Evolution of the branchless banking model in Uganda: evidence from Equity Bank

Abstract

This study sought to examine the drivers, barriers and strategies of branchless banking adoption in the Ugandan banking sector. The study was premised on three objectives, examining the drivers of branchless banking adoption at Equity Bank, establishing the barriers to branchless banking adoption at Equity Bank and, exploring the strategies for improved branchless banking at Equity Bank. To achieve these objectives, the study employed a descriptive research design. Data was collected using a semi-structured questionnaire from several Equity Bank customers. A total of 390 questionnaires were administered to different respondents and 261 questionnaires were completed representing a response rate of 66.9%. The collected data was edited, coded and entered for analysis using the Statistical Package for Social Sciences computer package. The research findings revealed convenience, cost-effectiveness, improved access, and user-friendly platforms are the main drivers for the adoption of branchless banking in Equity Bank. However, the study discovered that Equity Bank faces several barriers to adoption such as limited knowledge regarding the availability of services, insufficient coverage of mobile networks, lack of confidence, and inadequate literacy. To avert these challenges, the study found out that Equity Bank employs several strategies such as multichannel integration, increased investment, security innovations, expanded marketing, customer education, dispute resolution, and financial literacy. To improve the status quo, the study recommended that Equity bank should should invest in expanding the range of mobile financial services offered on the branchless banking platform to meet diverse customer needs, implement comprehensive literacy initiatives which are critical to promoting branchless banking adoption and adopt a multichannel strategy integrating traditional and electronic banking to improve flexibility.