business in Kenya.
To establish the major constraints facing micro- business owners when using M-PESA) service
The findings of this research would be useful to the Mobile Network Operators (MNOs) in creating
services that consumers want to use, or help them discover why potential users avoid using the
existing system. Small business owners can use the study to educate themselves on the reason why m-
banking would be important to them. Finally, scholars and other researchers may wish to use the
findings of this research to carry out further research.
4. THEORETICAL LITERATURE
4.1.Perceived Ease of use
This is the degree to which a person believes that using a particular system will be free of
effort‖(Davis, 1989). In mobile money transfer, it includes registration procedures, ease of use of the
payment procedure, easy access to customer services, minimal steps required to make a payment,
appropriate screen size and input capabilities. Also, the availability of the mobile money transfer
agents will increase the perceived ease of use. Furthermore, it should be accessible on mobile phones
with the most basic features and software. Prior researches have concluded that perceived ease to use
is a key determinant to consumer behavioral intentions (Venkatesh & Davis, 1996, 2000; Venkatesh
& Morris, 2003, Pousttchi & Wiedemann, 2005). In order to prevent the ‗‗under-used‘‘ system
problem, Mobile money transfer system must be both easy to learn and easy to use.
4.2.Social Influence
Social influence is defined as the degree to which an individual perceives that important others
believe he or she should use the new system. The working members of the society, usually located in
the urban areas, needs an inexpensive but reliable method of sending money to their unemployed
relatives back in the villages (Manica and Vescovi, 2009). A large percentage of the old, the poor, the
unemployed and young adults depend on the employed relatives for financial support. The early
adopters of mobile money are young urban workers who would want to transfer money to their
relatives living in rural areas. However, in order to receive the money, the receiver, typically an
illiterate resident in rural Kenya, also need to have an M-PESA account. Normally, these illiterate
rural residents are considered the laggards, and are expected to be the last adopters of any new
technology. However, in order to cash the money, they must be registered and finally they end up
joining the technology band wagon.
4.3.Facilitating Conditions
Facilitating conditions are defined as the degree to which an individual believes that organizational
and technical infrastructure exists to support use of the system. The extent to which the mobile
4. Ann Kalei et al.
International Journal of Managerial Studies and Research (IJMSR) Page | 88
payment usage would be adopted largely depends on whether there is an enabling environment
(Porteous, 2006). According to Porteous (2009) an enabling environment is a set of conditions which
promote a sustainable trajectory of market development. Of particular interest are the environments in
which widespread access is likely. M-PESA has widespread access and requires an enabling
environment to enhance the success of its consumers. The micro businesses are spread throughout the
country with huge clusters in the market areas and near shopping centers. This enables them to easily
access the M-PESA service providers for registration and to make cash deposits into their accounts.
The mobile payment providers‘ agents are well distributed and easily accessible to the micro business
owners for support of their services in Kenya. The service provider together with the regulatory
authority are responsible for the creation of this enabling environment. According to Omwasa, (2009)
the transaction costs of sending money through the mobile payment technology are lower than those
of banks and money transfer companies. The cost of a payment transaction has a direct effect on
consumer adoption if the cost is passed on to customers (Mallat, 2007). Transaction costs should be
low to make the total cost of the transaction competitive. The cost of the mobile payments should be
affordable to most of the micro business operators and far below what the banks normally charge for
their bank transactions. M‐PESA pricing is made transparent and predictable for users. There are no
customer charges for the SMSs that deliver the service, and instead fees are applied to the actual
customer who initiated transactions. All customer fees are subtracted from the customer‘s account,
and outlets cannot charge any direct fees. Thus, outlets collect their commissions from Safaricom
rather than from customers. This reduces the potential for agent abuses. Customer fees are uniform
nationwide, and they are prominently posted in all outlet locations in the poster for all to view.
M‐PESA chose to specify its fees in fixed currency terms rather than as a percentage of the
transaction. This makes it easier for customers to understand the precise cost of each transaction and
helps them think of the fee in terms of the transaction‘s absolute value. It also helps them compare the
transaction cost against alternatives such as the matatu fare plus travel time. It is worthy to note that
M‐PESA has maintained the same pricing for transactions in its first three years, despite the
significant inflation experienced during the period. In her field research, Olga Morawczynski finds
that sending KShs 1,000 through M‐PESA is 27% cheaper than the post office‘s Posta Pay, and 68%
cheaper than sending it via a bus company. Morawczynski and Pickens (2009)
4.4.Trust/Security
Mobile phone balances may seem low, but this proves that there is storage which can be perceived as
acceptance of deposits (Njenga, 2009). This is a significant indication of the high value placed on the
convenience associated with the use of the mobile payment services. According to Omwansa (2009)
a lost or stolen mobile phone does not mean catastrophe as no one can access an M-PESA account
without a correct personal identification number (PIN). He further explains that in a country where
majority of people have no bank accounts, M-PESA provides both convenience and safety. People
walk around with their virtual money knowing they can withdraw cash any time at a minimal fee.
Trust/security is a facilitating condition which is created by the enabling environment. Once trust is
created in mobile money transfer system, the conservative members of the society who are risk averse
join the technology bandwagon due to lowered risks creating a ―tornado effect‖ in the actual usage of
the service.
Many theories have been used for the last two decades to explain possible consumer behavior on
adoption and acceptance patterns of new technologies and innovations. They include: Davies‘ (1989)
technology acceptance model In Information Systems literature by Roger‘s (1991), innovation
diffusion theory (IDT) by Davies‘ (1989), technology acceptance model by Davis (1989), the theory
of planned behaviour by Azjen (1977) and the unified theory of acceptance and use of technology
(UTAUT) by Venkatesh et al. (2003). Several researchers have sought to develop constructs that
affect consumers‘ behaviour when deciding on the adoption of mobile services by applying these
existing information system theories and models (Wu and Wang, 2005; Hung et al, 2004; Bouwman
et al, 2007). This research will mix the Technology Acceptance Model (TAM) and the Unified Theory
of Acceptance and use of Technology (UTAUT) to explain how M-PESA technology has been
adopted in Kenya. Analyzing M-PESA using the above theories, one would know whether M-Pesa
has significant on the SMEs performance in Kenya. This is the only way to establish whether it
represents a true innovation, introducing a significant departure from the traditional ways of paying
for goods/services purchased.
5. Acceptance of M-Pesa Service and its Effect on Performance of Small and Micro-Businesses in Kenya
International Journal of Managerial Studies and Research (IJMSR) Page | 89
Conceptual Framework
5. RESEARCH METHODOLOGY
The study adopted a survey design, and the population of interest comprised owners and staff working
in the 7 million small and micro enterprises in Kenya. A sample of 1230 respondents was used, and
was determined using the formula proposed by Saunders et al, (2007 p.g 214): n a
=
%
100
re
nX
, where:
n a
= the actual sample size required, n = minimum (or adjusted minimum) sample size, re% = the
estimated response rate expressed as a percentage. In line with many studies in business management,
a level of confidence of ninety five percent, which corresponded with z = 1.96 was assumed.
Assuming that 80% of Kenyan business are small scale in size while only 20% are large in size. Thus,
the minimum sample size was computed as follows: n= p% x q% x
2
%
e
z
, where: n = minimum
sample size required, p% = proportion belonging to the specified category, q% = proportion not
belonging to the specified category, z = z value corresponding to the level of confidence required
while e% = margin of error required. Thus, n= 20 x 80 x
2
5
96
.
1
which was equal to 246.4. This had
to be adjusted to 246.38 according to the target population of 3,424,000 using the formula provided by
Saunders et al, (2007 p.g 586) where, n‘=
N
n
n
1
. In this formula, n‘= the adjusted minimum
sample size, n= the minimum sample size, and N= the target population. The computed adjusted
minimum sample was substituted into the formula used to determine the actual sample size in the
previous page. Expecting a response rate of 20 percent, the actual sample size of 1230 respondents
was arrived at. Questionnaires were distributed to randomly selected sample of micro- business
enterprises within the town. The questionnaire included both open-ended and closed questions. The
open ended questions encouraged the respondents to express their views while the closed questions
will gave the respondents a chance to express their opinions and give the researcher a chance to get
specific responses towards the research. The questions were simplified to enable the respondents
complete them with ease. The questionnaire included the construct items adapted from previous
studies (Davis, 1989; Venkatesh and Bala, 2008) modified to meet the needs of the study.
Data was analyzed using quantitative statistics. To address objectives (i) ANOVA test done to
indicate whether there was any difference between means while regression analysis was used to show
whether the acceptance of the M-PESA services has significance effect on the firm performance. The
explanatory variables are: 1
X = perceived ease of use, 2
X = Social influence, 3
X = Facilitating
means, 4
X = Trust/security of transactions
6. Ann Kalei et al.
International Journal of Managerial Studies and Research (IJMSR) Page | 90
The identified variables for the ANOVA analysis are specified as follows:
Independent Variable How obtained Description
M-pesa acceptance
1
X perceived ease of use
Respondents rated their acceptance using a
scale using a scale of 1-5
Respondents rated the degree to which
they believed that using m-pesa system
helped him/her to attain gains in the
execution of his duties.
Acceptance=1 if high and
acceptance=0 if low
Perceived as easy to use =1 if high
and Perceived as easy to use =0 if
low
2
X Social influence Respondents indicated whether they were
socially influenced or not
Socially influenced =1 if influenced
and socially influenced =0 if not
influenced
3
X Facilitating
means conditions
Respondents rated the Facilitating means
conditions using (likert scale of 1-7)
Facilitating means conditions = 1
good and facilitating conditions = 0
if bad
4
X Trust/security Respondents rated the security of M-PESA
transactions
Trust/security= 1 if good and
Trust/security= 0 if not good
Objective (ii) was addressed by use of a regression analysis, which was based on the following
equation:
i
i
i
i
i
i
i
i u
X
X
X
X
X
X
X
Y
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
Where:Y = Y= Annual Sales
1
X = acceptance of m-pesa, 2
X = capital investment 3
X , =years of experience in business, 4
X =
owners education, 5
X = business location, 6
X ,= nature of the business, 7
X = promotion expenditure
Independent Variable How obtained Description
Acceptance of M-pesa Respondents rated their acceptance of m-
pesa
Acceptance=1 if high and
acceptance=0 if low
Capital investment Respondents indicated the approximate
amount inested
Amount in Kenya Shillings
Experience in business Respondents indicated the period for
which they have been running the
business
Number of years
Owners education Respondents indicated the number of
years they have spent in school
Business location Respondents indicated where their
business is located
If town centre= 1and 0= not at the
center
Nature of the business-
industrial goods
Respondents indicated the nature of
business depending on what was sold.
Consumer goods= 1 and 0=
industrial goods
Promotion budget Respondents approximated the amount
they spend to attract customers
Amount in shillings
Objective (iii) was addressed by asking the M-PESA users and the agents whether they had challenges
when using the service. The questions addressed were related to system failure, security and fraud
related activities and facilitation of use by Safari Company, mainly provision of electronic float
money to the agents.
6. RESULTS
Analysis of Variance
Source SS Df MS F P-value
Perceived ease of use Between groups 617.145 1 617.145 160.97 0.000
Within groups 473.064 1228 0.385
Total 1090.209 1229
Social Influence Between groups 7.357 1 7.357 9.942 0.0130
Within groups 909.90 1228 0.740
Total 917.257 1229
Facilitating Conditions Between groups 510.06 1 510.06 1882.14 0.000
Within groups 333.14 1228 0.271
Total 843.2 1229
Trust/Security Between groups 40.725 1 40.725 81.080 0.000
Within groups 617.488 1228 0.50228
Total 658.213 1229
7. Acceptance of M-Pesa Service and its Effect on Performance of Small and Micro-Businesses in Kenya
International Journal of Managerial Studies and Research (IJMSR) Page | 91
The results for the perceived ease to use were: F(1, 1228) = 160.97 and p-value = 0.000. Thus, there
was a significant difference in the acceptance of M-Pesa by traders who reported different degrees of
perceived ease of use. Results for social influence were F(1, 1228) = 9.942 and p-value = 0.0130,
there was a significant difference in the average acceptance of M-Pesa by traders who reported
different degrees of social influence. Results for facilitating means conditions were F(1, 1228) =
1882.14 and p-value = 0.000,an indication that there was a significant difference in the average
acceptance of M-Pesa by traders who reported different ratings of facilitating means conditions. There
was a significant difference in the average acceptance of M-Pesa by traders who reported different
ratings of Trust/Security of the system, F(1, 1228) = 81.080 and p-value = 0.000.
Regression Analysis
Linear regression No.obs = 1230
F( 6, 1223) = 312.29
Prob > F = 0
R-squared = 0.832
Adj R-Squaired 0.819
Root MSE = 0.380
Coef. Std.Err t P>t [95%]
Acceptance of M-pesa 0.198 0.0254 3.88 0.001
Capital investment 1.271 0.047 27.28 0.000
Experience in business 0.653 0.022 -29.54 0.000
Owners education 0.266 0.023 11.63 0.000
Business location-town center 0.140 0.031 4.72 0.000
Nature of the business 0.108 0.036 2.81 0.005
Promotion budget 0.113 0.030 3.767 0.000
_cons 1.1003 0.0961 10.49 0.000
The Results indicates that, R-squared is equal to 0.832 while adjusted R-squared is equal to 0.819.
This implies that there is high degree of goodness of fit of the regression model. It also means that
over 81% of variation in the dependent variable (the amount of sales as indicator of business
performance) can be explained by the regression model. The F test result was F( 7, 1221) 312.29,
with a significance of 0.000. Consequently, the hypothesis that all regression coefficients in the model
are zero is rejected. Therefore, a significant relationship was present between the amount of annual
sales and the explanatory variables in the regression model. RMSE which is the square root of the
variance of the residuals or the standard deviation of the unexplained variation was 0.380. This was
low given that it is below 0.500, which was an indication that there is high degree of goodness of fit
of the regression model. All the explanation variables had positive and significant effect on the
performance of the business.
The other area of interest was to investigate the outstanding challenges facing M-PESA and possible
solutions. 46.6% of the respondents indicated that they had no complaints with the M-PESA service.
This suggests that almost half of the respondents are satisfied by the service. However, the rest made
various complaints and suggestions.
One of key challenges was the frequent system failure. The access to the M-PESA services is at times
impossible. This was because of poor network reception, frequent power outages and overloaded
Safaricom‘s central servers. Further, the respondents complained of slow service at peak times.
Security and fraud related activities were also identified as a challenge. The first was the security of
the M-PESA money remittance message, which is usually not password protected. This meant that
anybody who obtains possession of the phone could read the message and see all the financial
transactions of the phone owner. This is a security and privacy risk and should be changed such that it
can only be accessed by using the owner‘s password. It was not unusual for family members,
roommates and work colleagues to have access to someone‘s phone, hence the need for protecting the
M-PESA money remittance message.
The second security related challenge was sending money to the wrong recipient. The system did not
have feedback to confirm that the number that the user had entered indeed belonged to the intended
recipient. It was often a common mistake for an individual to send money to the wrong number by
confusing one of the digits or sometimes names. This becomes more important when one also
considers the relatively high level of illiteracy. Money sent to the wrong number was hard to recover
9. Acceptance of M-Pesa Service and its Effect on Performance of Small and Micro-Businesses in Kenya
International Journal of Managerial Studies and Research (IJMSR) Page | 93
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AUTHORS’ BIOGRAPHY
Dr. Ann Kalei, is currently lecturing Business Management at Mt Kenya University, Eldoret Nairobi
Kenya. She made contributions to this article when teaching MBA students at the Presbyterian
University of East Africa. Her other research work is on Kenyan job market.
Dr. Hannah Wambugu, is currently lecturing Marketing Management at Kirinyaga University
College, a constituent College of Jomo-Kenyatta University of Science and Technology in Nairobi,
Kenya. She has written a lot about consumer behavior towards products/services from different
industries in Kenya. Much of her research work can be found in reputable journals such as European
Journal of Business and Management and International of Economics, Commerce and Management.
Mr Peter Githae, made his contributions to this article when he was doing his research project for his
MBA at Presbyterian University of East Africa, Nairobi Kenya