EFFECT OF ELECTRONIC BANKING ON FINANCIAL INCLUSION AMONG COMMERCIAL BANKS IN SOMALIA

Purpose: The purpose of the study was to investigate
the effect of automated teller machines and mobile
banking on financial inclusion among commercial
banks in Somalia.
Methodology: A descriptive survey design was
adopted targeting 6 commercial banks in Somalia that
had successfully rolled out electronic banking while
the respondents covered the Banks staff, like
managers and officers from each institution
respectively and census was used. Primary data was
collected on automated teller machines, mobile
banking and customer deposits with the aid of the
questionnaire. The analysis was conducted through
the Statistical Packages for Social Sciences version
24 utilizing descriptive statistics (means and standard
deviations) and inferential statistics (correlation and
regression analysis) and presented through tables.
Findings: The study found out that automated teller
machines banking and mobile banking are significant
predictors of financial inclusion among commercial
banks in Somalia. Thus, electronic banking is a
significant enabler of financial inclusion of
commercial banks.
Unique contributions to theory, practice and
Policy: The study contributes to the extension of the
views of financial intermediation theory and the
diffusion of innovation theory. The study implies that
the adoption of electronic banking as influenced by
the diffusion of innovation theory allow financial
institutions to effectively realize their financial
intermediation role in the economy. The senior
management team of commercial banks in Somalia
should allocate more resources towards financial
innovation and enhancement of the existing
electronic banking channels and infrastructures. The
policy makers at the Central Bank of Somalia need to
develop progressive regulations and rules that would
promote the adoption of financial innovation while
boosting financial inclusion