scholarly journals Analyzing Effect of Alternative Banking Channels on Financial Performance of Burundi Commercial Banks: Evidence from Kenya Commercial Bank in Burundi

2020 ◽  
pp. 1-11
Author(s):  
Nkeshimana Carlos ◽  
Martin Onsiro Ronald
Keyword(s):  
Financial Performance ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Strong Relationship ◽  
Target Population ◽  
Internet Banking ◽  
Sample Population ◽  
Mobile Banking ◽  
Significance Level ◽  
Descriptive Survey

The study sought to assess the effect of channels of alternative banking on financial performance of Kenya Commercial Banks in Burundi. The specific objectives were: to examine the effect of mobile banking on financial performance of Kenya Commercial Bank, Burundi; to assess the effect of internet banking on financial performance of Kenya Commercial Bank, Burundi; to examine the effect of auto teller machines on financial performance of Kenya Commercial Bank, Burundi; and to assess the effect of agency banking on financial performance of Kenya Commercial Bank, Burundi. The study employed descriptive survey research design as well as correlation research designs. Based on information obtained from KCB, the target population for the study was 37 employees and 114 customers. The researcher used Slovin’s formula to define the sample population n = 60 (14 employees and 46 customers). A questionnaire was used for data collection. The data was qualitatively and quantitatively analyzed. The results of the study showed that there was a strong relationship between the different banking distribution channels and the financial performance of KCB Bank. It also found that 14.1% of the total variance in financial performance of KCB Bank could be attributed to alternative banking channels. The remaining 85.9% of the variance in financial performance could be attributed to other determinants of financial performance that were not the focus of this study. ANOVA statistics revealed that the regression model was ideal since it had a significance level of 0.0%. The study also found that mobile banking, Automated Teller Machine, agencies and Internet banking affected the performance of commercial banks in a positive and statistically significant way. The study recommends that Burundian commercial bank sought to invest heavily in alternative banking as this will lead to an improvement in banks' financial performance. The study also recommended that KCB should examine the competitive environment and determine the means to achieve the goal of interoperability, and continue to make electronic banking products available, offering various types of bank cards adapted to the needs of each client.

scholarly journals Electronic Banking and Financial Performance of Commercial Banks in Kenya

2019 ◽  
Vol 3 (II) ◽  
pp. 293-304
Author(s):  
Maria Mueni Mutisya ◽  
Gerald Atheru
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Internet Banking ◽  
Business Environment ◽  
Mobile Banking ◽  
Electronic Banking ◽  
Return On Assets ◽  
Independent Variables ◽  
Net Profit ◽  
Automated Teller Machine

Information technology has changed the traditional ways of doing business to a digital and electronic way that has led to globalization. The banking industry has been forced by the wave of electronic payment system in the business environment to change from its traditional ways such as: long queues as customers waited to be served, delay in the clearing house as representatives of different banks waited to settle their dues and manual work that resulted to errors. The main purpose of the study was to determine the effect of electronic banking on the financial performance of commercial banks in Kenya. The specific objectives were to determine the extend of internet, mobile, automated teller machine and debit/credit card banking adoption and its effect on financial performance. The study covered a period of five years that is from the year 2011 to the year 2015 and adopted descriptive research design. The data collected was analyzed by the use of both descriptive and inferential statistics procedures. Primary and secondary data was collected from the 34 commercial banks that responded leading to a respond rate of 79.04% out of the 43 commercial banks. The trade analysis showed that internet banking was recognized and accepted by the Kenyan commercial banks and the Kenyans as a way of transacting. Electronic banking was found to be positive and significantly related to the financial performance of the commercial banks in Kenya. This was attributed by an R Square of 0.688 for Return On Assets, 0.63 for Net Profit and 0.277 for Return On Equity indicating that the independent variables in the study were able to give information of up to 68.8%, 63% and 27.7% respectively while the remaining 31.2%, 27% and 72.3% could not be explained in the study but could be explained using other variables outside the study. All the independent variables were (internet banking, Mobile banking, Automated Teller Machine banking and Debit/Credit banking) found to be positively and significantly related to the Return On Assets while only mobile banking and internet banking were found to be positively and significantly related to Net Profit since their p Values were less 0.05. Automated Teller Machine banking showed a positive relation that was insignificant with the Return On Equity.The study recommends that, electronic banking should be employed by commercial banks through proper management policies since it has shown improved efficiency and financial performance. For further studies, areas of crime technology, quality of banking services, electronic fund transfer and performing loans should be looked at. This is an open-access article published and distributed under the terms and conditions of the Creative Commons Attribution 4.0 International License of United States unless otherwise stated. Access, citation and distribution of this article is allowed with full recognition of the authors and the source.

scholarly journals EFFECTS OF MOBILE BANKING ON CAPITAL STRUCTURE OF COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 2 (6) ◽  
pp. 20
Author(s):  
Musalia Kilasi Eric ◽  
Dr. Oluoch Oluoch
Keyword(s):  
Capital Structure ◽  
Commercial Banks ◽  
Secondary Data ◽  
Strong Relationship ◽  
Coefficient Of Determination ◽  
Mobile Banking ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Data Set ◽  
Descriptive Survey

Purpose: The aim of this study was to explore the effects of mobile banking on the capital structure of commercial banks in Kenya. Materials and methods: The study adopted descriptive cross sectional survey. The study population was 43 commercial banks in Kenya as at December 2015. The study adopted a descriptive survey research design that is cross-sectional in approach. The study covered the period 2010 to 2015. Secondary data set was gathered from the Audited Financial statements of the Banks, those deposited at the Nairobi Securities Exchange and CBK annual banking survey reports. A survey of all the 43 commercial banks was undertaken banks. A census of all the 43 banks was done. Statistical Package for Social Sciences (SPSS) version 21.0 complimented by STATA software was used to aid in data analysis. Results: The study revealed that amount of loans issued, amount of withdrawals, amount of deposits and number of mobile bank users were satisfactory variables in explaining capital structure of commercial banks in Kenya. This is supported by coefficient of determination of 59.41%. Result findings revealed that amount of deposits was positively and significantly related to capital structure of the commercial banks. Recommendations: It is therefore recommended that commercial banks focus on building a strong relationship with customers. Further, it is recommended that commercial banks expand the mobile banking through adoption of mobile technology. The study used secondary data to determine the relationship between mobile banking and capital structure of commercial banks in Kenya.

scholarly journals Mobile Banking Services with Financial Performance on Commercial Banks in Kenya

2019 ◽  
Vol 3 (VI) ◽  
pp. 176-192
Author(s):  
Maurine Mugane ◽  
Reuben Njuguna
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Short Message Service ◽  
Target Population ◽  
Short Message ◽  
Strong Positive Correlation ◽  
Mobile Banking ◽  
Banking Services ◽  
Positive Correlation ◽  
Message Service

The competition dimensions have changed following the adopting of various internet banking services that came about as a result of technological innovations such as the introduction of Automated Teller Machines (ATMs), phone banking Personal computer banking which were some of the first innovations of electronic finance. The main objective of this study was to establish the impact of mobile banking services on the financial performance of commercial banks in Kenya. The specific objectives guiding this study included to assess the influence of short message service (SMS) banking on the financial performance of commercial banks in Kenya, to establish the effect of person to person payments on the financial performance of commercial banks in Kenya, to determine the effect of bill payments on the financial performance of commercial banks in Kenya and to find out the effect of airtime top up service on the financial performance of commercial banks in Kenya. The research design that the study adopted was a descriptive research design employing quantitative research strategies. In this study the target population under investigation was all the 40 commercial banks in Kenya. Since in the current study the target population was 80 participants from all the 40 commercial banks in Kenya a census inquiry method was the best method used. Primary data for this study was collected through the use of a questionnaire that was given senior managers from all the departments of these organizations. Both quantitative and qualitative data was generated in this study. Qualitative data was analysed using content analysis whereby content of responses was looked at and responses were grouped together in relation to common patterns or themes for coherent categorization. Descriptive statistics included measures of central tendency and dispersion thus standard deviation and mean and use of absolute and relative percentage frequencies. Presentation of quantitative data was in form of graphs and tables and explanation given in prose. The study findings show that short message service had an above average positive correlation with financial performance of commercial banks and was statistically significant. Person to person had an average correlation with financial performance of commercial banks and was statistically significant. Bill payments had a strong positive correlation with financial performance of commercial banks and was statistically significant. Airtime top up service had an strong positive correlation with financial performance of commercial banks  and was statistically significant. The study concludes that short message service banking has become and important part of banking, more and more people prefer to receive banking alerts through short message service which has not only improved service delivery but has had a positive impact on financial performance. Commercial banks have experiences large revenues from different activities with the banking system core among them the bill payments activities. The study recommends that it is important for commercial banks to focus more on short message service banking to lower operational costs thereby improving financial performance. Commercial banks need to consider using person to person payments to improve on their performance, they need to enhance their bill payments to get more clients paying bills using their systems so as to improve on their financial performance and that it is important for commercial banks to put more effort on airtime top up service so as to improve on their financial performance.

scholarly journals E-Banking Strategy and Performance of Commercial Banks in Kenya

2019 ◽  
Vol 3 (V) ◽  
pp. 147-165
Author(s):  
Rosemary Wangari Nduta ◽  
Jane Wanjira
Keyword(s):  
Technology Acceptance ◽  
Commercial Banks ◽  
Diffusion Of Innovations ◽  
Target Population ◽  
Internet Banking ◽  
Technological Innovations ◽  
Mobile Banking ◽  
Banking Strategy ◽  
And Performance ◽  
The Impact

Technological innovations in the aspect of electronic banking (e-banking) have progressively advanced and changed the manner in which banks offer services. The use of varied forms of technological innovations has become a key strategy that influences the competitiveness and performance of commercial banks. Subsequently, banks are investing more in adopting and implementing innovative e-banking strategies. Although numerous studies have inspected the effect of e-banking on banks across the world, the knowledge gap is that few studies have examined the impact of e-banking strategies on commercial banks’ performance in Kenya. The objectives of this study were to predict the impact of agency banking, mobile banking, the use of ATMs, and internet banking on the commercial banks’ financial performance in Kenya. Agency theory, contingency theory, diffusion of innovations theory, and technology acceptance theory formed the theoretical basis of this study. In its research design, the study used the descriptive approach. The target population comprised managers of 40 commercial banks and the study utilized the purposive sampling method to select 100 respondents comprising of 40 senior managers and 60 operations managers. Descriptive statistics, correlation, and regression analysis were used to analyze data. Correlation analysis indicated that mobile banking (r = 806, p = 0.000), agency banking (r = 0.737, p = 0.000), internet banking (r = 0.466, p = 0.000), and ATM banking (r = 0.547, p = 0.000) have statistically significant relationships with the commercial banks’ performance. Findings indicate that e-banking accounts for 71% (R2 = 0.710) of the variation in the commercial banks’ performance. Moreover, the study found out that e-banking strategies of agency banking and mobile banking are statistically significant predictors (p<0.01, while internet banking and ATM banking are statistically insignificant predictors (p>0.01). Based on these findings, the study concludes that rely on e-banking strategies in enhancing their performance, particularly mobile banking and agency banking. Furthermore, the study concludes that ATM banking and internet banking contribute minimally to the commercial banks’ performance in Kenya. Thus, the study recommends banks to optimize mobile banking and agency banking because they are statistically significant predictors while increasing awareness of internet banking and addressing insecurity issues of ATM banking. Thus, further research should consider establishing factors that account for the unexplained variances of 29% in the performance of commercial banks.

scholarly journals EFFECTS OF INTERNET BANKING ON FINANCIAL PERFORMANCE OF LISTED COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 1 (1) ◽  
pp. 53
Author(s):  
Margaret Mateka ◽  
Dr Julius Gogo ◽  
Job Omagwa
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Survey Design ◽  
Simple Random Sampling ◽  
Target Population ◽  
Analysis Data ◽  
Internet Banking ◽  
The Internet ◽  
Sources Of Information ◽  
Use Of Internet

Purpose: The purpose of this study was to establish the effect of Internet Banking on the financial performance of listed commercial banks in Kenya.Methodology: This study used descriptive survey design. The target population was all employees of listed commercial banks in Kenya. Simple random sampling method was used to identify the study respondents. Primary sources of information were used and were gathered using questionnaires. Finally data from the questionnaires was sorted, coded and input into a software for analysis. Data was analysed using statistical package for the social sciences (SPSS) to generate diagrams, frequencies, descriptive statistics and inferential statistics.Results: The key finding of the study revealed that internet backing has positive influence on bank incomes, operating costs, loan book and customer deposits.Unique contribution to theory, practice and policy: Due to the growing demand for the internet as a key service delivery, it is recommended to bank management to ensure that there is tight security of data and information being operated on the internet bank platform. The study also recommends that the bank managers should emphasize on training their clients on use of internet banking via advertisements as this will make ease on communication. Commercial banks need to emphasize the use of internet banking as this will enhance banks growth and customers saving on much time which they could have wasted on queues to be attended the traditional way.

scholarly journals Credit Information Sharing Practices and Financial Performance of Commercial Banks in Kenya

2019 ◽  
Vol 3 (VI) ◽  
pp. 67-82
Author(s):  
Felix Ouma Odhiambo ◽  
Fredrick Ndede
Keyword(s):  
Financial Performance ◽  
Information Sharing ◽  
Data Sharing ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Banking Sector ◽  
Secondary Data ◽  
Target Population ◽  
Primary Data ◽  
Loan Default

The banking sector in Kenya suffered increased non-performing credits which prompted collapse of certain banks with an upsurge of loan defaulters. This was mainly attributed to the continued information asymmetry in the industry because of absence of a credit data sharing component. Commercial banks in Kenya have continued to encounter a number of challenges in obtaining information on customers’ payment history that helps guide on determining their ability to access and re-pay loan advancements. This has made more commercial banks to subscribe to credit reference bureaus since its establishment in 2008. As a result, commercial banks in Kenya have been experiencing high rates of Non-Performing Loans advanced to customers. The general objective of the study was to determine the effect of credit information sharing practices on financial performance of commercial bank in Kenya. The study specific objectives were to determine the effect of information accuracy, volume of lending and customer credit reports on financial performance of commercial bank in Kenya. The study was anchored by adverse selection theory, moral hazard theory and asymmetry theory. The researcher used a descriptive research design. The target population was five banks within Nairobi County including KCB, Equity Bank, Family Bank, Cooperative Bank and Barclays Bank. Primary data was collected using questionnaires and secondary data using financial statements of the commercial banks performance for the past 5 years. Data was analysed using descriptive statistics and inferential statistics. The study found that information accuracy, volume of lending and customer credit reports were positively and significantly related to the financial performance of the commercial banks. The study concludes that information accuracy increases the banks ' understanding of the applicants’ features and allows a more precise forecast of their probabilities of repayment, it decreases the information rents that banks could otherwise obtain from their clients and it can function as a borrower discipline tool. Lending volume enhances business banks ' enhanced operations, which in turn leads to banks’ enhanced economic results. Sharing of credit information has made commercial banks grant more loans on the basis of their reputation to deserving clients, thereby improving their profitability. When extensive consumer credit history information are easily accessible, it considerably decreases the cost of entering loan markets for fresh lenders, enhances competition and lowers credit rates. The research recommends that for enhanced results, all financial institutions in Kenya need to protect the precision of their platforms for data sharing. Regular site visits should offer credibility to the precision of the borrowers’ data. The data supplied by CRB should be used efficiently by commercial banks to lend to prospective borrowers. Only borrowers with a strong history of credit should be permitted access to the loans. The research also proposes that Kenya's commercial banks should base credit awards on the borrowers’ reputational assets, ensuring that the loan default rate is small, thus enhancing commercial bank performance.

scholarly journals Digital Financial Services and Financial Performance of Savings and Credit Cooperative Societies in Kakamega County, Kenya

2021 ◽  
Vol 3 (1) ◽  
pp. 9-20
Author(s):  
Kizito Simiyu Wanyonyi ◽  
Dominic Ngaba
Keyword(s):  
Financial Performance ◽  
Diffusion Of Innovation ◽  
Financial Services ◽  
Service Providers ◽  
Banking System ◽  
Target Population ◽  
Internet Banking ◽  
Primary Data ◽  
Mobile Banking ◽  
Services Delivery

Savings and Credit Co-operative Societies (Saccos) in Kenya have realised a tremendous growth in the subsector and are investing huge amount of their scarce financial resources in digital  technology to enhance services delivery and offer a wide variety of products and services range, increased membership mobilisation and size, ensure better structure and effective financial performance. Digital financial Services as used in the Saccos industry is as a result of Information Communication Technology revolution commonly referred to as digital  commerce. Many Saccos are steadily changing from manual banking system of operations to providing digital Financial (e-banking) services that include internet banking, M-banking and Automated Teller machine support. The adoption of digital  financial Services by the Saccos is a strategic attempt to deal with increased cut throat competition from traditional banking institutions and non-banking financial institutions, to cut costs and add value to their services in order to optimise benefits to the shareholders. Despite the fact that Saccos have rapidly adopted digital financial services to provide services, and that they drive a huge section of the financial sector savings of the economy, they have experienced various challenges such as uncertainty and risk due to digital  financial services. The study sought to establish the influence of digital financial services on the financial performance of SACCOs in Kakamega County, Kenya. The specific objectives was to determine the effect of the mobile banking, internet banking, use of credit cards and digital  funds transfer on the financial performance of SACCOs in Kakamega County, Kenya. The research was guided by three theories of innovation and technology: Diffusion of Innovation Theory, The Theory of Task-Technology Fit Theory and the Technological context, Organisational context and Environmental context Theory.The study used a descriptive research design. The population of study were staff at the three SACCOs operating in Kakamega County. This consisted of 162 respondents who are the staff of the SACCOs. A sample of 49 respondents was taken which forms 30% of the target population which shall be evenly spread across the three SACCOs. The primary data was collected by use of self-administered semi-structured questionnaire.Collected data was analysed through descriptive and inferential statistics by the use of SPSS. Findings were presented by use of tables, frequencies, percentages, means and standard deviation.The study found that the financial performance of the SACCOs was significantly influenced by the digital financial services instituted by the SACCO managements. They demonstrated to have reliable mobile banking system where most of their customers had enrolled on the mobile banking platform and most of customer queries and updates were sorted via the mobile platform.Given the limitations and findings of this study, the researcher recommends that since there exists a positive relationship between digital financial services and bank performance and that e-banking has brought services closer to bank customer’s hence improving banking industry performance, SACCOs must also enhance the dynamics of the sector and embrace digital banking fully and extensively. Mobile banking faces various challenges among them being, system delays by the mobile money transfer service providers, slow processing of transactions, high transactions costs, limit on the amount of money that can be withdrawn in a day and fraud.

Financial Innovations and Performance of Commercial Banks in Kenya

2020 ◽  
Vol 2 (2) ◽  
pp. 21-33
Author(s):  
Naomi Wanja Ireri ◽  
Gladys Kimutai
Keyword(s):  
Rural Areas ◽  
Commercial Banks ◽  
Internet Banking ◽  
Ease Of Use ◽  
Primary Data ◽  
The Internet ◽  
Mobile Banking ◽  
Good Opportunity ◽  
Financial Innovations ◽  
Automated Teller Machine

Commercial banks in Kenya have embraced alternative banking channels which represent a shift in delivery of banking and financial services since the alternative banking have become synonymous with commercial banks in Kenya. While banks have succeeded in leveraging available technology and provide alternative avenues to customers for banking services, the challenge it faces today is optimizing the usage of these channels so as to improve on their performance. The general objective of this study was to investigate the effects of financial innovations on the performance of commercial banks in Kenya. The specific objectives of the study were to examine the influence of internet banking, mobile banking, agency banking and ATM banking on the performance of commercial banks in Kenya. The study was guided by agency theory, balanced score card and diffusion of innovation theory. This study employed a descriptive research design. The study targeted44 commercial banks in Kenya as at 2017. The 16 banks which embrace all the four financial innovations from 2013 to 2017were selected using purposive sampling method. The sample size was 80 respondents who comprised of 5 senior management employees in each of the selected banks.This study used questionnaire to collect primary data from the respondents. Content analysis technique was used to analyze qualitative data collected from open ended questions in and reported in narrative form. Descriptive statistics such as mean and standard deviation were used to analyse the quantitative data. Multiple regression analysis was used to show the relationship between independent variables against dependent variable. The study revealed that internet banking, mobile banking, agency banking and ATM banking had a positive and significant effect on the performance of commercial banks. Thisstudy concludes that the banking industry has benefited tremendously from the development of the Internet. The Internet fundamentally changed the way in which banking networks are designed to meet the client demands and expectations. Mobile banking provides a good opportunity to commercial banks in Kenya to reach many mobile phone subscribers in Kenya who had remained unbanked and unreached due to limited access to bank branch networks in the country. The access to the large masses through mobile banking of the population gives banks the opportunity to grow by reaching the unbanked population. Agency banking has led to accessibility of financial service to many customer in remote areas and hence an increase in effectiveness and efficiency in service delivery. Customers are satisfied with the automated teller machine services because of ease of use, transaction cost and service security but not satisfy with automated teller machine dispense of cash. The study recommends that the public and businesses must be encouraged to use Internet banking in their daily activities, including deposits, payments and money transfers. Commercial banks in Kenya should ensure convenience and security of mobile banking through written guidelines on convenience and security of mobile banking. Commercial banks in Kenya should increase the number of agents in estates and in the rural areas. This can be done by reducing the requirements of becoming a bank agent. The banks should employ customized software that records relevant information on automated teller machine cards so that banks can establish whether unauthorized transaction has taken place or not.

Analisis Kinerja Keuangan Bank Umum Syariah Melalui Pendekatan Islamicity Performance Index

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Safaah Restuning Hayati ◽  
Mutiah Hanifah Ramadhani
Keyword(s):  
Financial Performance ◽  
Commercial Bank ◽  
Performance Index ◽  
Commercial Banks ◽  
Secondary Data ◽  
Sampling Technique ◽  
Descriptive Research ◽  
Index Approach ◽  
Principles Of Justice ◽  
Quantitative Descriptive

This study aims to determine how the financial performance of Islamic commercial banks in Indonesia through the islamicity performance index approach for the period 2013-2017, by the principles of justice, halalness, and purification. This study using quantitative descriptive research. The number of banks sampled are five Islamic commercial banks in Indonesia that have been selected, through a purposive sampling technique first. These banks are BRI Syariah, BNI Syariah, Mandiri Syariah, BCA Syariah, and Victoria Syariah. The type of data used is secondary data taken from the financial statements of each islamic commercial bank that is sampled. Through the islamicity performance index approach, the results of this study indicate that the financial performance of islamic commercial bank is unsatisfactory, based on the average of the variables that have been processed in accordance with predicate valuation standards.

scholarly journals Effect of Bank Innovations on Profitability and Return on Assets (ROA) of Commercial Banks in Lebanon

2017 ◽  
Vol 9 (4) ◽  
pp. 35 ◽  
Author(s):  
Hiyam Sujud ◽  
Boutheina Hashem
Keyword(s):  
Social Sciences ◽  
Commercial Banks ◽  
Positive Impact ◽  
Credit Cards ◽  
Internet Banking ◽  
Mobile Banking ◽  
Significance Tests ◽  
Return On Assets ◽  
Point Of Sale ◽  
The Impact

The purpose of this research is to study bank innovations in the field of mobile banking, debit and credit cards, automated machines (ATM), internet banking, point of sale terminals (PST) and electronic funds transfer (EFT). It purposely looked into those innovations in relation to their influence on profitability and return on assets (ROA) of Lebanese commercial banks. Data was collected through a research questionnaire, and statistical analysis was done using the Package of Social Sciences Software (SPSS). The results revealed that there is a significant positive impact of bank innovations on profitability and return on assets of Lebanese commercial banks and significance tests also showed that the impact was statistically significant. Based on the results of the study, it can be concluded that bank innovations affect profitability and return on assets (ROA) of commercial banks in Lebanon positively.

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