Effect of Integrated Mobile Banking Services on Efficiency Among Deposit-taking Savings and Credit Cooperative Societies in Kenya

Abstract

DT-SACCOs play a role in financial intermediation which has included 6.3% Kenyans and approximately 60% of Kenyans are dependent on them. The last decade has seen DT SACCOs in Kenya embrace integrated mobile banking. This innovation of integration of mobile banking has revolutionized the convenient means of accessing financial services. Mobile banking platforms are perceived as enablers for formal financial services through remote transactions. The main aim of this research was determining integrated mobile banking effect on efficiency of DT-SACCOs in Kenya. The independent variables for the research were integrated mobile banking, credit risk, liquidity risk, SACCO size and capital adequacy while the dependent variable was efficiency measured as the ratio of outputs to inputs. The research was guided by financial intermediation theory, diffusion of innovation theory and technology acceptance model. Descriptive research design was utilized in this research. The 175 DT-SACCOs in Kenya as at December 2021 served as target population. The research obtained secondary data for five years (2017-2021) on an annual basis from SASRA and individual DT-SACCOs annual reports. Descriptive, correlation as well as regression analysis were undertaken and outcomes offered in tables followed by pertinent interpretation and discussion. The research discovered a 0.083 R square value implying that 8.3% of changes in DT-SACCOs efficiency can be described by the five variables chosen for this research. The multivariate regression analysis further revealed that individually, both credit risk and liquidity risk have a negative effect on efficiency of DT-SACCOs as shown by (β=-0.157, p=0.000) and (β=-0.254, p=0.000) correspondingly. Integrated mobile banking unveiled a positive though not statistically significant influence on efficiency. SACCO size displayed a positive and significant efficiency influence as shown by (β=0.104, p=0.008) while capital adequacy displayed a positive and not significant influence (β=0.021, p=0.592). The study recommends that DT-SACCOs should work at reducing their liquidity risk and credit risk as these two adversely affects efficiency in a negative way. Future research ought to focus on other financial institutions in Kenya to corroborate or refute the conclusions of this research.