The Pro-Poor Factors, Demographic Factors, Adoption And Usage Of Mobile Financial Services In ...

185 Pages·2017·2.35 MB·English

THE PRO-POOR FACTORS, DEMOGRAPHIC FACTORS,
ADOPTION AND USAGE OF MOBILE FINANCIAL
SERVICES IN KENYA.

BY
ABDUBA IBRAHIM HALKANO

A DOCTORAL THESIS PRESENTED IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
DOCTOR OF PHILOSOPHY IN BUSINESS ADMINISTRATION,
SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI.
2017.
DECLARATION

This thesis is my own original work and has not been presented for an award of any
degree in any university.
Signature: ------------------------------------------- Date: ----------------------------
Abduba Ibrahim Halkano
D80/72703/2012
PhD Candidate.

This thesis has been submitted for examination with our approval as the university
supervisor.
Signature: ----------------------------------------- Date: --------------------------------
Dr. James Njihia
Supervisor
School of Business
University of Nairobi.
Signature: ----------------------------------------- Date: --------------------------------
Dr. Litondo Kate
Supervisor
School of Business
University of Nairobi.
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© COPYRIGHT
All rights reserved. No part of this thesis may be used or reproduced in any form by any
means, or stored in a database or retrieval system, without prior written permission of the
author except in the case of brief quotation embodied in reviews, articles and research
papers. Making copies of any part of this thesis for any purpose other than personal use is
a violation of the Kenyan and International copyright laws. For any information required
to contact the author.

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DEDICATION
This is dedicated to my dear wife Halima Saadia, Daughters Tume and Chule, Sons
Halkano and Kusu, little brother Guyo and the entire Dullos family.

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ACKNOWLEDGEMENTS
I acknowledge the multiple inputs, guidance, support and direction from Dr. Muranga
Njihia and Dr. Kate Litondo for their encouragement, great insights and motivation in
this journey. My colleagues in this journey have significantly contributed to this endeavor
who include Dr. Oredo, Dr. Borura, Dr. Muendo , Mr Kamau Mwangi and Mr Gabriel
Kamau.
Thank You All.
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TABLE OF CONTENTS
Page
DECLARATION ......................................................................................................... i
© COPYRIGHT .......................................................................................................... ii
DEDICATION ........................................................................................................... iii
ACKNOWLEDGEMENTS ....................................................................................... iv
LIST OF TABLES ..................................................................................................... ix
LIST OF FIGURES .................................................................................................... x
ABBREVIATIONS AND ACRONYMS .................................................................. xi
ABSTRACT .............................................................................................................. xii
CHAPTER ONE: INTRODUCTION ..................................................................... 1
1.1 Background ................................................................................................... 1
1.1.1 Mobile Financial Services............................................................................. 3
1.1.2 The Pro-Poor Perspective ............................................................................ 5
1.1.3 Pro-Poor Factors and Mobile Financial Services.......................................... 6
1.1.4 Adoption and Mobile Financial Services ...................................................... 7
1.1.5 Demographic Factors and Mobile Financial Service .................................... 8
1.1.6 Usage and Mobile Financial Services ........................................................... 9
1.1.7 Poverty in Kenya......................................................................................... 10
1.1.8 Mobile Financial Services in Kenya ........................................................... 12
1.2 Research Problem ....................................................................................... 15
1.3 Research Objectives .................................................................................... 17
1.4 Value of the Study ...................................................................................... 18
1.5 Chapter Summary ....................................................................................... 19
CHAPTER TWO: LITERATURE REVIEW ...................................................... 20
2.1 Introduction ................................................................................................. 20
2.2 Theoretical Foundation ............................................................................... 20
2.2.1 Social Capital Theory ................................................................................. 20
2.2.2 Theories of Poverty ..................................................................................... 21
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2.2.3 Technology Adoption Theories .................................................................. 23
2.2.4 Technology Acceptance Model (TAM) ...................................................... 24
2.2.5 Unified Theory of Acceptance and Use of Technology ............................. 26
2.2.6 UTAUT Extension to Pro-Poor Perspective ............................................... 29
2.3 Empirical Review: Pro-Poor Perspective and Mobile Financial Services .. 32
2.3.1 Contextual Factors and Adoption of Mobile Financial Services ................ 33
2.3.2 Community Factors and Adoption of Mobile Financial Services .............. 35
2.3.3 Cultural Factors and Adoption of Mobile Financial Services .................... 37
2.3.4 Cultural, Community, Demographic Factors and Adoption of MFS.......... 37
2.3.5 Adoption and Usage of Mobile Financial Services .................................... 39
2.4 Research Gap .............................................................................................. 41
2.5 Conceptual Framework ............................................................................... 43
2.6 Hypothesis................................................................................................... 44
2.7 Chapter Summary ....................................................................................... 44
CHAPTER THREE: RESEARCH METHODOLOGY ..................................... 45
3.1 Introduction ................................................................................................. 45
3.2 Research Philosophy ................................................................................... 45
3.3 Research Design.......................................................................................... 46
3.4 Population and Sampling ............................................................................ 46
3.5 Data Collection ........................................................................................... 47
3.6 Pilot Study ................................................................................................... 48
3.7 Operationalization of Variables .................................................................. 49
3.8 Reliability and Validity ............................................................................... 50
3.9 Data Analysis .............................................................................................. 51
CHAPTER FOUR: DATA ANALYSIS AND FINDINGS.................................. 54
4.1 Introduction ................................................................................................. 54
4.2 Study Response Rate................................................................................... 54
4.3 Demographic Data ...................................................................................... 55
4.4 Contextual Factors ...................................................................................... 56
4.4.1 Factor Analysis of the Contextual factors ................................................... 58
4.5 Community Factors ..................................................................................... 61
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4.5.1 Factor Analysis of the Community Factors ................................................ 64
4.6 Cultural Factors ........................................................................................... 67
4.6.1 Factor Analysis of the Cultural Factors ...................................................... 69
4.7 Adoption of Mobile Financial Services ...................................................... 72
4.7.1 Factor Analysis on the Adoption Indicators ............................................... 74
4.8 Usage of Mobile Financial Services ........................................................... 77
4.8.1 Factor Analysis on the Usage indicators ..................................................... 80
4.9 Measurement Model Estimation ................................................................. 82
4.9.1 Construct Reliability ................................................................................... 85
4.9.2 Convergent Validity .................................................................................... 86
4.9.3 Discriminant Validity.................................................................................. 87
4.9.4 Collinearity ................................................................................................. 88
4.10 Measurement Model Overall Review ......................................................... 88
4.10.1 Factor Loadings .......................................................................................... 89
4.10.2 Path Coefficients ......................................................................................... 90
4.10.3 Summary of Path analysis ........................................................................... 94
4.10.4 The Modified Measurement Model ............................................................ 99
4.10.1 Chapter Summary ..................................................................................... 100
CHAPTER FIVE: DISCUSSION OF FINDINGS............................................. 101
5.1 Introduction ............................................................................................... 101
5.2 Contextual Factors, Adoption, and Usage ................................................ 102
5.3 Community Factors, Adoption, and Usage ............................................... 103
5.4 Cultural Factors, Adoption and Usage ...................................................... 105
5.5 The Demographic Factors on Adoption and Usage .................................. 106
5.6 Adoption and Usage .................................................................................. 108
5.7 Chapter Summary ..................................................................................... 110
CHAPTER SIX: CONCLUSIONS AND RECOMMENDATIONS ................ 111
6.1 Introduction ............................................................................................... 111
6.2 Summary of Findings ................................................................................ 111
6.3 Conclusions of the Study .......................................................................... 114
6.4 Implications of the Study .......................................................................... 117
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6.4.1 Theoretical Contributions ......................................................................... 117
6.4.2 Contributions of the Study to Knowledge ................................................ 118
6.5 Policy Recommendations.......................................................................... 119
6.6 Recommendations for Management Practice ........................................... 120
6.7 Limitations of the Study............................................................................ 121
6.8 Suggestions for Further Research ............................................................. 122
6.9 Chapter Summary ..................................................................................... 123
REFERENCES ...................................................................................................... 124
APPENDICES ....................................................................................................... 134
APPENDIX A: The SEM MODEL ........................................................................ 134
APPENDIX B: The Questionnaire ......................................................................... 135
APPENDIX C: The MPESA Tariff 2015 ............................................................... 144
APPENDIX D: The Research Output Data ............................................................ 145

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LIST OF TABLES
Table 2.1 Summary of Relevant Studies and Research Gaps ........................................... 41
Table 3.2 Operational Definitions and Measurement of Research Variables ................... 49
Table 3.3 Summary of Data Analysis and Procedures ..................................................... 53
Table 4.4 Contextual Factors Descriptive Statistics ......................................................... 56
Table 4.5 Contextual Factors Factor Analysis .................................................................. 59
Table 4.6 Community Factors Descriptive Statistics ........................................................ 61
Table 4.7 Community Factors Factor Analysis ................................................................ 65
Table 4.8 Cultural Factors Descriptive Statistics .............................................................. 67
Table 4.9 Cultural Factors Factor Analysis ...................................................................... 70
Table 4.10 Adoption Descriptive Statistics ...................................................................... 73
Table 4.11Adoption Factor Analysis ................................................................................ 75
Table 4.12 Usage Descriptive Statistics............................................................................ 78
Table 4.13 Usage Factor Analysis .................................................................................... 81
Table 4.14 Type of Constructs .......................................................................................... 84
Table 4.15 Reliability Analysis Data ................................................................................ 86
Table 4.16 Average Variance Extracted ........................................................................... 86
Table 4.17 Fornell-Larcker Criterion ................................................................................ 87
Table 4.18 Inner VIF Values ............................................................................................ 88
Table 4.19 Factor Loadings .............................................................................................. 90
Table 4.20 Path Coefficients ............................................................................................. 91
Table 4.21 Bootstrapping Results ..................................................................................... 92
Table 4.22 Summary of Path Coefficients ........................................................................ 93
Table 4.23 Summary of Hypothesis Testing Results ........................................................ 98

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