Mobile Banking Services and Financial Performance of Financial Institutions in Eastern Uganda, a Case Study of Equity Bank (Ltd), Mbale Branch

Abstract

The study investigated the effect of mobile banking services on financial performance of banks in Uganda focusing on Equity Bank as a case. The study undertook three objectives; to establish the effect of mobile financial information services, mobile transfer and mobile deposits on financial performance of equity bank, Mbale Branch. The study adopted a cross sectional design triangulating both quantitative and qualitative approaches. A population size of 50 was targeted where a sample size of 44 respondents was drawn from it. Data was collected using both interviews and questionnaires while the analysis involved the mixed approach. Qualitative data was analyzed using the induction method using thematic approach while quantitative data was analyzed by use of SPSS. The latter involved use of descriptive followed by inferential statistics. Results of the study found the existence of a positive significant relationship between mobile financial information services and financial performance (r=0.501; P=0.000). Results also found the existence of a positive significant relationship between mobile transfer and financial performance (r=0.619; P=0.000). Also results revealed the existence of a positive and significant effect of mobile deposit and financial performance (r=0.663; P=0.000). Multiple regression results indicated that all the three variables accounted for 55.5% of financial performance while the remaining 44.2% was attributed to other factors. Of the three variables, standardized coefficients regression results revealed that mobile transfers was the most significant predictor of financial performance (β=0.351) followed by mobile deposits (β=0.295) and lastly mobile financial information services (β=0.290). The study recommended that management and the leadership of financial institutions in eastern Uganda such as Equity Bank should conduct mobile banking services if they have to improve their financial performance levels.