MJAMR

The Relationship Between Mobile Banking Services And Loan Performance Of Selected Microfinance Institutions In Mukono District.

Akankwatsa Annitah, Dr. Wabunna Muhammad


Abstract

This study investigated the relationship between mobile banking services and loan performance in selected Microfinance Institutions (MFIs) within Mukono District, Uganda. Against the backdrop of mobile money's proliferation and its potential to enhance financial inclusion, the research sought to empirically determine the perceived impact of these digital services on key loan performance metrics. A descriptive research design was employed, and data were collected through questionnaires from a sample of clients and staff of the selected MFIs. Descriptive statistics, including mean scores and standard deviations, were used to analyze the data. The results indicated a strong positive perception among respondents regarding the contribution of mobile banking to loan performance. The highest mean score (4.21) was associated with the statement that “Mobile transactions have increased loan repayment convenience.” Respondents also strongly agreed that mobile platforms streamlined loan applications (Mean = 4.12) and that real-time SMS alerts improved communication and monitoring (Mean = 4.06). Crucially, the analysis demonstrated that mobile banking services were perceived to have a tangible effect on reducing loan defaults and improving overall loan performance, with mean scores ranging from 3.93 to 4.14. The moderate standard deviations (0.92–1.02) suggested a general consensus on these benefits. These findings aligned with the theoretical framework of the Technology Acceptance Model (TAM) and prior empirical studies, confirming that the perceived usefulness and ease of use of mobile banking directly influenced its positive outcomes. The study confirmed that the adoption of mobile banking services was perceived to have significantly enhanced loan performance in the sampled MFIs. The integration of mobile platforms led to increased repayment convenience, improved loan monitoring, and a reduction in default rates, thereby strengthening the operational efficiency and financial sustainability of the institutions. Based on the findings, the study recommends that MFI managers and policymakers actively promote and invest in the deeper integration of mobile banking technologies into all stages of the loan cycle. Specifically, MFIs should enhance their digital infrastructure, develop user-friendly mobile application interfaces, and leverage SMS services for proactive customer engagement. Furthermore, policymakers should work towards creating a regulatory environment that fosters innovation and security in digital financial services to maximize these positive outcomes across the microfinance sector.

Keywords

Mobile Banking Loan Performance Microfinance Institutions Financial Inclusion Technology Acceptance Model Uganda Loan Repayment Digital Financial Services.
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Akankwatsa Annitah & Dr. Wabunna Muhammad (2025). The Relationship Between Mobile Banking Services And Loan Performance Of Selected Microfinance Institutions In Mukono District. Metropolitan Journal of Academic Multidisciplinary Research, 4(10). https://journals.miu.ac.ug/pages/article.php?article_id=88

More in This Issue

View full issue →
31
Teachers’ Impact And Students’ Academic Performance In Kisoro District: A Case Study Of Muhanga Secondary School
Niyonzima Tadeo1 , Byaruhanga Benard2
Teacher Impact Academic Performance Teacher Qualifications Teacher Experience
32
Technology And School Drop Out In Rukungiri District: A Case Study Of St. Jude Secondary School
Muhereza Melvin1 , Dr Sekiswa Peter2
Technology School Dropout Rukungiri District Descriptive Design
33
The Effects Of The East Africa Crude Oil Pipeline On The Economic Growth Of Uganda. A Case Study Of Kampala District.
Ayebare Doreen Ashley1 , Kalikola Jacob2
East Africa Crude Oil Pipeline Economic Growth Uganda Environmental Sustainability
34
The Impact Of Growth Mindset Interventions On Academic Performance Of Low-Achieving Students at Kampala International University
Kanyesigye Gracious1 , Ojok Alex2
Growth Mindset Academic Performance Low-Achieving Students Intervention
35
The Relationship Between Management Information Systems (MIS) And Loan Performance Of Selected Microfinance Institutions In Mukono District.
Zikusooka Enock1 , Nuwamanya Isaac2
Management Information Systems Loan Performance Microfinance Institutions Portfolio-atRisk