Factors affecting customers adoption of electronic banking system in Ethiopian banking industry: the case of selected commercial banks in jimma town

Abstract

In Ethiopia, the introduction and usage of information and communication technology system is a recent phenomenon. However, in the past decade, it has rapidly expanded and today most institutions and organizations in Ethiopia have entered into the use of information and communication technology supported delivery system, especially Ethiopian Commercial Banks. E-banking system enables customers to perform banking transaction easily without visiting banking center and to receive banking service beyond the restriction of time and space. However, customer’s usage of electronic banking system remains unsatisfactory in Ethiopia due to several factors. The aim of this survey was to investigate factors that affect customers adoption of electronic banking systems in Ethiopian Commercial Banks in case of Jimma town. Self-administered questionnaires were employed to obtain the relevant data from customers of seven commercial banks selected purposively. The participants were selected using simple random sampling technique. Besides, quantitative method was used to analyze the data. Quantitative data were analyzed using a binary logistic regression using SPSS, version 21 and analyzed using statically description. The result of the study showed that key factors such as perceived risk, perceived ease of use, prior knowledge and experience, trust, and awareness of electronic banking are the major factors affecting the adoption of customers e-banking in Ethiopian commercial banking in Jimma town. Socio-demographic factors such as educational level and age were also found significantly affecting the adoption of electronic banking in Jimma town. It is thus recommended that these underlying deficiencies have to be rectified by the banks and have to work closely with potential customers in terms creating awareness over those general factors that tend to influence customers use of e-banking system