Factors Influencing The Use Of Online Banking In Malawi: A Case Of Commercial Banks In Lilongwe City

Abstract

The study aimed at analysing factors influencing the use of online banking in Malawi using Lilongwe city. Research on online banking has gained attention recently in order to understand how online banking is driven and make recommendations on how it can be effectively improved to bank performance. Despite having literature in cross, the world and in Africa, studies on drivers of online banking in Malawi and in banking sector are limited. This study aimed that closing this gap by analysing factors that influence use of online banking in Malawi commercial banks. The study is of essence to banks because it provides insights on key determinants of online banking and how commercial banks can handle these factors to improve online banking usage. The study research design followed positivist philosophy, deductive approach, quantitative, survey and cross-sectional time horizon. The sampling method used was convenient sampling, and a sample size of 384 was determined using Cochran's equation from a larger population of over 1000 and 273 bank customers participated in the study. The study further collected data using a questionnaire, and a pilot study was conducted on 10 online banking customers outside Lilongwe city. The study employed multiple regression as a data analysis technique since all objectives were cause and effect and hypotheses were developed. Findings of the study show that performance expectancy (p<0.05) and demography (p<0.05) are positive and significant factors that determine the use of online banking in Malawi. On the other hand, social influence (p>0.05) and facilitating condition (p>0.05) were found to be insignificant at 95% confidence levels, making them non-predictors of use of online banking in Malawi. The study concluded that demography and performance expectancy significant in helping financial institutions enhance use of online banking. The study also concluded that the uptake of online banking is not dependent on social influence and facilitating condition. Therefore, the study recommends that banks must focus on improving online banking to improve perceptions of banking clients towards the use of online banking. Further banks must focus on commercialising online banking to literate people. The study was cross-section which only provides a snapshot how use of online banking is influenced currently. Therefore, future studies can replicate this study by using a longitudinal study.