Influence of regulatory framework on the relationship between factors influencing cashless transactions and growth of cashless transactions
Date
2022
Authors
Kirui, Ernest Cheruiyot
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The study sought to examine the influence of the regulatory framework on the growth of cashless transactions in commercial banks in Kenya. The specific objectives were to evaluate the extent of evolution of the digital currency in Kenya, establish factors influencing the growth of cashless transactions of commercial banks in Kenya and examine the controlling effect regulatory framework on the growth of cashless transactions of commercial banks in Kenya. The study was based on three theories, namely the Technology Acceptance Model, Schumpeter's theory of innovation and the theory of diffusion of innovations. The study employed the explanatory research design. The study adopted a positivism approach. The target population included all 41 licensed commercial banks in Kenya. The study included the entire population as the sample size. The researcher picked managers from the 41 commercial banks. Two managers from the human resource department, finance department, marketing department and ICT department were randomly picked. Hence, the number of respondents targeted for the questionnaires were 328. Questionnaires were used to collect primary data. The data was analyzed using descriptive and inferential statistics. The regression results showed that perceived risks, perceived ease of use, financial literacy and financial innovation could explain 69.2% of the variations in the growth of cashless transactions of commercial banks in Kenya. The perceived risks is positively and significantly related to the growth of cashless transactions (β=0.306, p=0.000). It was found that perceived ease of use is positively and significantly related to the growth of cashless transactions (β=0.172, p=0.000). In addition, the study found that financial literacy is positively and significantly related to the growth of cashless transactions (β=0.072, p=0.004). Finally, the study found that financial innovation is positively and significantly related to the growth of cashless transactions (β=0.469, p=0.000). The study found that regulatory framework has a controlling effect on the growth of cashless transactions of commercial banks in Kenya. The study found that the Central Bank of Kenya proposes introducing a digital currency to ease cross-border payments and complement mobile money in the local market. The study recommended that commercial banks in Kenya should increase mass education/enlightenment on finance management so that people can achieve the most from the latest development in the cashless system. The government should develop a regulatory framework with guidelines on how commercial banks should implement internet banking. Another study is recommended in other financial sectors, such as microfinance institutions. Moreover, future researchers could also introduce controlling variables other than regulatory frameworks, such as ownership structure and firm characteristics.
Description
A Thesis submitted in partial fulfillment of the requirements for the award of the Degree of Masters of Business Administration at Strathmore University Business School
Keywords
Regulatory framework, Cashless transactions, Commercial banks_Kenya