THE CONTRIBUTION OF UMOJA SWITCH ATM’S IN PERFORMANCE OF COMMERCIAL BANKS IN TANZANIA: A CASE OF AKIBA COMMERCIAL BANK (ACB) DAR ES SALAAM REGION By Upendo Emanuel A Research Report Submitted to Mzumbe University, Dar es Salaam Campus College in Partial Fulfillment of the Requirements for the Award of Masters Degree of Business Administration in Corporate Management. 2013 i CERTIFICATION We the undersigned certify that we have read and here by recommend for acceptance by the Mzumbe University a dissertation thesis entitled “The Contribution of Umoja Switch ATM’s in Performance of Commercial Banks in Tanzania” A Case of Akiba Commercial Bank in partial fulfillment of the requirements for award of the degree of Master of Business Administration of Mzumbe University. ……………………………………. Major Supervisor ……………………………………….. Internal Examiner Accepted for the Board of …………………………………….. _______________________________________________________________ DEAN/DIRECTOR /FACULTYL/DIRECTORATE/ SCHOOLL/BOARD i DECLARATION AND COPYRIGHT I Upendo Emanuel, declare that this thesis is my own original work and that it has not been presented and will not be presented to any other university for a similar or any other degree award Signature………………………………………… Date……………………………………………… © This Dissertation is copyright material protected under the Berne Convention, the Copyright Act 1999 and other international and national enactments, in that behalf, on intellectual property. It may not be reproduced by any means in full or in part, except for short extracts in fair dealings, for research or private study, critical scholarly review or discourse with an acknowledgement, without the written permission of Mzumbe University, on behalf of the author ii ACKNOWLEDGEMENT This work would not have been materialized at all without the dedicated willingness of my family, friends and colleagues, who contributed in one way or the other towards this achievement. Many other influenced me over the year that left a permanent mark in these pages. Firstly, special thanks should go to my supervisor Dr. Barongo without his support, encouragement and challenges; I would not have been able to be at this stage as far as academic is concerned. Secondly, I am highly thankful to my beloved husband Ernest Mgawe who helped me to make my dream to join Mzumbe University a reality. I am so grateful to all members of my family. Thirdly, I am hereby expressing gratitude to my entire classmate whose company contributed a lot to my success. Last but not least, I am grateful to all respondents at Akiba Commercial Bank, for their cooperation and useful material they gave me on data collection. For all of these, I am forever grateful. iii DEDICATION This dissertation is dedicated to my parents Mr. and Mrs. Emanuel Mlay, who laid down the foundation of my education and whose love and devotion make my life worth living. I also dedicate it to my beloved husband Ernest Mgawe and my daughters Precious and Pauline. My special dedication goes to my friends who terribly encouraged me by providing all the moral and material incentives which enabled me to enjoy my studies all along. iv LIST OF ABBREVIATIONS ACB : Akiba Commercial Bank ATM : Automatic Teller Machine B-ISDN : Broadband Integrated Services Digital Network BOT : Bank of Tanzania ICT : Information Communication Technology IT : Information Technology ITU : International Telecommunication Union MBA : Masters of Business Administration MDGs : Millennium Development Goals SPSS : Software Package for Statistical Science UNESCO : United Nations for Education Science and Organization v ABSTRACT This study was investigating the contribution of Umoja Switch ATM’s in performance of Commercial Banks in Tanzania at Akiba Commercial Bank (ACB) in Dar es Salaam Region. Specifically, the study was determining stakeholders perception on the service provided by Umoja Switch ATM Network; identifying challenges faced by Bank Management on course of providing services through Umoja Switch ATMs; and assessing the extent to which Bank Management have managed to solve challenges faced by Bank services through Umoja Switch. Notably, on this study the researcher collected both primary and secondary data using open-ended and Closed-ended questionnaire. This study found and concluded that; most of the respondents argued that there is perception toward using Automatic Teller Machines especially for day to day transactions. ATMs offer considerable benefits to both banks and their depositors. However, most of the respondents argued that factors that affect the performance of Automatic Teller Machines to the banking operations are: many customers’ transaction and poor education of using ATMs for customers. Notably, most of the respondents argued that there is contribution of Umoja Switch ATM’s in performance of Commercial Banks i.e. bank as customers could not or would not use them, or experience difficulties in their interactions. Moreover, most of the respondents argued that stakeholders decide to adopt and use ATM without first testing it for a while. This could be because of their already perceived notions as to the advantages of using ATMs. Finally, this study recommended that; in the rapid diffusion of ICT in banking sector, bank should provide a platform to use innovative technologies to enhance operational efficiency and quality of service to attain and retain customers. vi TABLE OF CONTENTS CERTIFICATION ...................................................................................................... i DECLARATION AND COPYRIGHT ................................................................... ii ACKNOWLEDGEMENT ........................................................................................ iii DEDICATION ........................................................................................................... iv ABBREVIATIONS .................................................................................................... v TABLE OF CONTENTS .......................................................................................... vi LIST OF TABLES ................................................................................................... xii LIST OF FIGURE .................................................................................................. xiii LIST OF TABLES .................................................................................................... xi ABSTRACT ............................................................................................................... vi CHAPTER ONE ........................................................................................................ 1 INTRODUCTION AND BACKGROUND TO THE STUDY ............................... 1 1.0 Introduction ............................................................................................................ 1 1.1 Background of the Problem ................................................................................... 1 1.2 Statement of the Problem ....................................................................................... 3 1.3 Research Questions ................................................................................................ 4 1.3.1 General Question ................................................................................................. 4 1.3.2 Specific Questions ............................................................................................... 4 1.4 Research Objectives ............................................................................................... 4 1.4.1 General Objective................................................................................................ 4 1.4.2 Specific Objectives.............................................................................................. 4 1.5 Significance of the Study ....................................................................................... 4 1.6 Limitations of the Study ......................................................................................... 5 1.7 Delimitation of the Study ....................................................................................... 5 1.8 Organization of the Dissertation ............................................................................ 5 CHAPTER TWO ....................................................................................................... 7 LITERATURE REVIEW .......................................................................................... 7 vii 2.0 Introduction ............................................................................................................ 7 2.1 Theoretical Literature Review................................................................................ 7 2.1.1 The meaning of ICT in Brand Context ............................................................... 7 2.1.2 The need for ICT in an organization ................................................................... 8 2.1.3 The Umoja Switch............................................................................................... 8 2.1.4 Commercial Bank................................................................................................ 9 2.1.5.1 Indicators of Performance ................................................................................ 9 2.1.5.2 Validity Performance Indicators .................................................................... 12 2.1.6 History of the Automated Teller Machine .......................................................