Factors Influencing Sudanese Microfinance Intention to Adopt Mobile Banking
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A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Ammar, Anwar; Ahmed, Elsadig Musa Article Factors influencing Sudanese microfinance intention to adopt mobile banking Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Ammar, Anwar; Ahmed, Elsadig Musa (2016) : Factors influencing Sudanese microfinance intention to adopt mobile banking, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 3, http://dx.doi.org/10.1080/23311975.2016.1154257 This Version is available at: http://hdl.handle.net/10419/205862 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ www.econstor.eu Ammar & Ahmed, Cogent Business & Management (2016), 3: 1154257 http://dx.doi.org/10.1080/23311975.2016.1154257 BANKING & FINANCE | RESEARCH ARTICLE Factors influencing Sudanese microfinance intention to adopt mobile banking Anwar Ammar1 and Elsadig Musa Ahmed2* Received: 13 October 2015 Abstract: Access to financial service has become a key phenomenon for economic Accepted: 10 February 2016 development and poverty alleviation .Microfinance is one way of fighting poverty Published: 16 March 2016 in Sudan, where most citizens are in need of it. However, despite the initial re- *Corresponding author: Elsadig Musa Ahmed, Faculty of Business, Multimedia sults showing a positive impact of microfinance on the livelihood of low-income University, Melaka 75450, Malaysia people in Sudan, around 8 million of the Sudanese poor people are excluded from E-mail: [email protected] microfinance services. One potential remedy for the limited outreach of microfi- Reviewing editor: nance in Sudan may lie within enhancing the capacity of microfinance services David McMillan, University of Stirling, UK providers (MFPs) in the utilization of modern technology. Recent innovation in Additional information is available at the end of the article providing financial services in a convenient and efficient way is the use of mobile banking (m-banking) technology in microfinance. M-banking promises to increase the efficiency and outreach of microfinance services in developing countries. This paper tries to examine the factors that influence the adoption of m-banking by microfinance sector in Sudan. In this respect, hypotheses were developed guided by Unified Theory of Acceptance and Use of Technology (UTAUT) and Technology- organization-Environment (TOE) models. Primary data were collected from MFPs and microfinance customers in Sudan using questionnaires and interviews. The study contributes to knowledge in terms of methods used by extending aforementioned theories through adding new variables to both models by putting both models in ABOUT THE AUTHORS PUBLIC INTEREST STATEMENT Anwar Ammar is a PhD student at Faculty of The Sudanese experience showed that Management, Multimedia University, Malaysia. microfinance—the major tool to combat His research interests are in mobile banking poverty—has a positive impact on income- technology Adoption, Implementation and generating activities, poverty reduction, women’s Effectiveness. He has 13 years of practical empowerment, and better access to education experience in ICT at International Airports Projects and health services. However, late statistics show in Saudi Arabia and 5 years in electronic banking that microfinance covers only 8% of the total technology as a manager of banking technology potential clients leaving 8 million unserved people department at the Central Bank of Sudan. behind. With baby steps, microfinance industry in Elsadig Musa Ahmed is a professor of Sudan will never get anywhere. Nonetheless, the Economics and Technology Management and enormous growth of mobile banking (M-banking) Senate member of Multimedia University, has created a new opportunity to expand Malaysia. He has published more than 100 financial services to this unserved population. Elsadig Musa Ahmed journals’ publications, produced a number of PhD Sudan’s mobile phone network covers 77% of the and other postgraduate students, completed population, including the poor. The main objective 5 external research projects and has excellent of this study is to identify the major factors international contributions in his research areas. determining the adoption of M-banking in the Sudanese microfinance sector. The findings from this research study can be used by microfinance providers to improve m-banking facilities and to identify those factors that can contribute to either the failure or success of the m-banking services and this could be further used for decision-making. © 2016 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license. Page 1 of 20 Ammar & Ahmed, Cogent Business & Management (2016), 3: 1154257 http://dx.doi.org/10.1080/23311975.2016.1154257 one study to fill the gaps in past studies; via examination of the demand (custom- ers) and supply (institutions) through modifying them to include new variables related to m-banking in microfinance. Subjects: Arts & Humanities; Social Sciences; Technology Keywords: M-banking; microfinance; Sudan; ICT; UTAUT; TOE 1. Introduction According to the National Baseline Household Survey (2009), the poverty rate in Sudan is 46.5% nationwide and varies considerably between rural and urban areas (57.6 vs. 26.5%, respectively) (Sudan 2015 African Economic Outlook, 2015). Unemployment is also high in Sudan, according to The African Development Bank (2014) the unemployment rate stood at 10.8% in 2012, with male unemployment at 13% compared to 20% for females. Sudan is one of the countries which adopted microfinance as a tool to address issues of poverty and unemployment. The Sudanese experience showed that microfinance has a positive impact on income-generating activities, poverty reduction, women’s empowerment, and better access to education and health services. However, late statistics showed that the total number of clients is 970,000, i.e. 8% coverage of the total potential clients estimated at 7.2 million (Ibrahim, 2014).This might be due to several reasons such as lack of basic public infrastructures, high operation cost, MFPs 1 deliberately ignoring the rural areas’ clients because of the high risk; microfinance programs offer only a limited number of products and limited management capacity of MFPs. It is clear that the present delivery channels are not quite meeting the challenges of microfinance in Sudan, especially when it comes to serving communities in remote locations characterized by low population density. In recent years, Mobile technology was successfully used in many countries of similar situation to Sudan (e.g. MPESA in Kenya and WIZIT in South Africa) for delivering financial services to the poor. While microfinance in Sudan is still in fledgling stage (8% coverage), mobile phone estimated penetration rate in 2015 is 77% (BuddeComm, 2015). Based on this, many studies suggest m-banking as a solution to microfinance problems (Impact Evaluation Assessment MFI Sector in Sudan 2007–2012, 2013; Mapping, capacity assessment & capacity development of micro- finance providers in Sudan, 2012; Situational Analysis of the Microfinance Sector in Sudan, 2006). M-banking has its own challenges which according to this research include the need for strong institutions and technology infrastructure (HORUS CBOS, 2011; Khattab, Balola, & Eldabi, 2012; Mapping, capacity assessment & capacity development of microfinance providers in Sudan,2012 ) an innovative business model that can reach microfinance customers with a broader range of finan- cial products at lower costs (HORUS CBOS, 2011; Impact Evaluation Assessment MFI Sector in Sudan 2007–2012, 2013); understanding the factors that influence Sudanese microfinance customer’s in- tentions to use m-banking services (Karma, Ibrahim, and Ali (2014); Tingari & Abdelrahman, 2012), partnerships, and collaboration between different stakeholders (HORUS CBOS, 2011; Khattab et al.,2012); and lack of a clear regulatory framework (HORUS CBOS, 2011; Khattab et al., 2012). In Sudan, there are certain gaps on supply side of microfinance services that is evident from out- reach statistics. The gap in the financial services market is creating a unique niche for m-banking, thus enabling a growing number of people to access to financial services for the first time. In Sudan, little research was conducted to understand m-banking