EFFECT OF MOBILE BANKING ON FINANCIAL PERFORMANCE OF SAVINGS AND CREDIT CO-OPERATIVE SOCIETIES IN NAKURU CENTRAL BUSINESS DISTRICT, KENYA

In keeping with the advancement in technology, savings and credit cooperative societies have in the recent past undergone major technological leaps in the provision of banking services by adoption of mobile banking technology. This model of banking was particularly useful in providing efficiency and accessibility of banking services without the barriers of location and time. Many studies have been done to assess the effect of mobile banking on financial inclusion but not many studies have been carried out in the Kenyan banking sector in respect of the effect of mobile banking on performance of savings and credit cooperative societies (SACCOs). This research sought to study the effect of mobile banking on financial performance of SACCOs in Nakuru Central business district, Kenya. The study adopted descriptive research design. A census survey was carried out to all the 11 SACCOs licensed by Sacco Societies Regulatory Authority since their total population was small. From each SACCO, the Manager, Finance Officer, Mobile Banking Officer, Information Technology Officer, Loans Officer, Customer Service Officer  and Operations Officer were issued with questionnaires on a drop and pick later basis. Out of the 77 questionnaires issued, a total of 66 were returned. Data collected was cleaned, coded, keyed and analyzed quantitatively using descriptive statistics. The data was analyzed using mean, figures, standard deviation and frequency tables. The study was guided by modern economics theory, financial intermediation theory and innovative diffusion theories. From the research findings, the study found that on average, the amount of mobile banking transactions have increased steadily from the period 2010 to 2015. The growth was found to have been motivated by the convenience offered by the mobile banking service. The study variables further revealed that there is a positive relationship between mobile banking and the financial performance of SACCOs. The findings further indicated that majority of the respondents were significantly (strongly agreed and agreed) (2  31.6,P  0.001) with the mobile banking that it has led to increased financial performance. The study recommends that all the SACCOs need to provide as many mobile banking services. This was because of the direct relationship of mobile banking and the financial performance especially as the industry moves into a technologically competitive environment. The study also recommends that policy makers keep a keen eye on the developments of mobile banking as it is a new platform which offers financial opportunity for SACCOs as the world moves into a digital age to ensure it does not lose its regulatory role.