Effect Of Mobile Banking On Saving Practices Among Residents Of Kapsabet Town, Kenya

ABSTRACT

The rapid expansion of mobile banking technology in Kenya has enhanced financial inclusion to the unbanked population who for many years used informal saving practices such as chamas, hoarding at home or keeping with relatives to save money. Banking services in commercial financial institutions were for many years located in urban centers and had strict rules and selected clientele that looked out a majority of the population who resorted to informal money saving practices. With accessibility to mobile services and the growing technology, majority of the population have acquired a mobile phone and register with the available mobile money services, due to the ease of use of the mobile money services the adoption has been tremendous turning the informal saving practices into formal practices right at the palm of their hands using the mobile phone, due to the shift there is need to establish whether the new mobile technology has indeed affected the saving practices of the users. The main objective of the study was to establish the effect of mobile banking on saving practices amongst residents of Kapsabet town, Kenya with the specific objectives being; to establish the effect of perception of savings through the mobile phone, income on savings practices, adoption of mobile banking and incentives to save available to mobile banking users on the saving practices. Descriptive research design was used in the study to enable a generalization of the research findings from the target population. The results obtained were analyzed qualitatively and quantitatively using Microsoft excel and regression analysis tool. Quantitative data was interpreted and inferences were made and presented using charts, tables and percentages. The study concluded that mobile banking has improved the saving practices of Kapsabet town residents and this was mainly made possible by the improved technology on both devices and on the mobile money services, the cost of service, perceived ease of use, convenience and security of transactions have collectively enhanced the uptake of mobile banking services. Kapsabet town residents were using mobile money for different purposes including online purchasing, payment of bills, receiving payment, payment of goods and services, savings as well as money transfer, which significantly influenced their saving practices. The study recommends that Communication Authority of Kenya (CAK), which regulates mobile money services, and the Central Bank of Kenya (CBK), which regulates the banking industry, should formulate clear regulations to ensure smooth running of mobile money services.it further recommends that mobile money service providers be regulated to prevent them from exploiting users. The findings of this study will be of importance to economic policy makers, mobile service providers, financial institutions and scholars.