Mobile Banking: A Strategic Approach to Promote Financial Inclusion for Women Entrepreneurs?

Abstract

Financial inclusion denotes provision of inexpensive financial services like savings, loans, access to payments and remittance facilities, and insurance services by the already recognized system to those who are likely to be excluded. Compared to the UK’s 6% and Ghana’s 12%, Kenya’s financial exclusion of 23% is far adrift and a springboard towards establishing barriers to acceptable inclusion standards. This gap informed this study, which was intended to examine the strategic approaches adopted by the Kenyan commercial banks in promoting financial inclusion of women entrepreneurs. This paper however concentrates on mobile banking as one of the strategic approach used by the banks. Towards meeting this objective, the study adopted a descriptive survey research design, taking the heads of the relevant target strategic units in the 11 NSE listed commercial banks as the study population. The study used primary data obtained from the banks through administration of semi-structured questionnaire. Obtained data were analyzed using descriptive and inferential statistical techniques. The study found that the strategic approaches banks adopted giving way to application of alternative banking channels to women entrepreneurs had significant effects on financial inclusion, where previously unbanked women entrepreneurs got a chance to own formal accounts. The findings indicate that under mobile banking there were significant products which were strategically designed to attract women entrepreneurs. However, banks were still cautious in offering customers products which would compromise the institutions’ return capability. This informed the rationale behind small mobile-credit volumes offered on partnership between the banking institution and phone service providers. On the basis of the study’s findings, the study recommended that commercial banks should enter into long-lasting and beneficial strategic partnerships with a wide range of service providers towards ensuring that women entrepreneurs have equally wider service alternatives. In addition, it is recommended that banking institutions should seek further innovations in enhancing their system infrastructures and adoption of cheaper internet alternatives.