Effects of Mpesa

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The EFFECt of Mobile BANKING on REVENUE COLLECTION: A Case of MOBILE MONEY TRANSFER AND NAKURU WATER and SANITATION SERVICES COMPANY (nawassco)

Samuel Kimani Kamau

A Research Proposal Submitted to Graduate School in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration (Finance), Egerton University.

EGERTON UNIVERSITY.

FEBRUARY, 2012

DECLARATION AND RECOMMENDATION
I, Samuel Kimani Kamau, hereby declare that this research proposal is my original work and has not been presented for the award of any degree in any university, college or institution of higher learning other than Egerton University for academic credit. Signature……………………………… Date……………………………….. Samuel Kimani Kamau. (CM11/0552/09)

SUPERVISORS’ APPROVAL
This research proposal has been submitted for examination with our approval as university supervisors: Mrs. Mary Bosire.
Faculty of Commerce.
Accounting and Finance Department.
Egerton University.
Signature…………………………………… Date……………………………… Ms. Irene Riungu.
A. Lecturer.
Faculty of Commerce.
Accounting and Finance Department.
Egerton University.
Signature…………………………………… Date………………………………

ABSTRACT
Mobile Banking (M-banking) refers to provision and availment of banking and financial services with the help of mobile telecommunication devices. Mobile Money Transfer (MMT), an element of M-banking, is a financial innovation that has emanated from technological progress in many countries. Developments in technology have permitted alternative functionalities for mobile handsets beyond the original communication function. Among these functions is the financial service function in terms of bill payment service that is promising a faster, more convenient, safer and cheaper means of settling utility bills. From a financial product perspective, MMT has been embraced by users and has become a more popular mode of money transfer compared to the traditional modes used by financial institutions in the past. A number of firms are encouraging their clients to settle bill payments through this financial product. However despite the simplicity of this innovation, empirical evidence detailing the impact of MMT on revenue collection is lacking. This study will adopt a longitudinal research design. The study will involve analyzing the effect of M-pesa on revenue collection for a period of two and a half years (June 2008 –December 2010). Secondary data will be collected from NAWASSCO’s offices. Data will be on the amount of bills issued and paid monthly within the stipulated period using data capture sheet. Data will be divided into two samples representing two time periods i.e. from June 2008 to May 2009 (pre-mpesa) and January 2010 to December 2010 (post-mpesa). Normality tests will be conducted on the two-sub periods using Shapiro-Wilk Test of normality found in SPSS (Statistical Package for Social Sciences). Further, a paired t-test will be conducted to test whether revenue collections in the pre-mpesa period are different from revenue collections in the mpesa period. The findings of this study are expected to inform on policy aimed at promoting the development of MMT in revenue collection.

TABLE OF CONTENTS
DECLARATION AND RECOMMENDATIONiii
ABSTRACTiv
TABLE OF CONTENTSv
LIST OF FIGURESviii
LIST OF ABBREVIATIONS1
CHAPTER ONE3
INTRODUCTION3
1.1 Background of the Study3
1.2 Problem Statement5
1.3 The purpose of the Study5
1.4 Objectives of the Study5
1.5 Hypotheses of the Study5
1.6 Scope of the Study6
1.7 Limitations of the study6
1.8 Assumptions of the study6
1.9 Significance of Study7
1.9 Operational Definitions of Terms7
CHAPTER TWO8
LITERATURE REVIEW8
2.0 Bill Payment in Kenya8
2.1 Trends in Mobile Banking in the World9
2.1.1 Mobile Financial Services in USA10
2.1.3 Mobile Banking in South Africa13
2.1.4 Luup in Europe...
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