Relationship Between Technological Deepening and Financial Inclusion Among Commercial Banks in Kenya

Abstract

Financial inclusion initiatives driven by government policies make millions of new customers worldwide to enter into formal banking sector every year. Governments and banks have come up with financial inclusion initiatives by designing products and services that meet the excluded needs of clients. The technological deepening in businesses have transformed associations within the firms as well as those between banks and customers. A descriptive research design was used in this study. The study’s target population was 42 commercial banks operating in Kenya as of December 2020. The research employed secondary data obtained from CBK annual reports and banks financial reports between 2011 and 2020. The study data was edited, coded, and categorized based on similarity before being collated. Statistical Package for Social Sciences (SPSS Version 25.0) was used to analyze the collected data. To summarize and relate data obtained from the study, descriptive statistics such as frequency distributions, percentages, and frequency tables were used. The data presentation was in form of figures and tables. The study found that EFT POS positively and significantly related to financial inclusion among commercial banks in Kenya. The study also established that mobile banking and internet banking also positively and significantly related to financial inclusion among commercial banks in Kenya. The study concluded that technological deepening through introduction of credit and debit cards, adoption of mobile and internet banking has a significant effect on financial inclusion among Kenyan commercial banks. This study suggests that the Kenyan government and various policy organizations develop policy structures to promote financial inclusion, as financial inclusion increases financial intermediation and economic growth. The study further recommends that the government should consider licensing more micro finance institutions with the directive of operating in areas which are financially excluded from formal financial system.