| dc.description.abstract | The proliferation and rapid advancements in technology based systems especially those
related to the Internet have lead to fundamental changes in how organizations interact
with customers. It was found that this trend is well established by commercial banks in
Kenya, whereby banks have increasingly invested in technology to better secure their
future in the electronic age. The aim of the study was to find out the extent of adoption
of online credit operations by commercial banks in Kenya, the benefits to be realized, and
the factors hindering adoption of online credit operations by commercial banks in Kenya.
A survey was conducted on the adoption of online credit operations by commercial banks
in Kenya. A structured questionnaire was used to collect primary data and 36 responses
were received from credit, marketing and ICT staff from the banks which was used to
analyze the data. Data from all sections was analyzed using statistical software Statistical
Package for Social Sciences (SPSS). Frequencies, means, percentages and standard
deviations were used in data analysis and data presented inform of tables.
The results showed that, a majority of the respondents were from the large and medium
size banks. Bank products/services that were seen to be widely accessible online being:
electronic money transfer, cash deposit and withdrawals, inter account funds transfer, sms
banking, request and receipt of bank statements. It was noted that online credit
operations has not been adopted by commercial banks operating in Kenya. The
challenges hindering it‟s adoption were identified to be: the high cost of acquiring
computers and their maintenance, high cost of acquiring or having access to Internet, lack
of knowledge about the current trends, lack of adequate security for over the Internet
transactions and illiteracy among bank customers were the major factors identified to be
hindering the adoption of online credit operations in Kenya. Unlike the findings in other
developed countries, lack of top management support did not have a great impact on the
adoption of online credit operations in Kenya.
The empirical evidence also confirmed a number of benefits enjoyed by banks and
customers as a result of adoption of online credit operations. The benefits included:
Reduction in paper work; time saving; reduction in time required for loan application,
approval, and disbursement of funds; and improved service delivery. However it was
noted that adoption of online credit operations may not significantly lead to reduction in
branch networks per bank and reduction in the number of credit staff per branch.
The empirical findings suggest that online credit operations has not been widely adopted
in Kenyan banking industry. Its adoption would yield such benefits as reduction in paper
work, time saving and lead to improved customer service. Further the evidence also
reinforced the argument that security concerns, high cost of acquiring and maintaining
computers and inadequate availability/accessibility of Internet are some of the major
factors hindering the adoption of online operations.
Adoption of online credit operations by banks and their customers requires a lot of
flexibility, a positive attitude towards change, and massive investment to enhance
security for over the Internet transaction. Kenyan government should consider a further
reduction in taxes on computers and there accessories. This would help to reduce the cost
of acquiring computers, and their maintenance which is currently considered to be
prohibitive. Although there has been some improvement in access to Internet due to its
accessibility over the mobile phones, the government should consider providing
computers, electricity and Internet connections to the most remote parts of the country to
ensure equitable economic development. | en |
