Factors Influencing Adoption Of Mobile Banking Services In Informal Settlements Of Mavoko Sub-county In Machakos County, Kenya

Abstract

The purpose of this study was to establish the determinants of adoption of mobile banking services at the Bottom of the pyramid (BOP) in Mavoko Sub-county within Kenya’s Machakos County. The study aimed to answer research questions and test hypothesis based on perceived cost, perceived ease of use, perceived usefulness and perceived risk as factors that influenced adoption of mobile banking. Demographic factors were also studied as moderating variables. The investigation utilized the Technology Acceptance Model (TAM) and Extended TAM otherwise called (TAM2) by Davis (1989) as the model of study. This study additionally utilized the Unified Theory of Acceptance and Utilization of Technology (UTAUT) by Venkatesh et al.(2003) and Rogers Innovation Adoption Theory by Rogers (1999) in order to understand in depth the adoption of technology innovations such as mobile banking. The study meant to fill the gap that existed in research as it concentrates in Kenya’s versatile and unique Bottom of the Pyramid population (BOP). Basic arbitrary sampling using the simple random sampling method was utilized to obtain 100 respondents over the age of 18 years earning below USD 2.5 every day in the slums or ‘ghettos’ of Mavoko Sub county. The respondents were classified in two distinct groups of youthful adults (18- 35years) and the more seasoned adults (36 years and above). For purposes of this research, respondents were drawn from all the twenty slums in Mavoko Sub-county. These slums are largely characterized by destitution. Residents of these areas have poor access to proper medical services, safe water supply and sanitation. They live in structures made of poor building materials and experience security challenges. These ghettos are often situated in the high risk regions such as near industries, riverbanks and railroad lines. Residents of these slum areas rely on casual employment opportunities for their livelihood and survival. In order to collect data, questionnaires were given to these respondents. A likert scale was utilized in order to qualify responses in the study. The information was then coded, examined utilizing multiple regression and then studied in order to recognize key discoveries, make recommendations and draw conclusions. Statistical Package for Social Sciences (SPSS) version 21 was used for analysis. Findings in this study demonstrated that the utilization of mobile phones at the BOP is gradually growing as retail banks continue offering versatile financial products using mobile channels. The study presets a chance for banks to gain a deeper understanding of the BOP population by learning their consumer behavior thereby allowing them to create products that best suit this demographic. This study also demonstrated that there still a significant number of individuals at the BOP who are not informed about mobile banking technology and its related benefits. The investigation found that perceived ease of use and perceived cost (B=0.242; p value =0.006; B=0.240; p value =0.005) were found to be the most significant components affecting the take-up of mobile banking technology.