Effect of mobile technology on financial inclusion in Kitui County, Kenya

Abstract

Only 14% of Kitui County residents has secondary level education and above and is working for pay. Majority of the work force population is engaged in SMEs where they generate income to sustain their daily needs. Achieving financial inclusion will allow low income people to access financial services and their business will blossom. This study analyses in depth the effect of mobile phone technology on financial inclusion in Kitui County, Kenya. This study was guided by four objectives which includes: examining the effects of access to mobile phone on financial inclusion in Kitui county, Kenya, determining the effect of financial products offered through mobile phone technology on financial inclusion in Kitui county, assessing the effect of quality mobile phone services on financial inclusion in Kitui county, Kenya and finally assessing the effect of freedom to choose mobile network operator on financial inclusion in Kitui county, Kenya. The study adopted systematic research design. This study targeted a population of 7060 individual residents of major towns of Kitui County. The target population included clients of Mpesa agents, petrol stations, supermarkets and mobile banking agents. The study used stratified sampling technique to select a sample of 351. The research used a researcher administered questionnaire to collect data. Data was analysed descriptively using SPSS and presented in form of tables, graphs and figures. Correlation analysis was run to check for interdependence among the factors. Finally, a univariate and multivariate regression analysis was conducted to estimate the relationship. The determination coefficient as measured by the adjusted R-squared presents was 91.4% which shown a strong relationship between dependent and independent. The study revealed that there is a positive impact between financial inclusion and mobile phone technology used. The mobile operators reported generating high revenues from mobile money transfers which was fueled by a high number of consumers moving money in their bank account using their mobile phones. Further the Ease of access to mobile services network has been a key contributor to the enhancing smooth service delivery in financial inclusion. Finally, the study recommends that policy makers should consider mobile technologies in their formulation of policies because despite negligible relationship between mobile technology and financial inclusion, the impact could be pronounced if much change is recorded in technological developments and more customers adopt mobile banking services