Technology has greatly advanced playing a major role in improving the standards of service delivery in the financial sector. Days are long gone when customers would queue in the banking halls waiting to pay their utility bills, school fees, or any other financial transactions. They can now do this at their convenience by using their phones or over the internet from the comfort of their homes.
Today, banks have welcomed wireless and mobile technology into their boardroom to offer their customers the freedom to pay bills, plan payments, and many other services while stuck in traffic or while moving about. More people than ever are banking on the move rather than visiting bank offices.
E-payment done by mobile banking (M-banking) is rapidly becoming one of the latest trends of e-banking. During the 21st century, mobile banking advanced from providing mere text messaging services to that of internet banking where customers do not only view their balances and set up multiple types of alerts but also transact other activities such as fund transfers, redeem loyalty coupons, deposit cheques via the mobile phone and instruct payroll-based transactions.
Different factors play a vital role in the adoption of these relatively new services. These factors could be social, economic, or technological. Some of the social factors identified include conceptualizing electronic money, the social context of transactions, awareness, attitude towards change (embracing new technology), trust in one’s bank or service provider, the convenience of the service, and the comfort that people have in using these services.
Economic factors include mobile phone access, cost of the service, marketing strategies, implementation cost, and availability of alternatives.
In Kenya, the adoption of M-banking services is still very low. M-banking promises a lot more to the users, including interest on funds saved, credit history, and access to loans. This leads to questioning the banking sector as to whether the un-banked user has been well understood. Mobile networks in Kenya offer money services in the name of M-Pesa by Safaricom, Orange Money by Orange, and Airtel Money by Airtel. Currently, the mobile money market size is about 15 million users transferring Ksh2 billion daily, of these over 14 million are Mpesa customers. There has since been a rapid growth in the adoption of mobile banking by commercial banks in Kenya in recent years, evidenced by the numerous advertisements in the media on the various mobile banking services being offered by these banks.
The Sacco sub-sector comprises both Deposit-Taking and non-Deposit Taking Saccos.
The aspect of capital adequacy and cost of adopting mobile banking in Saccos remains a challenge in the uptake of new technology.
Sacco management should focus on the growth and expansion of the firm to enjoy economies of scale such as reduction of innovation cost and other operating costs in the Sacco.
With options like agency banking, Saccos will be able to reach the unbanked populations. Get the unfair advantage and capitalize in places where other financial institutions have abandoned.
They will also help in solving the unemployment challenges by giving people an opportunity to serve as agents with lower operational costs.
The writer Neville Moninga Siro is a Sacco member and current sub-county Crops Development Officer in the Ministry of Agriculture, Kisii county
