EFFECTS OF MOBILE BANKING ON CAPITAL STRUCTURE OF COMMERCIAL BANKS IN KENYA

Abstract

Purpose: The aim of this study was to explore the effects of mobile banking on the capital structure of commercial banks in Kenya.
Materials and methods: The study adopted descriptive cross sectional survey. The study population was 43 commercial banks in Kenya as at December 2015. The study adopted a descriptive survey research design that is cross-sectional in approach. The study covered the period 2010 to 2015. Secondary data set was gathered from the Audited Financial statements of the Banks, those deposited at the Nairobi Securities Exchange and CBK annual banking survey reports. A survey of all the 43 commercial banks was undertaken banks. A census of all the 43 banks was done. Statistical Package for Social Sciences (SPSS) version 21.0 complimented by STATA software was used to aid in data analysis.
Results: The study revealed that amount of loans issued, amount of withdrawals, amount of deposits and number of mobile bank users were satisfactory variables in explaining capital structure of commercial banks in Kenya. This is supported by coefficient of determination of 59.41%. Result findings revealed that amount of deposits was positively and significantly related to capital structure of the commercial banks.
Recommendations: It is therefore recommended that commercial banks focus on building a strong relationship with customers. Further, it is recommended that commercial banks expand the mobile banking through adoption of mobile technology. The study used secondary data to determine the relationship between mobile banking and capital structure of commercial banks in Kenya.