FINANCIAL INNOVATION ON PERFORMANCE OF COMMERCIAL BANKS IN GARISSA COUNTY, KENYA
Abstract
This study sought to establish the effect of bank innovations on the financial performance of commercial banks in Garissa County, Kenya. The study specifically sought to establish the effect of agency banking and mobile banking of the commercial banks in Garissa County, Kenya. The study was anchored on task technology fit model and technology acceptance theory. A descriptive research design was used. The target population was all commercial banks regulated by the Central Bank in Garissa County, Kenya. Employees in the human resource, finance, marketing, research and development and information technology departments who totaled to 215 were included in the study. A sample was developed via Yamane Formula through simple random sample to get a sample size of 170 respondents spread across all the commercial banks in Garissa County, Kenya. The study used primary data collected using semi-structured questionnaires. The data collected was analyzed using inferential and descriptive statistics with the aid of SPSS software. At 5% level of significance, the study established that agency banking (β=0.175, p=0.001<0.05) had a positive and significant effect on financial performance of commercial banks. Mobile phone banking (β=0.161, p=0.001<0.05) had a positive and significant effect on financial performance of commercial banks. The study recommended that the branch managers of all commercial banks operating in Garissa County should increase investment inn agency banking to positively influence financial performance of their institutions. The senior management team in the head office of commercial banks operating in Garissa County should increase investment in mobile phone banking platforms so as to positively influence financial performance of their organizations.
Key Words: Agency Banking, Mobile Banking, Innovation and Financial Performance
CITATION: Mohamud, A. A., & Mungai, J. (2019). Financial innovation on performance of commercial banks in Garissa County, Kenya. The Strategic Journal of Business & Change Management, 6 (1), 491 – 504.
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DOI: http://dx.doi.org/10.61426/sjbcm.v6i1.1073
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