ASSOCIATED RISKS AND INTERNET BANKING USE IN UGANDA.

ABSTRACT

The purpose of the study was to establish the relationship perceived risk, trust, perceived ease of use, perceived usefulness, and internet banking adoption. The study adopted a cross sectional design which was quandtative and qualitative in nature. It involved descriptive and analytical research designs. The study sample comprised of 384 bank customers in the Kampala, who were selected through simple random sampling. The data was tested for reliability, analyzed using SPSS and results presented based on the study objectives. Results revealed a significant negative relationship between Perceived Risk and Trust, and Internet Banking adoption. This means that high levels of Perceived Risk will lower the level of customer trust in the internet banking systems and will also inhibit Internet Banking Adoption. The results also revealed a positive significant relationship between Perceived Ease of Use, Perceived Usefulness and Internet Banking Adoption. If customers find the Internet banking systems easy to use, they will consider them useful thus adopting Internet Banking. Finally Trust was found to have a positive and significant relationship on Perceived Usefulness. Bank customers will consider those internet banking systems they trust as useful. The study concluded that Perceived Risk, Trust, Perceived Ease of Use, Perceived Usefulness significantly affect internet banking adoptiOn. Therefore the researcher recommended that commercial banks in order to increase adoption of internet banking they should ensure that their offer is perceived risk free, easy to use, useful and also trusted.

TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATION

ACKNOWLEDGEMENT iv

TABLE OF CONTENTS v

ABSTRACT viii

CHAPTER ONE 1

INTRODUCTION 1

1.1 Background 1

1.2 Statement of the Problem 2

1,3 Purpose of the Study 2

1.4 Research Objectives 2

1.5 Research Questions 3

1.6 Scope of the Study 3

1.6.1 Conceptual Scope 3

1.6.2 Geographical Scope 3

1.7 Significance of the Study 3

1.8 The Conceptual Framework 4

CHAPTER TWO 5

LITERATURE REVIEW 5

2.0 Introduction 5

2.1 Perceived Risk and Trust 5

2.2 Trust and Internet Banking Adoption 6

2.3 Perceived Risk and Internet Banking 8

2.4 Perceived Ease of Use and Perceived Usefulness 9

v

2.5 Perceived Usefulness and Internet Banking Adoption 10

2.6 Perceived Ease of Use and Internet Banking Adoption 11

2.7 Trust and Perceived Usefulness 12

CHAPTER THREE 14

RESEARCH METHODOLOGY 14

3.0 Introduction 14

3.1 Research Design 14

3.2 Study Population 14

3.3 Sampling Method and Size 14

3.4 Data Sources 14

3.5 Data Collection Instrument 15

3.6 Measurement of the Variables 15

3.7 Validity and Reliability of Research Instruments 16

3.8 Data Processing and Analysis 17

3.9 Ethical Considerations 17

CHAPTER FOUR 18

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS 18

4.0 Introduction 18

4.1 Descriptive Statistics of Background Information 18

4.1.1 Age and Gender Respondents 18

4.1.2 Highest Level of Education with Marital Status of the Respondents 19

4.1.3 Income Level (per month) with Occupation of the Respondents 21

4.1.4 Access to Internet with Gender of Respondents 22

4.1.5 Internet Banking Usage and Occupation Status of the Respondents 23

4.1.6 Occupation Status with Intention to use Internet banking 25

4.2 Correlation Analysis 26