The Influence of Digital Financial Services on the Financial Inclusion by Commercial Banks in Cameroon

Authors

  • Ngwengeh Brendaline Beloke PhD in Management Sciences, Faculty of Social and Management Sciences, University of Buea, Republic of Cameroon

Keywords:

Digital Financial Services, Commercial Banks and Financial Inclusion

Abstract

Every nation needs a vibrant and strong banking system for growth and development. Banks are expected to move with time and adapt with the fast changes in technological advancement. Banks will only have to adapt to technological changes or go bankrupt. They must meet the unending needs and expectations of their customers and the society at large. Today, banks have a role in enhancing their own quota in financial inclusion (Social Performance) through the provision of digital financial services which is defined as the formal provision of banking services to the unbanked. This is a very rare area in academic literature as most studies focused on the financial performances of banks leaving out their efforts played to achieve financial inclusion an aspect of social performance to their credit. This paper sought to determine the influence of Digital Financial Services on the Performance of Commercial Banks in Cameroon. Specifically, it assesses the influence of Digital Savings Services, Digital Transfer Services, Digital
Withdrawal Services and Digital Payment Services of commercial banks on their social performance (financial inclusion). Primary data was obtained through the administration of questionnaires and the average responses of four bank staff at management levels of the headquarters of each of the 10 commercial banks under study in Cameroon were used. After testing for validity, reliability, multicollinearity and heteroskedasticity and using the Feasible Generalised Least Square (FGLS) estimation technique, the following were the findings. Results revealed that, digital transfers’ services, digital savings services, and digital withdrawals services, positively influence financial inclusion by commercial banks with only digital savings services being statistical significant. Digital payment services had a negative and insignificant influence on financial inclusion fostered by banks in Cameroon. In conclusion, digital financial services of commercial banks influence banks’ social performance. This paper therefore recommended that management of banks and policy makers in the banking industry should consider investing in robust digital financial services, so as to enhance access to their service and to contribute their own quota in ensuring the unbanked have access to formal financial services. This will have a ripple effect on the sustainable growth and development of the economy given the vital role banks play in every nation.

References

Agufa, M. (2014). The Effect of Digital Finance on financial inclusion in the Banking Industry in Kenya.

Ayuketang, N. (2018). Impact of Technology on E-Banking; Cameroon Perspectives. International Journal of Advanced Networking and Applications, 9 (6), 3645-3653.

Bahri-Domon, Y. (2018). Cameroon’s Financial Sector goes through Rapid Digitalization: Business in Cameroon.

Durai, T., & Stella, G. (2019). Digital Finance and its Impact on Financial Inclusion. Journal of Emerging Technologies and Innovative Research.

Etikan, I., Sulaiman, M,. & Alkassim, R. (2016). Comparison of Convenience Sampling and Purposive Sampling in Africa.

European Investment Bank(2016). Banking in Africa: Delivering on Financial Inclusion, Supporting Financial Stability

Heckman, E. (2015). What in the World is a VIF?

Kambale, L.(nd). Digital Financial Services. A case of Malawi

Kithinji, E. (2017). Effects of Digital Banking Strategy on Financial Inclusion among Commercial Banks.

Le Houerou, P.(2018) Digital Access

LeHouerou, P. (2018). How Technology id Delivering better access to financial services

Manyika, J., Lund, S., Singer, M., White, O., & Berry, C. (2016). Digital Finance for All: Powering Inclusive Growth in Emerging Economies

McKinsey Global Institute (2016). Digital Globalisation: The New Era of Digital flows.

Ngumi, M. (2013). Effect of Bank Innovations on Financial Performance of Commercial Banks in Kenya.

Omarini, A. (2017). Digital Transformation in Banking and the Role of Fin Techs in the New Financial Intermediation Scenario. International Journal of Finance, Economics and Trade.

Ozili, P. (2020). Theories of Financial Inclusion. Social Science Research Network Electronic Journal.

Ozili, P. (2020). Theories of Financial Inclusion. Social Science Research Network Electronic Journal.

Reyna-Torres, O. (2007). Panel Data Analysis: Fixed and Random Effects using Stata

Saab S. & Vacher J. (2007). Banking Sector Integration and Competition in CEMAC. IMF Working Paper WP/07/03. International Monetary Fund

World Bank Group Report (2019). Cameroon Digital Economy Assessment: Country Diagnosis.

World Bank Report (2014). Digital Financial Inclusion.

World Bank Report (2015). Consultative Group to Assist the Poor.

World Bank Report (2016). The Last Quarter Century: Evolution of Financial Inclusion in India

www.cameroondigital.com, October, 2021

Downloads

Published

2023-03-29

How to Cite

Beloke, N. B. (2023). The Influence of Digital Financial Services on the Financial Inclusion by Commercial Banks in Cameroon . ESI Preprints, 15, 381. Retrieved from https://esipreprints.org/index.php/esipreprints/article/view/345

Issue

Section

Preprints