This study sought to establish the effect of mobile credit on operational efficiency
in commercial banks in Kenya. The study utilized primary as well as
secondary data on access to mobile credit and its effects on the performance
of the organization. A questionnaire was the primary data collection tool and
composed of open ended and closed ended questions. Data collected was
analyzed using multiple linear regression analysis at a 95% confidence interval.
Analyzed data was presented using tables and figures for ease of interpretation.
Operational efficiency is the goal of any manager in a customer service
driven sector. Some of the strategies to achieve operational efficiency include
managerial behavior change, promoting operational optimization and use of
technology. Mobile credit introduction improved operational efficiency in
commercial banks. Mobile credit introduction enhanced operational efficiency
in loans collection, returns on shareholders. The operational efficiency
performance indicators utilized in this study were: return on assets, earnings
per share and proportion of non-performing loans. On the other hand, proportion
of non-performing loans declined after the introduction of mobile
credit indicating increased operational efficiency in debt collection. The introduction
of mobile credit significantly enhanced organization efficiency as
measured by metrics such by brand image building, ability to adapt to market
changes and perceptions of reliability in the customer’s mind. Mobile credit
introduction improved operational efficiency in commercial banks. Mobile
credit introduction enhanced operational efficiency in loans collection, returns
on shareholders. Overall, it has been accepted that the use of technology
is one of the major strategies used to enhance operational efficiency. The
findings of this study propose that the use of mobile credit has enhanced debt
collection efficiency and revenue generation efficiency.
References
[1]
Radic, N., Fiordelisi, F. and Girardone, C. (2012) Efficiency and Risk-Taking in Pre-Crisis Investment Banks. Journal of Financial Services Research, 41, 81-101.
https://doi.org/10.1007/s10693-011-0111-1
[2]
Rutto, C. (2014) The Effect of Cost to Serve on Financial Performance: A Case of Standard Chartered Bank of Kenya. Unpublished Global Executive Masters Research Report, United States International University, 20-30.
[3]
Al-Jabir (2012) Mobile Banking Adoption: Application of Diffusion of Innovation Theory. Journal of Electronic Commerce Research, 13, 43-82.
[4]
Chijoriga, M.M. (1997) An Application of Credit Scoring and Financial Distress Prediction Model to Commercial Bank Lending: The Case of Tanzania. Ph.D Dissertation, Witrtschaftsuniversitat Wien, Vienna, 10-23.
[5]
Dash, M. and Kabra, G. (2010) The Determinants of Non-Performing Assets in Indian Commercial Bank: An Econometric Study. Middle Eastern Finance and Economics, No. 7, 94-106.
[6]
Binnet, J. and Tellez, A.C. (2008) Mobile Banking and Economic Development: Linking Adoption, Impact, and Use. Asian Journal of Communication, 18, 318-322.
https://doi.org/10.1080/01292980802344190
[7]
Grabarek, B. (2012) Using Technology to Reduce Customer Service Costs and Improve Satisfaction. Pay before Resource, 6, 161-173.
[8]
Anyasi, F.I. and Otubu, P.A. (2009) Mobile Phone Technology in Banking System: It’s Economic Effect. Research Journal of Information Technology, 1, 1-5.
[9]
Sohail, M. and Shanmugham, B. (2003) E-Banking and Customer Preferences in Malaysia: An Empirical Investigation. Information Sciences, 150, 207-217.
https://doi.org/10.1016/S0020-0255(02)00378-X
[10]
Tiwari, R., Buse, S. and Herstatt, C. (2015) Mobile Banking as Business Strategy: Impact of Mobile Technologies on Customer Behaviour and Its Implications for Banks. Technology Management for the Global Future, Proceedings of PICMET ‘06, 8-13 July 2006, Istanbul, 1935-1946.
[11]
Ching, M.C., Chuan, A.T., Sim, J.J., Kam, H. and Tan, B. (2011) Factors Affecting Malaysian Mobile Banking Adoption: An Empirical Analysis. International Journal of Network and Mobile Technologies, 2, 161-173.
[12]
World Bank (2010) Information and Communications for Development 2010: Maximizing Mobile. World Bank, Washington DC.
[13]
Dhillon, V.S. (2012) Impact of Operational Efficiency on Overall Profitability—A Case Study of GIPCL. Working Paper No.136/2012.
[14]
Munaye, H. (2009) The Application of Mobile Banking as a Strategic Response by Equity Bank Kenya Limited to the Challenge in the External Environment. Unpublished MBA Thesis, University of Nairobi, Nairobi, 25-36.
[15]
Donner, J. and Tellez, A.C. (2008) Mobile Banking and Economic Development: Linking Adoption, Impact, and Use. Asian Journal of Communication, 18, 318-322.
https://doi.org/10.1080/01292980802344190
[16]
Oluwagbemi, O., Abah, J. and Achimugu, P. (2011) The Impact of Information Technology in Nigeria’s Banking Industry. Journal of Computer Science and Engineering, 7, 25-36.
[17]
Fister, S. (2016) Banking on Mobile. PM Network, 30, 28-37.
[18]
Thomond, P. and Lettice, F. (2002) Disruptive Innovation Explored. 9th IPSE International Conference on Concurrent Engineering: Research and Applications, Cranfield, 27-31 July 2002.
[19]
Ogeni, O., Abah, J. and Achimugu, P. (2011) The Impact of Information Technology in Nigeria’s Banking Industry. Journal of Computer Science and Engineering, 7, 25-36.
[20]
Ho, S. and Mallick, S. (2006) The Impact of Information Technology on the Banking Industry: Theory and Empirics. National Chengchi University, 15-23.
[21]
Kigen, K.P. (2010) The Impact of Mobile Banking on Transaction Costs of Microfinance Institutions. Unpublished MBA Thesis, University of Nairobi, Nairobi, 25-36.
[22]
Gaitho, M. (2010) A Survey of Credit Risk Management Practices by SACCOs in Nairobi. Unpublished MBA Project, University of Nairobi, Nairobi, 15-25.
[23]
Gargallo Castel, A. and Galve Gorriz, C. (2012) The Impact of ICT on Productivity: The Moderating Role of Worker Quality and Quality Strategy. University of Zaragoza, Zaragoza. https://doi.org/10.5772/37291
[24]
Punch, K. (2003) Survey Research: The Basics. Sage, Thousand Oaks.
https://doi.org/10.4135/9781849209984
[25]
Mugenda, D.M. and Mugenda, D. (1999) Research Methods; Quantitative and Qualitative Research.
[26]
Githinji, M.W. (2010) The Relationship between Credit Scoring Practices by Commercial Banks and Access to Credit by SMEs in Kenya. Unpublished MBA Project, University of Nairobi, Nairobi, 23-25.
