Mobile Banking Services and Profitability of Deposit Taking Saccos in Vihiga County, Kenya
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Date
2024-06
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International Academic Journal of Economics and Finance
Abstract
evelopment an economy. This is achieved by
financial performance that is measured using
profitability that serves a critical role in the
financial markets and in general the entire
economy. Nevertheless, their contributions
may be hindered by issues related to financial
viability. According to the 2022 CBK report,
the SACCOs in Vihiga County had a varied
performance in the period ending on
December 31, 2021. As of December 31,
2021, the Sacco's recorded a pre-tax loss of
Ksh.339million, which is a decrease from the
loss of Ksh.1.4billion reported on December
31, 2020, and a significant decline from the
profit of Ksh.118 million in 2019. The
performance of this investment resulted in a
5% return on assets in 2017, followed by a -
2% return in 2018, a -4.1% return in 2019, a -
5.3% return in 2021, and a -0.6.9% return in
2022. Hence, this research aimed to ascertain
the impact of mobile banking services on the
profitability of SACCOS in Vihiga County,
Kenya. The primary goals are to determine the
impact of mobile money transfer, mobile
account management, mobile credit
facilitation, and mobile bill presentment on
the profitability of SACCOs in Vihiga
County. The research was informed by the
intermediation theory, diffusion of innovation
theory, theory of technological acceptability
model, and the task technology fit theory. A
descriptive research approach was utilized.
The intended demographic for this project
consisted of 125 individuals who were part of
the 12 officially recognized SACCOS in the
County. The research used a stratified
sampling approach to determine a sample size
of 95 individuals. These individuals were
selected utilizing simple random selection
from each stratum. The researcher gathered
primary data via the use of semi-administered
questionnaires that included both open-ended
and closed-ended questions. The analysis
employed descriptive statistics such as
standard deviation, means, frequencies, and
percentages. Conversely, inferential statistics
was employed to determine the correlation
between the variables being studied. The
multiple regression analysis model was
utilized. Multicollinearity, normality and
heteroscedasticity were tested to test for the
violation of regression equation. Frequency
tables were utilized in quantitative data
presentation. The ethical consideration was
adhered to throughout the study period. The
study showed that mobile money transfer,
mobile account management and mobile bill
presentment, all had the significance
threshold of p<0.05 hence all had statistically
significant effect on profitability of DTS in
Vihiga County, Kenya. On the other hand
mobile credit facilitation was statistically
insignificant with p>0.05 The study
concluded that popular of the responders
established to abundant magnitude with the
fact that mobile money transfer, mobile
account management and mobile bill
presentment indeed affected the profitability
of DTS. The study recommended the effective
utilization of bank to mobile transfer, bank to
bank transfer and mobile to mobile transfer to
help improve the profitability of DTS. It
equally recommends the effective utilization
of mobile account statements, transaction
authorization and balance inquiries that would
help to improve on the profitability of DTS.
Additionally, it recommends for the effective
utilization of utility bills management, till
number payments and paybill payments that
contribute to improved performance of DTS
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Citation
Ayugu, J. A., Mutswenje, V. S. (2024). Mobile banking services and profitability of deposit taking saccos in Vihiga County, Kenya. International Academic Journal of Economics and Finance, 4(1), 324-339