Mobile Phone Banking and Financial Markets in Selected M-Pesa Outlets in Kenya

ABSTRACT The purpose of this study was to investigate the extent to which mobile phone banking has enhanced the involvement of people in financial markets in selected M-PESA outlets in Kenya. The study adopted a cross-sectional survey research design which allowed the collection of primary quantitative data through structured questionnaires. The target population was 500 respondents sampled from three districts (Bungoma, Nakuru and Nairobi — Kenya). Sloven’s formula was adopted to arrive at 222 respondents who were subjected to the research study. The data was analyzed using both descriptive and inferential statistics. Consequently, the findings of the study were that mobile phone banking has greatly influenced the participation of people in financial markets in Kenya since a majority of the respondents frequently used the M-PESA service because it has a bigger market penetration and widely adopted. The study also revealed that a bigger percentage of the M-PESA users are young single adults most of whom were male. It further indicated that the wider market penetration of M-PESA has enabled the people access money faster thus realizing a greater extent of mobile phone banking. The study revealed that financial markets in Kenya has witnessed a greater extent because it has shifted from corporate and big business participation to individual customers participating in financial markets. In a nutshell therefore, the study revealed that mobile phone banking is positively related to financial markets at 0.001 level of significance. The study therefore concluded that mobile phone banking has an influence on financial markets hence the need for Safaricom to strengthen its collaboration with financial institutions such that the M-PESA service is integrated in their financial packages to enhance faster service delivery.

 TABLE OF CONTENTS

DECLARATION A

DECLARATION B

APPROVAL SHEET

DEDICATION iv

ACKNOWLEDGEMENT

ABSTRACT

TABLE OF CONTENTS vii

LISTOFTABLES

LIST OF FIGURES xi

CHAPTER ONE 1

THE PROBLEM AND ITS SCOPE 1

Background of the Study 1

M-PESA MobNe Money 2

Statement of the Prob~em 4

Purpose of the Study s

Research Objectives s

Research Questions 5

Scope of the Study 6

Geographical Scope 6

Theoretical Scope 6

Content Scope 7

Significance of the Study 8

Operationa~ Definitions of Key Terms 9

CHAPTER TWO.io

REVIEW OF RELATED LITERATURE 10

Concepts, Opinions, Ideas from Authors/Experts 10

Theoretical Perspectives 17

Related Studies 18

SCHEMA 21

CHAPTERTHREE 22

METHODOLOGY 22

Research Design 22

Research Population 22

Sample Size 22

Sampling Procedure 23

Research Instrument 23

Validity and Reliability of the Instrument 24

Data Gathering Procedures 24

Before the administration of the questionnaires 24

During the administration of the questionnaires 25

After the administration ofthe questionnafres 25

Data Analysis 25

Data Interpretation 26

Ethical Considerations 26

Limitation of the Study 27

CHAPTER FOUR 28

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 28

Data Analysis and Presentations 28

CHAPTER FIVE .38

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 38

CONCLUSIONS 40

RECOMMENDATIONS 41

REFERENCES 42

APPENDIX I: TRANSMITTAL LETTER 45

APPENDIX II: CLEARANCE FROM ETHICS COMMITTEE 45

APPENDIX II: CLEARANCE FROM ETHICS COMMITTEE 46

APPENDIX III: INFORMED CONSENT 47

APPENDIX IVA 48

QUESTIONNAIRE TO DETERMINE LEVEL OF SIGNIFICANCE OF MOBILE

PHONE BANKING TO FINANCIAL MARKETS 48

FACE SHEET 49

RESEARCHER’S CURRICULUM VITAE 52