A model for user acceptance of digital banking services by the informal sector in Uganda: a case of Kampala Owino market traders

Abstract

Despite the high penetration rates of digital banking services in developed countries such as UK with 71% and Finland with 74%, the user acceptance of digital banking services is still low in Uganda. For example, ATM is 1%, debit card usage is 28%, credit card is 14% while POS is 20%. This study aimed at developing a user acceptance model for digital banking services by the informal sector in Uganda, a case of Kampala Owino Market traders. In this study, Design Science was adopted to achieve the goals of the study. Primary data was obtained from 200 Owino market traders in Kampala city using a questionnaire tool. Data analysis involved computation of descriptive statistics, Pearson Correlations and multiple linear regression on user behaviour of digital banking services. Hypotheses testing was conducted on Performance Expectancy (PE), Effort Expectancy (EE), Social Influence (SI), Facilitating conditions (FC), Hedonistic motivation (HM), Price Value (PV) and Behavioural Intention (BI) of Owino market traders who had bank accounts. The model testing and validation was done using a validation questionnaire. The questionnaire was presented to 150 Owino market traders and 14 information system practioners/analysts to capture responses on acceptance levels of digital banking services. Descriptive statistics of the respondents was achieved using SPSS software while model validation was done using Pearson correlation coefficient and multiple linear regressions to test the study hypothesis. The results showed that Performance Expectancy, Effort Expectancy, Hedonistic motivation and Habit had moderate positive significant effect on User acceptance of digital banking services while social influence, facilitating conditions and Behavioural intentions had weak negative insignificant effect on user acceptance of digital banking services. The study recommends that Banks should ensure full time availability of the network for all digital banking services, stakeholders in the banking sector should work hand in hand with system vendors to develop application designs that are user friendly for most customers in the informal sector given their little knowledge on the usage of these applications. In conclusion, the study notes that user acceptance of digital banking services in the informal sector is largely influenced by Performance Expectancy, Effort Expectancy, Social Influence, Facilitating conditions, Hedonistic motivation, and Behavioural Intention.