Effect of Mobile Banking Services on Financial Performance of Deposit-Taking Cooperative Societies in Kenya

Abstract

Deposit-Taking Savings and Credit Cooperative Societies have embraced mobile banking services to address efficiency challenges characterized by poor information delivery channels and high operational costs and to enhance their financial performance. However, the effect of mobile banking services on the performance of Deposit-Taking Savings and Credit Cooperative Societies has not been well studied. Even though some studies have indicated the potential of mobile banking services towards improving organizational performance, other studies have indicated otherwise. Given this contradiction, this study sought to investigate the effect of mobile banking services on the performance of Deposit-Taking Savings and Credit Cooperative Societies in Kenya. Descriptive and explanatory research designs were adopted. Using simple random sampling, the study was based on a sample of 86 Deposit-Taking Savings and Credit Cooperative Societies drawn from a target population of 110 Deposit-Taking Savings and Credit Cooperative Societies that were licensed by SACCO Societies Regulatory Authority as at 31st December 2011. The study found that three mobile banking services including mobile deposits services, mobile bill payments services and mobile statements services had a positive statistically significant effect on the financial performance of Deposit-Taking SACCOs in Kenya and therefore recommends their utilization to enhance the financial performance of the SACCO subsector.