FACTORS INFLUENCING CUSTOMER PERCEPTIONS ON ADOPTION OF INTERNET BANKING IN NAMIBIA A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION OF THE UNIVERSITY OF NAMIBIA BY NAMAKAU MUYUNDA SICHONE STUDENT NUMBER - 201154544 MAY 2017 SUPERVISOR: DR. SRINIVAS MADISHETTI PROFESSOR SCHOOL OF BUSINESS MZUMBE UNIVERSITY MZUMBE TANZANIA DECLARATION “This thesis is my own original work and has not been submitted elsewhere in fulfilment of the requirements of this or any other award” Signature:………………………………………. Date:…………………………………………….. i DEDICATION I dedicate this research work to my supervisor who did all he could to guide me throughout the entire research, to my husband and family for the continuous love and support in everything, my friends for encouragements and most of all to the Almighty God who gives power, strength and health while doing the research. ii Table of Contents CHAPTER 1 .............................................................................................................................. 1 INTRODUCTION ..................................................................................................................... 1 1.1 Background ................................................................................................................ 1 1.2 Statement of the problem ........................................................................................... 4 1.3 Research objectives .................................................................................................... 6 1.4 Significance of the study ............................................................................................ 7 1.5 Limitations of the study ............................................................................................. 7 1.6 Outline of the paper ................................................................................................... 8 1.7 Conclusion ................................................................................................................. 8 CHAPTER 2 ............................................................................................................................ 10 LITERATURE REVIEW ........................................................................................................ 10 2.1 Introduction ............................................................................................................. 10 2.2 Evolution of conventional banking services ........................................................... 10 2.3 Internet banking ...................................................................................................... 13 2.3.1 Concept and types of Internet banking ........................................................... 13 2.3.2 Advantages of Internet banking ...................................................................... 17 2.3.3 Challenges of Internet banking ....................................................................... 20 2.4 Adoption of Internet banking services ................................................................... 22 2.5 Analytical framework and research model for the study ....................................... 28 2.6 Demographic attributes .......................................................................................... 33 2.7 Conclusion ............................................................................................................. 34 CHAPTER 3 ............................................................................................................................ 35 METHODOLOGY .................................................................................................................. 35 3.1 Introduction ............................................................................................................ 35 3.2 Nature of the study ................................................................................................. 35 3.3 Population .............................................................................................................. 37 3.4 Sampling ................................................................................................................ 38 iii 3.5 Data collection techniques ..................................................................................... 40 3.6 Data analysis .......................................................................................................... 42 3.7 Ethical consideration .............................................................................................. 43 CHAPTER 4 ............................................................................................................................ 44 RESULTS AND DISCUSSION .............................................................................................. 44 4.1 Introduction .............................................................................................................. 44 4.2 Demographic and descriptive statistics .................................................................... 44 4.2.1 Gender .............................................................................................................. 44 4.2.2 Age ................................................................................................................... 45 4.2.3 Qualification .................................................................................................... 46 4.2.4 Employment status ........................................................................................... 48 4.3 Perceptions on adoption of Internet banking ........................................................... 49 4.3.1 Perceived usefulness (PU) ............................................................................... 49 4.3.2 Perceived ease of use (PEU) ............................................................................ 53 4.3.3 Trust (T) ........................................................................................................... 57 4.3.4 Attitude (ATT) ................................................................................................. 61 4.3.5 Perceived behavioural control (PBC) .............................................................. 65 4.3.6 Subjective norms (SN) ..................................................................................... 68 4.3.7 Intention (INT) ................................................................................................. 71 4.4 Discussion ................................................................................................................ 74 4.5 Conclusion ............................................................................................................... 78 CHAPTER 5 ............................................................................................................................ 79 CONCLUSIONS AND RECOMMENDATIONS .................................................................. 79 5.1 Introduction .............................................................................................................. 79 5.2 Conclusions .............................................................................................................. 79 5.3 Recommendations .................................................................................................... 81 REFERENCES ........................................................................................................................ 83 APPENDICES ......................................................................................................................... 95 APPENDIX I ........................................................................................................................... 96 iv LIST OF TABLES Table 2.1 - Advantages of online banking over traditional banking practices ........................ 12 Table 2.2 - Internet banking categories and comparative features .......................................... 16 Table 2.3 - Variations in the dimensions of business model ................................................... 19 Table 2.4 - Summary of previous research on Internet banking adoption ............................... 27 Table 2.5 - Definition of model constructs .............................................................................. 32 Table 4.1 - Distribution by Gender .......................................................................................... 45 Table 4.2 - Distribution by Age ............................................................................................... 46 Table 4.3 - Distribution by Qualification ................................................................................. 47 Table 4.4 - Distribution by Employment Status ...................................................................... 48 Table 4.5 - Perceived Usefulness (PU) Results ....................................................................... 52 Table 4.6 - Perceived Ease Use (PEU) Results ........................................................................ 56 Table 4.7 - Trust (T) Results .................................................................................................... 60 Table 4.8 - Attitude (ATT) Results .......................................................................................... 65 Table 4.9 - Perceived Behaviour (PBC) Results .....................................................................