Digital Financial Services and Profitability of Microfinance Banks in Kenya
| dc.contributor.author | Kimalit, Betty Jepkorir | |
| dc.contributor.author | Musau, Salome | |
| dc.date.accessioned | 2025-10-15T12:57:11Z | |
| dc.date.available | 2025-10-15T12:57:11Z | |
| dc.date.issued | 2024-11 | |
| dc.description | Article | |
| dc.description.abstract | This study's primary intent was to ascertain how digital financial services influenced Kenyan microfinance banks performance in terms of profitability. More precisely, mobile banking, internet banking, electronic funds transfer and credit card usage effect on profitability of microfinance banks in Kenya were the specific objectives. Transaction Cost Economics, Innovations Theory of Profits, and Technology Acceptance Model theories are the theories that guided formulation of the current study concepts used herein. The research design utilized here is causal research design. The research populace consists of 14 microfinance banks in Kenya which were surveyed in order to collect data from this small group. Drop and pick method was employed to collect data, from the senior managers (finance officers) of the Microfinance Banks. The gathered data was subjected to diagnostic testing, including tests for linearity, and multicollinearity, homoscedasticity, and normalcy. Following this, the data was evaluated using additional descriptive and inferential techniques to test the general evolution of the study variables and each hypothesis respectively. Findings portrayed that digital financial services significantly and positively affected profitability of microfinance banks in Kenya. The management of microfinance banks need to adopt less costly mobile banking approaches when meeting their digital clients’ needs for this will boost the profitability thereof. With reduced cost, it will assure a direct and effective boosting of the financial performance for there is a negative link between cost and earnings of an entity. Regulators including Central Bank of Kenya should develop digital financial services policies which guide on the protection of both the producers and consumers of digital financial services. | |
| dc.identifier.citation | Kimalit, B. J., & Musau, S. (2024). Digital financial services and profitability of microfinance banks in Kenya. International Journal of Social Science and Economic Research, 9(11), 5408–5420. https://doi.org/10.46609/IJSSER.2024.v09i11.029 | |
| dc.identifier.uri | https://doi.org/10.46609/IJSSER.2024.v09i11.029 | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/31754 | |
| dc.language.iso | en | |
| dc.publisher | International Journal of Social Science and Economic Research | |
| dc.title | Digital Financial Services and Profitability of Microfinance Banks in Kenya | |
| dc.type | Article |