The Pro-poor Factors, Demographic Factors, Adoption and Usage of Mobile Financial Services in Kenya

Abstract

The unconventional growth and penetration of mobile financial services across the world have led researchers to unearth the factors that influence or inhibit this growth. This study focused on the effects of pro-poor factors, and demographic factors on adoption and usage of mobile financial services among the poor in Kenya. The dominant paradigm has been the conventional top-down approach where models such as, Technology Adoption Model (TAM), and Unified Theory of Acceptance and Use of Technology (UTAUT). These models are based on the evaluation of individual-specific factors which in itself was insufficient to generalize for a particular context, culture or community. This study adopted a bottom-up approach by looking at the communal, cultural and contextual pro-poor factors to examine its effects on adoption and usage of mobile financial services among the poor in Kenya. By seeking to explain the community, cultural and contextual factors that are specific to the poor people the study aims to fill research gaps and contribute knowledge in this area of mobile financial services. The study utilized Theories of Poverty, the Social Capital Theory, and the Unified Theory of Acceptance and Usage of Technology to provide sound theoretical background to this study. The quantitative approach was adopted based on a cross-sectional study of the poor in Kenya. Data collection was done through the use of a semi-structured questionnaire that was administered to people living in the slums of Nairobi. Structural equation modeling was utilized for data analysis using the partial least square analysis and hypothesis was tested using data collected. The study results showed that the structural model showed a good fit possessing good reliability, convergent and discriminant validity were also found to be good. The results revealed that there exist relationships between contextual factors, community factors, cultural factors, and adoption. The relationship between the contextual factors, community factors, and usage were found to be significant. Surprisingly the relationship between cultural factors and usage as well as adoption and usage were found to be insignificant which is explained by the pressing need to adopt and use mobile financial services. The demographic factors of age and gender did not moderate the relationships between community factors and adoption as well as the cultural factors and adoption. The study brings forth a fresh approach to adoption studies in information system beyond the traditional theories such as TAM and UTAUT, it uses bottom-up pro-poor perspective and proposes a new model suitable for a segment of the society (the poor) largely ignored by existing theories. The findings contribute to the existing body of knowledge by making contributions in enhancing the literature on understanding the local context, effects of pro-poor factors on adoption and usage of mobile financial services. It also fills the methodological gap by using a quantitative study and suggest directions for future research while offering implications for academia and policy makers. The results of the research provide information to the regulatory agencies and government and the mobile telecommunication operators.