ABSTRACT
The study makes an analysis of mobile money and retail
banking services in Kumasi Metropolis using a sample of 130 respondents. In
order to conveniently interpret the data, the results are presented in tables
and charts. A number of key findings emerged from the field survey where
the study shows that the retail banking in Kumasi faces peculiar challenges in
service quality, distribution, and cost. However, the challenges and
perceptions of the retail banking in the lives of mobile money account users
allow the adoption of mobile money services to thrive among the lower-income
users. Based on the findings of the study, it was noted that the increasing use
of mobile money services among the low earning income category is highly
associated with decreases in retail bank users in a way that this tends to pose
threat to the growth of retail banking. It is however recommended that banks
should consider the possibility of Collaboration Model to involve mobile
network operators in the mobile payments value chain that are user friendly and
develop them so as to enable deposit/withdraw of money using mobile phone which
will meet different customer requirements and capture market niches that
expands on market share leading to improved financial performance.
CHAPTER
ONE
INTRODUCTION
1.1 Background of
the Study
Retail banking entails services that commercial banks to
offer strictly to individual customers. The term also applies to a section of
the bank that has direct dealings with the customers. Some of the services
offered by retails include; personal loans, transactional accounts, savings,
mortgages, credit and debit cards (Wikipedia, 2016). Increasingly, the extent
of mobile money services is undoubtedly revolutionising retail banking in
Africa without exempting Ghana. The option of mobile money service has caught
up so fast that it has presented an alternative financial service to many
Africans to use mobile phone as a platform for payment and receipt of a form of
currency termed ―Mobile Money.
A cursory study of the introduction of mobile money in
Africa revealed that the idea of mobile money started in 2002 when the
institute of International Development-UK funded research found citizens of
Botswana, Uganda, and Ghana were of their own accord using airtime as a
substitute for money transfer. Following this, in 2004 MCel in Mozambique
introduced the first authorized airtime unit trade off which was an antecedent
towards M-Pesa. The idea was further developed through a series of piloting to
implement changes to the initial design. Later in April 2007, students
developed soft wares during their project in Kenya (Appiah-Danquah, 2014),
Vodacom and Safaricom, mobile network operators (MNO) were not considered and
given the mandate to take deposits. Banks established new mobile phone
transfers and money payment systems, known as M-Pesa (M for mobile, pesa is
Swahili for money) (Mengich et al., 2014).
M-Pesa was successful in Kenya and several telecoms in
Africa started adopting this into their services (Appiah-Danquah, 2014). Mobile
Telecommunication Network (MTN), Ghana‘s leading telecommunications provider,
was the first to partner nine to launch mobile money services in Ghana.
Subscribers of MTN after the launch could undertake transactions using their
mobile phones. Subscribers accessed the service without necessarily opening a
bank account (Oluniyi, 2009 ). Mobile money service is utilised for various
reasons by Ghanaians to send and receive money from friends and loved ones,
payment of fees, remittances, and payment of merchants to aid critical business
processes (Kofigah, 2010).
The benefits of mobile money include convenient savings,
ease of use, bringing the unbanked into a virtual banking, transformation of
the economy among others (Mengich et al., 2010). This revolution is gradually
transforming and upgrading the use of mobile phones from ordinary making and
receiving calls, substituting for travelling efforts, allowing quicker and
easier access to information. In most developing countries, the number of bank
account owners is fewer than the number of mobile phone owners (Nandhi, 2012).
In Ghana, while bulks of Ghanaians have no access to a bank account or formal
financial service because mobile money offers new possibilities for making
financial services more inclusive in Africa (United Nations, 2012).
Unlike conventional banking and financial services, mobile
money also offers the possibilities to make deposit, withdrawal and to transfer
money at a low cost compared to the traditional banking system where some
transactions would be done within the premises of the bank where people get
stuck in queues. The economy is practically moving away from a cash economy to
a cashless electronic money system. Money transfers institutions and Banks are
facing fierce competition from Airtel Money, MTN Mobile Money, Tigo Cash (Sakyi,
2014) and now Vodafon Cash. In all, there are four Mobile Network Operators
(MNOs) in Ghana offering mobile money services. As a result, there was a need
to make a comparison study between retail banking and retail banking.
1.2 Statement of
Problem
Using your handset to receive and send money is described as
mobile money services (Mauree, 2013). In Ghana, savings and loan companies,
rural banks and commercial banks are mandated to offer financial services for
people living in urban and rural environments (Boakye-Yiadom, 2009). To
revolutionize the financial services of the country to address the needs of
individuals and small businesses, Mobile Network Operators (MNOs) have made
investments to create networks that reach further and deeper into rural areas
(United Nations, 2012). These networks provide mobile money service to many
Ghanaians. In 2014, the telecommunications giant, Mobile Telecommunication
Network (MTN)
Ghana witnessed an unprecedented growth of its subscribers to 5million.
According to, Kunateh (2014) the growth of mobile money facilities serve as a
threat to microfinance institutions in Sub-Saharan Africa. People prefer
financial services that are reliable, convenient and affordable (Kamukama &
Tumwine, 2012). MMS has created unmatched competition between the Banks and
Mobile Network Operators. According to Sturmius (2012), MMS growth is gradually
taking many customers away from the banking hall and has significantly affected
retail banking which has further affected liquidity.
In the review of literature, it was found that no attempt
was made to make analysis of mobile money and retail banking service in Kumasi
hence a knowledge gap and this thesis proposes to bridge this gap.
1.3 Objectives of
the study
The study makes an analysis of mobile money and retail
banking services in Kumasi Metropolis. The specific objectives include the
following;
1. To
examine users preferences of mobile money services and retail banking services
in Kumasi Metropolis;
2. To
assess the accessibility of mobile money and retail banking services in Kumasi
metropolis;
3. To
find out the challenges of retail banking in Kumasi Metropolis.
1.4 Research
Questions
The following
unanswered questions motivated the study;
1. Do
users prefer mobile money services to retail banking services in Kumasi
Metropolis?
2. Is
mobile money service more accessible to retail banking in Kumasi Metropolis?
3. What
are the challenges of retail banking in Kumasi Metropolis?
1.5 Significance of
the Study
Since Money, in any form, remains the set of asset in an
economy used regularly by people as a medium of exchange, this study will be a
significant endeavour in establishing a statistical relationship between the
usage of mobile money services and retail banking by people living within
Kumasi metropolis to carry out their financial transactions and satisfy their
financial needs. The study findings will be useful in contributing to
the pool of knowledge on retail banking and MMS.
1.6 Scope of the
Study
The study focuses on mobile money services within Kumasi
metropolis. The population of study was categorized into four: Bank account
holders who are not mobile money subscribers, Mobile money subscribers who are
not bank account holders, Bank account holders who seldomly use mobile money
services, and Mobile money subscribers who seldomly use bank accounts. For the
purpose of this research, the focus is on determining the fraction of mobile
money services in the Kumasi metropolis that use mobile money service to carry
out their financial transactions. This category of people use mobile money
services to carry out their businesses and financial transactions and the
impact of the mobile money services on retail banking within the Kumasi
metropolis.
1.7 Organisation of
Study
The thesis is prepared in five chapters. Chapter One is the
introduction and consist of the background of the study, objectives of the
study, statement of the problem, hypothesis of the study, significance of the study,
scope of the study (limitation/delimitations), and organisation of the work.
Chapter Two reviews theoretical and empirical literature relevant to the study.
The chapter opens with an introduction and discussion of the research process
and concludes with the summary of what previous researchers have said and how
they relate to the subject of this study. Chapter Three presents the research
methodology for the study. The presentation and analysis of data collected for
the study are also discussed in Chapter Four. Chapter Five is the
summary and conclusions which summarizes the entire study, giving
recommendations to set a platform for further
study to be conducted on the subject. The chapter concludes with list of
references and appendices used in
the entire study.
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Item Type: Ghanaian Topic | Size: 63 pages | Chapters: 1-5
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