Mobile Banking And Its Effect On Financial Performanceof Commercial Banks In Uganda. Case Study Standard Chartered Bank (Uganda) Limited

ABSTRACT

The introduction of customer friendly service by the bank such as m-banking, internet banking, Automated Teller Machines among others as a way of delivering convenience

service to customer has become common in the recent year as a way of gaining competitive advantage and maintaining customer loyalty and increase share in order to improve the

financial position of a company. The study main objectives were; to study the m-banking technology used at Standard Chartered Bank (Uganda), to examine the use of m-banking and

various services provided through m-banking at Standard Chartered Bank (Uganda), to establish the relationship between m-banking and financial performance of Standard

Chartered Bank (Uganda). The methods used to collect data basically through self administered questionnaires both structured and semi-structure, interviews and observation.

The Data collected was analyzed qualitatively and quantitatively. The study was also backed by literature review on m-banking and banking sector in Uganda The study findings indicate

that one need to register with bank and maintain an account with both the bank and telecom company such as MTN. The services offered by standard chartered bank (Uganda) include;

Account Balance Enquiry, Fund Transfer between Accounts, Bills payment (utility bills) among others. The introduction of m-banking in Uganda has contributed to customer loyalty,

convenience and also has influenced the financial performance of the banking sector in Uganda positively. Therefore there is a positive relationship between m-banking and financial

performance of a bank. Conclusion and recommendation were made towards strengthening the contribution of m-banking to financial performance of the banking sector in Uganda. The

researcher recommends that; The bank should conduct research on other possible m-banking packages, Free training and refreshing training should be provided to staff of the bank and if

possible to customers and the bank should provide toll free line to enable customers who want to use the system and also in case of any problem that deserve attention of the ba

TABLE OF CONTENTS

DECLARATION ................................................................................................................ i

APPROVAL.. ..................................................................................................................... ii

DEDICATION .................................................................................................................. iii

ACKNOWLEDGEMENT ................................................................................................ iv

TABLE OF CONTENTS ................................................................................................... v

LIST OF TABLES ............................................................................................................. x

LIST OF FIGURES ........................................................................................................... xi

ACRONYMS ............................................................................................... xii

ABSTRACT .............................................................................................. xiii

CHAPTER ONE .....................................................•...... 1

INTRODUCTION ..................•..•.........•.........•...........•.................•...................•........•....... 1

I . I Background .................................................................................................................. I

I. I. I Historical Background ............................................................................................... I

I. I .2 Conceptual Perspective ............................................................................................. 3

I. I .3 Contextual perspective .............................................................................................. 4

I. I .4 Theoretical perspective ............................................................................................. 4

I .2 Problem Statement ....................................................................................................... 6

I .3 Purpose of the study ..................................................................................................... 7

I.4 Specific objectives of the study .................................................................................... 7

I .5 Research Questions ...................................................................................................... 7

I.6 Hypothesis of the study ................................................................................................ 7

I .7 Scope of the study ........................................................................................................ 7

I . 7. I Content scope ............................................................................................................ 7

I.7.2 Subject scope ............................................................................................................. 8

I .7.3 Geographical scope ................................................................................................... 8

1.8 Significance I justification of the study ........................................................................ 8

CHAPTER TW 0 ............•............................•.•.•.........................•......•............................... 9

LITERATURE REVIEW ....•....................•..............•....•....•............................................. 9

2.0 Introduction .................................................................................................................. 9

2. I Theoretical Review ...................................................................................................... 9

v

2.1.1 Efficient Structure versus Market Power Theories ................................................... 9

2.1.2 Financial lntennediation Theory ............................................................................. 10

2.1.3 Innovation Diffusion Theory {IDT) ........................................................................ I 0

2.1.4 Modem economists' theory ..................................................................................... 11

2. 2 Conceptual review ..................................................................................................... 12

2.2.1 Banking sector in Uganda ....................................................................................... 14

2.2.2 Standard Chartered Bank (Uganda) Limited ........................................................... l5

2.3 Empirical review ........................................................................................................ 16

2.3.1 Mobile banking (M-banking) .................................................................................. 16

2.3.2 over view of mobile banking in Uganda ................................................................. 17

2.3.3 Benefits of mobile banking ..................................................................................... l8

2.3.4 Challenges ofM-banking ........................................................................................ l9

2.3.5 Services offered through m-banking ....................................................................... 20

2.4 M-banking in Standard Chartered bank (Uganda) ..................................................... 21

2.4.1 How to access m-banking service at Stanchart Uganda .......................................... 21

2.4.2 How m-banking works at standard chartered bank (Uganda) ................................. 21

2.5 Financial performance ................................................................................................ 22

2.6 Standard Chartered Bank (Uganda) Financial Performance ...................................... 23

2.6.1 Relationship between m-banking and financial performances ............................... 23

2.6.2 Money transfer across accounts and financial perfonnances .................................. 23

2.6.3 Balance inquire and its effect on financial performances ....................................... 23

2.6.4 Payments of utility bills and its effect on financial pelformances .......................... 23

CHAPTER THREE ................................................................................. 25

RESEARCH METHODOLOGY .................................................................................. 25

3.0 Introduction ........................................................................................... 25

3.1 Research desigo .......................................................................................................... 25

3.2 Survey population ...................................................................................................... 25

3.3 Sampling design and Sampling size ........................................................................... 25

3.3.1 Sampling desigo ................................................................ 25

3.3.2 Sample size ............................................................................................... 26

3.4 Data collection methods and instrument .................................................................... 26

1.4.1 Data source ............................................................................................... 26

.4.2 Collection methods and instrument ......................................................................... 27