1. FACTORS AFFECTING THE ADOPTION AND USAGE OF ELECTRONIC
BANKING SERVICES: A CASE OF COMMERCIAL BANK OF ETHIOPIA TOSSA
BRANCH CUSTOMERS
M.Sc. Thesis presentation
By
Natnael Alamrew
Supervised by:
Hassen Beshir (Ph.D)
July, 2020
Dessie, Ethiopia
3. • The Banking industry in Ethiopia plays a significant role in the country’s economy.
Through borrowing, lending and related activities, banks facilitate the process of
production, distribution, exchange and consumption of wealth (Ayana, 2014)
• Banks also administer payment systems which are core to an economy. Competition
and limitation of resources has placed banks under pressure to lower their transactional
cost and improve their services and maintain quality of service.
• All banks in Ethiopia are too late to move with technological advancement and they
should clearly chart out the time schedule for their integration and technological
advancement (Ayana, 2014)
Statement of the problem
July, 2020
4. • E-banking practice of Commercial bank of Ethiopia are facing challenges such as
customer preference of the E-banking service, convenience of clients to utilize or
customers willingness to use electronic banking and adopt E-banking facilities are
low (Commercial Bank of Ethiopia annual report 2018).
• Moreover, despite the importance of E-banking service adoptions, limited studies are
currently available in Ethiopia banks.
• Although there are many research works conducted worldwide, there are very few or
limited published works that tried to investigate the factors affecting the adoption of
E- banking by customers in Ethiopia.
• So it should be studied to have broad understanding of the factors affecting the
adoption of E- banking products Ethiopia context.
Statement of the problem …
July, 2020
5. • In addition many of the researches conducted did not consider organization and income
of the customers as a factor and in countries like Ethiopia; people are greatly influenced
by organization, socio-economic and culture of the adoption and usage of e-banking
services (Gardachew, 2018).
• So the researcher assessed the influence of organization and socio-economic of the
customers on the intention of customers to adopt E- banking services.
• Due to this fact, the researcher is initiated to conduct a study to fill the gap that focuses
on the major determinants affecting adoption of E-banking service in Commercial bank
of Ethiopia customers.
Statement of the problem …
July, 2020
6. • The main aim of this study is to identify the factors which influence the adoption and usage of
E-banking services in Commercial bank of Ethiopia especially in Tossa branch customers
• Specifically:
To identify the technological factors affecting the adoption of electronic banking services.
To explore organizational factor influences in adoption and usage of E-banking.
To assess how perceived usefulness and easy to use affecting adoption and usage of E-
banking.
To examine the socio-economic and cultural profiles of adoption and usage of E-banking.
Objectives
July, 2020
7. • In this study cross-sectional research design was employed.
• Quantitative and explanatory research method was also used.
• The target population of the study were being the total number of customers of
Commercial Banks of Ethiopia in Tossa branch in June, 2018.
• Since the researcher was interested in the concept of intention the respondents are
both users & non-users of E- banking and just one time users (not continual
users).
Research design and target population
July, 2020
8. • The study applied simple random sampling techniques.
• The total customers of Commercial bank of Ethiopia Tossa branch as of June 30, 2018
performance report was 24,840 and the sample size is determined based on the
following simplified formula proposed by Yamane’ (1967) formula to calculate sample
Size.
n = 24,840
= 1+24,840(0.05)2
= 394 respondents
• From the total respondents, 310 of them were non users and 84 respondents were users
of e-banking services.
sample size determination
9. Sampling techniques and sample size determination
• By using the sample size determined above, the researcher is used
proportionate stratified sampling criteria (Birchalleyill, 2004) to
distribute the sample size.
• Table 1. sample distribution
population Sample size Percentage %
Non adoption
& users 19,640
310 79
Adoption
and users 5,200
84 21
Total 24,840 394 100
10. • For this study both primary and secondary data were used;
o The primary data was gathered from Commercial bank of Ethiopia customers to
obtain information which provide answers to the research questions.
o The secondary data were collected from Commercial bank of Ethiopia documents
like report and websites.
Type and source of data
July, 2020
11. • Both descriptive and econometric analysis were used to analyze the collected data.
• The study used econometrics model to identify the relationship between
determinants of adoption of e-banking status as dependent variable with
various independent variables.
• Hence, the Binary logistic regression analysis was applied to identify
significant determinants of factor affection adoption and usage of e-banking
services.
Method of data analysis
July, 2020
12. Variables…
Table 2. Description of variables used in the model and
Variables used Explanation Category Expected signs
Dependent variable
Adoption and
Usage of e-bank
Adoption and usage of Electronic
banking
Continuous
Independent variables
Age Age of the respondent Continuous +
Sex Sex of the respondent Dummy +
Education Educational category of the respondent Categorical +
Income Income of the respondent Continuous +
Techno Technological Factor Dummy -
Ease Perceived ease to use Dummy +
Organization Organizational factor Dummy +
usefulness Perceived usefulness Dummy +
occupation Occupational status of the Respondent Categorical +
martial Martial status of respondent Dummy +
13. Descriptive Statistics and logistic regression
Descriptive analyses were used to present the data in to a summary
format by tabulation the data arranged in a table format.
This section is mainly concerned with the descriptive part which was
mainly focused on the description of demographic, socioeconomic as
well as institutional characteristics of the respondents as it would
help to frame the econometric analysis.
Frequency and percentage was also presented.
18. • The study from an odds ratio in the logistic regression founded that the probability to
adoption and usage of e-banking was positively related and statistically determined by
age, gender, marital status of the customer, education level, easy to use or awareness,
technology, organization and their occupational statuses.
• On the other hand, it was negatively related with technology/perceived risk; that means as
the customer’s confidence decreased it is more chances to adopt and use of e-banking
services.
• Most of the respondents are male (55%) which shows that men are more participants than
women (45%). Most of respondents have high literacy levels and works in the
government organization, and their income level of respondents are between Birr 5000-
10000 per month.
• Organizational factors, perceived usefulness, and perceived risk have a positive
relationship with Adoption and utilization of E-banking Service in agreement with the
hypothesis.
Conclusions
July, 2020
19. Based on the findings of this study the following recommendations can be drawn;
• For successful implementation of E-banking system in commercial bank of Ethiopia Tossa
Branch, the government support is needed in providing technology infrastructure, for ICT
development and setting the necessary awareness and training.
• Management of commercial bank of Ethiopia Tossa Branch bank should own the issue of
modernizing their services through E-banking and give continuous, strong and proactive
support.
• To exploit the benefit of E-banking system, commercial bank of Ethiopia Tossa Branch needs
to familiarize their customers with the processes and benefits of the system.
Recommendations
20. • Commercial bank of Ethiopia Tossa Branch should pay special attention to deliver service
to customers by using E- banking system, which can easily be accessible.
• It may concern organization should be deliver e-banking services to customer in the
appropriate way and aware the customer about e-banking function and way of using.
Recommendations…
July, 2020
