Effect of Online Banking on Performance of Microfinance Banking in Kenya

Authors

  • Eunice Wangari Ndirangu Dedan Kimathi University of Technology
  • Prof. David Kiragu, PhD Lecturer: School of Business Management and Economics: Dedan Kimathi University of Technology
  • Dr Antony Ngunyi, PhD Lecturer: School of Science: Dedan Kimathi University of Technology
  • Dr Mohamed Shano Lecturer: School of Business and Economics: Meru University of Science and Technology
  • John Githii Kimani Director: Finstock Evarsity College

DOI:

https://doi.org/10.47941/ijf.1152

Keywords:

Online Banking, Performance, Microfinance Banks

Abstract

Purpose: The purpose of this study was to establish the effect of online banking on performance of microfinance banks in Kenya.

Methodology: The study adopted positivism philosophy approach and descriptive research design was used. The study used census survey and the target population was the thirteen Microfinance Banks regulated by the Central Bank of Kenya. Primary data was collected using self-administered questionnaires. Data was analysed using the Statistical Package for Social Science. Descriptive and inferential statistics were used for preliminary analysis. Factor analysis was conducted to reduce the number of factors and Kaiser Meyer Olkin and Barlett's test of Sphericity were tested, total variance explained, scree plot and rotated component matrix were drawn.

Findings: The descriptive statistics findings disclosed that online banking has a positive effect on performance of MFBs. The overall standard deviation was 1.47, an indication of reasonably high deviation from the mean. This shows that the respondents had fairly varied view on online banking. The relationship between online banking and performance was positive with a p value of 0.018 showing that the model was statistically significant for the data set. Online banking explains 22.6% of the variation in performance of MFBs.

Unique Contribution to Theory, Practice and Policy: The MFBs needs to invest more on online banking to improve performance. Partnership with government institutions and telecommunication companies would provide the network connections and training to the population on the use of online banking services.

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Published

2022-12-16

How to Cite

Ndirangu, E., Kiragu, D., Ngunyi, A., Shano, M., & Kimani, J. (2022). Effect of Online Banking on Performance of Microfinance Banking in Kenya. International Journal of Finance, 7(6), 59–71. https://doi.org/10.47941/ijf.1152

Issue

Vol. 7 No. 6 (2022)

Section

Articles

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Copyright (c) 2022 Eunice Wangari Ndirangu, Prof. David Kiragu, PhD, Dr Antony Ngunyi, PhD, Dr Mohamed Shano, John Githii Kimani

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This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.