Factors Affecting Adoption of Mobile Banking: the case of Nib International Bank S.C.

Abstract

Banking industry is one of the critical economic institutions in the economic development of a country. However, the majority of Ethiopians’ do not have access to the banking services. Even most of the existing banks operate in cities and towns where significant customers exist to secure financial viability since all commercial banks operate for profit. Thanks to the advancement of information and communications technology in the banking sector commercial banks can provide banking services through mobile banking technology. However, in spite of the implementation of mobile banking technology in Ethiopia through commercial Banks the numbers of users of the services are very small as compared to other countries like Kenya. This research paper aims to understand the factors that affect the adoption of mobile banking technology in the case of Nib International Bank S.C. five selected branch customers using technology acceptance model developed by Davis with additional variable namely perceived risk. Understanding the factors that will affect customers’ adoption behavior of mobile banking will help the NIB’S effort to increase the penetration and growth of mobile banking service. To address the research objective 425 sample customers are selected based on purposive and convenient sampling method and questionnaire is distributed from which 368 sample respondents replied appropriately to the questionnaire. Data gathered are analyzed using descriptive statistics such as frequency, percentage, mean, and standard deviation. Besides binary logistic regression analysis is conducted to understand the relationship of mobile banking adoption and perceived usefulness, perceived ease of use and perceived risk. As result the study found out that perceived usefulness have positive relationship with the adoption of mobile banking whereas perceived ease of use and perceived risk has negative relationship with the adoption of mobile banking. NIB and its selected five branches in particular shall promote mobile banking services to its customers using various promotional tools appropriate to the target market so that it can increase the awareness and perception of potential customers about the technology’s usefulness, ease of use as well as its risk.