Effect Of Digital Finance On The Financial Performance Of Commercial Banks In Kenya During Covid 19 Pandemic

Abstract

Digital financial services play a very key role to the public because it enables them to access services without a physical visit to the service provider and it builds security to some extent. Through digital financial services, banks can provide services to their customers during covid 19 pandemic, which hurt economic development and affected the banking sector in a wide range and many financial institutions. Digital financial services consist of agency banking, mobile banking, mobile wallet, and internet banking. Since the outbreak of covid 19 pandemic in the year 2020 banking sector has encountered so many challenges in the world, banks were forced to embrace digital banking in full capacity in order to serve all the customers including those who were in remote areas, and to avoid overcrowding in the banking hole with the purpose to reduce the spread of covid 19 virus and to remain in business operations during this time. The main objective of this dissertation was to find out the effect of digital finance on the financial performance of commercial banks in Kenya during covid 19 pandemic. This study has aimed at discussing the benefits of embracing digital transaction activities in the banking sector, especially during covid 19 pandemic, many research have been conducted out in regard to the financial performance of commercial banks, but they did not factor performance of banks in presence of pandemics like what we are facing now i.e. the covid 19 pandemic. However, there exist gaps as many institutions encountered many challenges during covid 19 pandemic. The study was carried out on commercial banks in Kenya. First objective was to analyze the effect of mobile banking on the financial performance of commercial banks in Kenya during covid 19 pandemic. The second objective was to determine the effect of mobile wallets on the financial performance of commercial banks in Kenya during covid 19 pandemic. The third objective was to determine the effect of internet banking on the financial performance of commercial banks in Kenya during covid 19 pandemic. Finally, the fourth objective was to determine the effect of agency banking on the financial performance of commercial banks in Kenya. The target population for the study will be 42 commercial banks in Kenya, and the research will be based on secondary data that will be collected from commercial bank records that will be provided by relevant people during the study.