Mobile technology services and performance of deposit taking savings and credit cooperative societies in Kenya
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Date
2016-11
Authors
Mugo, David Muchangi
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Kenya's Vision 2030 requires a vibrant and a stable financial system. Deposit-Taking
Savings and Credit Cooperative Societies (SACCOs) are expected to playa key role
towards the realization of this vision by spreading the financial services among Kenyans
especially those not served by commercial banks. Despite their role in the economy,
Deposit-Taking SACCOs continue to face a number of challenges including stiff
competition for.membership from other deposit taking institutions, efficiency challenges
characterized by poor information delivery channels and high operational costs, high
demands for loans which they are unable to meet due to liquidity shortages and capital
inadequacy among other challenges. To enhance their performance, Deposit-Taking
SACCOs like other financial institutions have adopted 'and are using mobile technology
services. However, the effect of these mobile technology services on performance of
Deposit-Taking SACCOs has not been well studied. Even though some studies have
indicated the potential of mobile technology services towards improving organizational
performance, other studies indicate that they have no effect on organizational
performance. Given these contradictions, this study sought to investigate the effect of
these mobile technology services on performance of Deposit-Taking SACCOs in Kenya.
The study addressed five objectives. The first four objectives were to determine the effect
of mobile banking services, mobile communication services, mobile web services, and
Saccolink debit card services on performance of Deposit-Taking SACCOs respectively.
The fifth objective was to determine the moderating effect of government policies on the
relationship between mobile technology services and performance of Deposit-Taking
. SACCOs in Kenya. This study adopted positivism philosophy as it aimed at testing
hypotheses derived from a predetermined conceptual framework. Descriptive and
explanatory research designs were adopted using quantitative and qualitative approach to
data collection, analysis and reporting. Using simple random sampling, the study was
based on a sample of 86 Deposit-Taking SACCOs drawn from a target population of 110
Deposit-Taking SACCOs that were licensed by SACCO Societies Regulatory Authority
as at 31 st December 2011. A structured questionnaire administered to two managers (from
information technology and finance departments) in each Deposit-Taking SACCO was
used to collect primary data. Additionally, secondary data covering five years on
performance (membership and return on assets) of Deposit-Taking SACCOs was·
collected. Descriptive statistics were used to explain the patterns in the collected data.
While multiple linear regression model was applied on the quantitative data to generate
coefficients and their corresponding t-statistics and p-values used to test hypotheses,
qualitative data from the questionnaires was analyzed using content analysis. Inferential
analysis revealed the existence of statistically significant positive effect of mobile
banking services, mobile communication services and Saccolink debit card services on all
the three performance indicators (efficiency, membership and return on assets) of
Deposit-Taking SACCOs in Kenya. Additionally, the results indicated a positive
moderating effect of government policies on the relationship between mobile technology
services and performance of Deposit-Taking SACCOs in Kenya. The study therefore
recommends more investments and increased utilization of mobile technology services
within Deposit-Taking SACCOs. Additionally, the Government and other policy makers
should formulate strategies aimed at encouraging increased innovation and utilization of
mobile technology services within the Deposit-Taking SACCOs sub-sector.
Description
A thesis submitted to the school of business in partial fulfillment of the requirements for the award of the degree of Doctor of Philosophy in Management Information Systems of Kenyatta University. November, 2016