The effect of information and communication technology investment on financial performance of micro-finance banks in Kenya
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Date
2015-10Author
Imalingat, Sheila
Type
ThesisLanguage
enMetadata
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The study sought to determine the effect of ICT investment on financial performance of
microfinance banks in Kenya. The study did a descriptive survey of nine (9) microfinance
banks that had been in operation for five years (2010-2014). The study used secondary
sources of data that was obtained from central bank of Kenya audited reports of the nine
microfinance banks. Data analysis involved descriptive statistics, correlation analysis and
regression analysis. The study concluded that the microfinance banks should continue
investing in modern technologies like ATMs and issuance of debit and credit cards. This
is because these kinds of technologies play an integral role of increasing access to
financial services to customers in an efficient and effective manner. This brings about
increased cost reduction and thus improves financial performance. The regression results
found that logarithm of assets and operating efficiency variables are statistically
significant in the model. On the other hand, debits and credit cards were found to be
statistically insignificant because their probability (p)-values were above 5%. The
limitation of this study is that it limited itself to microfinance banks that were in
operation between 2010-2014. The study proposes that it would be imperative to consider
carrying out a more comprehensive examination on the relationship between ICT
investment and financial performance in the entire banking industry to find out whether
these facts will still hold. The study also recommends that MFBs should adapt growth
strategies that will help to win the clients trust thus enjoying the benefits of large scale by
creating a platform for building branch networks and ATMs as a way of reaching out to
many customers across the country.
Publisher
University of Nairobi