May , 2017

DEPARTMENT OF ACCOUNTING AND FINANCE

FACTORS AFFECTING ADOPTION OF MOBILE MONEY IN ZIMBABWE

(BULAWAYO)

BY

AGATHA R. CHANGAU

LO131547R

A DISSERTARTION SUBMITTED TO LUPANE STATE UNIVERSITY IN

PARTIAL FULFILMENT OF THE B.COM IN ECONOMICS HONOURS
AGATHA R. CHANGAU

L0131547R

Factors affecting adoption of mobile money in Bulawayo (Zimbabwe)

Supervised by: N. MUGUMISI

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FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTING AND FINANCE

RELEASE FORM

NAME OF AUTHOR: AGATHA R CHANGAU

TITLE OF DISSERTATION: FACTORS AFFECTING ADOPTION OF MOBILE

MONEY IN ZIMBABWE (BULAWAYO)

DEGREE PROGRAMME: B.COM (HONS) IN ECONOMICS

DISSERTATION SUPERVISOR: MR N. MUGUMISI

YEAR OF AWARD: 2017

Permission is hereby granted to Lupane State University library to produce single

copies of this dissertation and to lend or to sell such copies for scholarly or scientific
research only. The author reserves other publication rights; neither the dissertation nor
extensive extracts from it may be printed or otherwise reproduced without the author’s
written permission.

SIGNED:……………………………… DATE:…………………………

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APPROVAL FORM
This serves to confirm that the undersigned has read and recommended to Lupane State
University for acceptance of a dissertation entitled,

“FACTORS AFFECTING ADOPTION OF MOBILE MONEY IN ZIMBABWE

(BULAWAYO)’’

Submitted by Agatha R. Changau in partial fulfillment of the requirements of the

Bachelor of Commerce (Hons) Degree in economics

SUPERVISOR: ………………………… DATE………/05/2017 (Signature)

CHAIRPERSON: ……………………….. DATE………/05/2017

(Signature)

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 Dedication
I dedicate this dissertation to the Lord Almighty God, my lovely sister Priscilla and my
late mother Mary Zulu.

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Acknowledgements
Firstly I would like to express my sincere gratitude to my supervisor, Mr N Mugumisi whose
guidance and support steered my study into the right direction. Secondly I would like to
acknowledge Dr. Conrad Murendo and Mr N. Mpofu whose recondite knowledge and
instructing skills in stata helped me to understand and analyse my data and come up with
meaningful results.

Secondly, I would like to extend my gratitude to my loving sister Portia “popo” and my
friend Rose “papa”, who were there for me, gave me encouragement as well as support
during difficult times at University

Our Father in heaven deserves all the praise for creating friendly people around me and for
granting me the exquisite life as well as the intellect to push me throughout the study.
“Hallowed be his name”.

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Abstract
This study set out to investigate factors affecting the adoption of mobile money services in
Bulawayo (Zimbabwe) in the light of demographic variables that is, age of individuals,
income, education level, bank account and from mobile money service adoption literature. To
do this, a questionnaire with both close and opened ended questions was administered to a
total of 150 respondents from a targeted sample of 200 Bulawayo residents.

To ensure diversity in terms of demographic characteristics, purposive sampling method was

done .The analysis of the results revealed that trust in mobile money, age of individuals,
education, savings club, bank account and time to the shops did seem to be significant in
determining whether an individual used mobile money services or not. However, income and
gender appeared to be insignificant in determining the use of mobile money services in
Bulawayo. In this regard the responsibility falls on both the service providers and the
government to ensure that customers are satisfied. Increasing mobile money and mobile
banking adoption rates has been dabbed as one of the possible solutions that can anchor
Zimbabwe’s economy as it is faced with an evident cash crisis.

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Contents

RELEASE FORM...............................................................................................................................ii
APPROVAL FORM..........................................................................................................................iii
Dedication.....................................................................................................................................iv
Acknowledgements........................................................................................................................v
Abstract.........................................................................................................................................vi
CHAPTER I......................................................................................................................................1
1.0 Background...........................................................................................................................1
1.1 Introduction..........................................................................................................................2
1.2 Problem Statement...............................................................................................................4
1.3 Objectives.............................................................................................................................5
1.3.1 Research Questions........................................................................................................5
1.4 Hypothesis of the study........................................................................................................6
1.5 Rationale or purpose of the study.........................................................................................6
1.5.1 Significance of the study................................................................................................6-
1.5.2To the Researcher...........................................................................................................6
1.5.3 To the mobile money service providers..........................................................................6
1.6Limitations of the study.........................................................................................................7
1.7Assumptions..........................................................................................................................7
1.8Definition of terms.................................................................................................................7
1.9Scope of the study.................................................................................................................8
1.9.1 Chapter summary...........................................................................................................8
CHAPTER II.....................................................................................................................................9
2.0 Literature Review..................................................................................................................9
2.1Introduction...........................................................................................................................9
2.2Overview of Mobile Money Services......................................................................................9
2.2.1 Overview of mobile money in Zimbabwe.......................................................................10

2.3 Mobile Penetration in Zimbabwe........................................................................................12

2.3.1 Mobile Money Transfer Services....................................................................................13

2.4Theoretical Literature Review..............................................................................................15

2.4.1 The Innovation Diffusion Theory....................................................................................15

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 2.4.2 Theory of Reasoned Action (TRA)..................................................................................16

2.4.3 Theory of Planned Behaviour (TPB)...............................................................................17

2.4.5 Technology Acceptance Model......................................................................................17

2.4.6 Information Diffusion theory.........................................................................................18

2.4.7 Extended Technology Acceptance Model (TAM 2).........................................................18

2.5Empirical Literature Review.................................................................................................18

2.6Chapter summary................................................................................................................23
CHAPTER III..................................................................................................................................23
3.0 Research Methodology........................................................................................................23

3.1 Research Design...................................................................................................................24

3.2 Population and Sampling Procedures...................................................................................24

3.3. Sampling techniques..........................................................................................................25

3.3.1 Sample and sample size.................................................................................................25

3.3.2 Sampling procedure......................................................................................................25

3.3.3 Data collection methods................................................................................................25

3.4 Data analysis and presentation............................................................................................26

3.5 Probit Model........................................................................................................................26

3.5.1 Conceptual Framework.................................................................................................26

3.6 Model Estimation.................................................................................................................28

3.6.1 Maximum likelihood Estimation....................................................................................28

3.6.2 Model Evaluation..........................................................................................................28

3.7 Definition of variables..........................................................................................................29

3.7.1 Residence......................................................................................................................29

3.7.2 Trust in mobile money...................................................................................................29

3.7.3 Financial literacy...........................................................................................................29

3.7.4 Demographics...............................................................................................................29

3.7.5 Education.....................................................................................................................30

3.7.6 Income..........................................................................................................................30

3.7.7 Age................................................................................................................................30

3.7.8 Gender..........................................................................................................................31

3.7.9 Bank account – Savings account....................................................................................31

3.8 Chapter summary................................................................................................................31

CHAPTER IV..................................................................................................................................33

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4.0 Data findings, analysis and discussions..............................................................................33
4.1Descriptive Statistics............................................................................................................33
4.1.1 Gender of Respondents.................................................................................................33

4.2 Age of Respondents............................................................................................................34

4.3Level of Education................................................................................................................34
4.4Level of income....................................................................................................................34
4.5T-Test...................................................................................................................................34
4.7 Discussion of results.............................................................................................................37

4.8 Chapter summary................................................................................................................38

CHAPTER V...................................................................................................................................40
5.0 Introduction........................................................................................................................40
5.1 Summary............................................................................................................................40
5.2 Policy recommendations.....................................................................................................41
5.3To the service providers.......................................................................................................41
5.3.1 Trust..............................................................................................................................41

5.3.2 Educational programmes...............................................................................................41

5.3.3 Convenience..................................................................................................................42

5.4Further Research..................................................................................................................42
5.5Chapter summary................................................................................................................42
LIST OF TABLES

Table 1: Mobile Money Deployments in Zimbabwe...........................................................12

Table 2: Level of income........................................................................................................34
Table 3: Showing t-test results..............................................................................................34
Table 4: Probit regression results......................................................................................... 35

LIST OF FIGURES

Figure 1: Gender of Respondents............................................................................................33

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 CHAPTER I
1.0 Background
The worldwide use of mobile phones has proliferated since the turn of the millennium and
they are professed to be devices that serve the individual that owns it, they are also
recognized as a social artefact. The ubiquity and convenience of the mobile phones has
brought about new value and immeasurable opportunities in the delivery of financial services
in Zimbabwe. For business enterprises, the opportunities include reaching vast numbers of
new customers particularly the rural unbanked population and providing better services to
existing financial service consumers. For customers, the opportunities include increased
affordability, service convenience, flexibility and security. Furthermore, the mobile phone
may even open access to financial services for many who are currently excluded from the
market altogether – the majority of the population in many developing countries.

Prospects are undeniably high that mobile money transfer services will open up financial
sector services to millions of unbanked Zimbabweans, particularly in the rural areas since
they only need mobile phones to access a certain range of essential financial services which
they had no access to. However, the economic meltdown which prevailed in Zimbabwe over
the past decade contributed enormously to the failure by telecommunications industry and
traditional banking institutions to adopt mobile money transfer platforms in spite of their
power to cover a broad spectrum of customers (Murambwa et al 2013)

However, according to Murambwa et al (2013) in East Africa, Kenya in particular, mobile

money transfer services have had a transformative effect especially to the unbanked low-
income earners, who had been traditionally ignored by commercial banks. M-Pesa, an MMT
(mobile money transfer) platform is regarded as a mobile money success story, and only time
will tell whether the same will pick up in similar fashion in Zimbabwe. Hence the main
objective of this study was to analyse the factors that affect consumers’ adoption of mobile
money transfer services in Bulawayo, Zimbabwe.

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1.1 Introduction
The mobile telecommunications services sector in Zimbabwe has immensely grown over the
years with the telecommunications operators defying all logic and sense in a bid to create and
sustain a competitive edge. The need for differentiated market offerings became vital with
basic services relatively identical, this has facilitated the launch of mobile money transfer
services. Along with global trends, innovation has become a buzzword and epitomizes
modern day enterprises such that survival in today’s turbulent environment is somewhat
hugely dependant on continuous product innovation and improvement.

In light of this, there has been an infiltration of new mobile technology products by mobile
telecommunications operators in Zimbabwe, that is, Econet Wireless Zimbabwe’s Ecocash
product, Netone’s One Wallet product and Telecel Zimbabwe’s Skhwama mobile money
transfer platform. Questions are however raised concerning the consumers’ adoption of these
services and the determinant factors influencing their acceptance and usage.

“Mobile phones affect the lives of billions of people around the globe, including the poor. The
changing mobile technology has revealed opportunities and allowed nearly three billion
people without bank accounts to access financial services’’, (Mago 2014).Financial
institutions have been motivated in various by the unbanked population who lack financial
services to promote mobile banking . Mobile banking can reach the previously ‘unbanked’
low income earners and the unemployed as long as they have access to a cell phone. Karlan et
al (2009) states that revolutions in microfinance have taken centre stage in efforts to expand
financial access over the last two decades, attention is now shifting to opportunities to reform
formal banking systems to open up savings, loan and insurance products to the financially
excluded. The significance of mobile banking in this regard is that it brings financial services
to the previously ‘unbanked’ areas hence financial inclusion. According to Ismail et al (2011),
despite the obvious potential benefits of mobile money and mobile banking, questions remain
about whether low-income customers will adopt the relatively new technology at a scale
sufficient to make it worth offering.

Chinakidzwa et al (2015) state that, ‘’the ubiquitous and location sensitive nature of
telecommunication products like mobile phones, have made mobile services possible’’.
Mobile commerce and mobile business now tend to be the order of the day. The face of
banking is changing especially in Africa as it is being influenced by mobile banking. Tiwari
et al (2007)

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states mobile banking is the provision and availing of banking services with the help of
mobile telecommunication devices.

Through aligning banking business strategy, process and infrastructure with information and
communication technology (ICT) strategy, mobile processes and infrastructure coupled with
smart handsets capable of providing various functionalities has made mobile banking a
success and motivated customer tastes and preferences to be on the move( Kufandirimbwa et
al 2013). This has seen the emergence of mobile money in Africa, which was first launched
in Kenya in 2007 and is spreading throughout African countries.

Tobin et al (2012) defined mobile money as the delivery or provision of financial services
through mobile device. This definition encompasses a range of services, including payments
(such as peer-to-peer transfers), finance (such as insurance products), and banking (such as
account balance inquiries). According to Donovan (2012) this can also be referred to as
mobile banking, mobile cash and e-wallet. Mobile money is a facet of mobile banking.
Mobile banking also known as M-banking basically allows a user to operate a bank account
using one's mobile phone, however mobile money also allows users to do similar transactions
with a mobile phone but in this case, the focus is basically on making mobile payments from
an account that doesn't have to be a normal bank account. In the case of mobile money, a
mobile phone is linked to a cash pool that has been pre-funded and then would be able to
make payments for goods and services similar to what m-banking offered but without
necessarily accessing full banking service.

This new phenomenon known as mobile money (m- money) has been defined by various
authors and institutes. The United Nations Conference on trade and development (UNCTAD)
in 2012 defined mobile money loosely as “money stored using the SIM (subscriber identity
module) in a mobile phone as an identifier as opposed to an account number in a
conventional banking”.

Must et al (2010) further added that subscribers add value to their mobile accounts and store
it for future use (money transfer or payment for goods and services). Deductions from value
stored on the SIM, linked to the equivalent real cash value safely held elsewhere, normally in
a bank are facilitated by a mobile phone. Jenkins (2008) further explains that mobile money
is accessed and used via mobile phones, highlighting that mobile subscribers in African
markets are beginning to use mobile money for a variety of transactions and services
domestically and internationally.

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Donovan (2012) further stated that “in addition to extending financial services to the poor,
mobile money is expected to improve productivity by increasing the efficiency and lowering
the cost of transactions, improving security, generating new employment opportunities, and
creating a platform on which other businesses can grow”. Zhou (2011) highlights that
because of ubiquitous payment provided by mobile money it has managed to free subscribers
from spatial and temporal limitations, thus providing them greater convenience.

Mobile money which is simply the ability for cell phone users to transfer money from one
subscriber to another as well as withdrawing cash from appointed mobile money agents, has
greatly helped Zimbabwean people whose country is facing liquidity challenges through
facilitating transactions in the financial sector without the need for bank account and queues.
Just owning a cell phone now transforms one’s life into this new financial circuit/network.

According to the RBZ, in 2015, monetary transactions totalled $57 billion and mobile money
payments accounted for 87.9% of these transactions in terms of volume. As with previous
monetary policy statements that have come in the wake of mobile money adoption,
Zimbabwean monetary exchange has been skewed towards mobile financial alternatives.
Therefore this study intends to look at the factors affecting adoption of mobile money in
Bulawayo.

1.2 Problem Statement

Mobile payments have become a major economic driver in Africa since 2007, with M-Pesa
being the pioneer. What began as a value-added service for users has become the means by
which they participate in and grow their economy.

A study carried out by Kufandirimbwa et al (2013) shows that Zimbabwe’s ratio of mobile
money subscription to mobile subscription is 18.18 percent showing a faster penetration rate.
The higher rate of penetration is due to unbanked population of 70 percent which is
conducive for the proliferation of mobile money as noted by the popularity of mobile money
products in Zimbabwe.

According to Tobbin (2012), there is a shortage of research that properly conceptualise why
the unbanked and the poor adopt mobile banking. Existing research has used information
technology adoption theories such as technology acceptance model (TAM) (Nasri and
Charffedine 2012; Kesharwani and Bisht 2012; Zhou 2011; Kim et al., 2010; Schierz et al.,

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2010), innovation diffusion theory (IDT) (Mallat, 2007), and the unified theory of acceptance
and use of technology (UTAUT) (Luo et al., 2010) to examine mobile banking user
behaviour.

However, according to critics such as Biljon et al (2007) these models do not incorporate
qualitative factors such as different world views and technological frame of reference.
Bagozzi (2007) criticize TAM for having a deterministic cause-effect approach and for
neglecting group, social and cultural aspects of decision making.

In Zimbabwe research on new technology adoption had also heavily relied on TAM either by
testing or extending it. Studies such as those done by Chinakidzwa, 2014; Thulani et al, 2009;
Dube et al, 2009 and Nyamuhwa (2014). These researches do not clearly contextualise
reasons for adoption of such technologies by the poor.

However researchers such as Zhou (2011) found perceived usefulness, relative advantage,
trust, performance expectancy and gender; Hernan et al (2010) to affect user adoption of
mobile money and mobile banking among other factors. In view of critics by Baggozi and
Biljon,(2007) this study intends to use an exploratory approach without any preconceived
determinant factors of mobile money usage by the Bulawayo population in Zimbabwe.

Most recent studies done in Zimbabwe above are mostly concentrated in the Mashonaland
areas or Zimbabwe as a whole. This has created a research gap as such a study has not
extended to Bulawayo, also taking into account that Bulawayo is the second largest city in
Zimbabwe.

1.3 Objectives
1) To identify the socio demographic factors that affect adoption of mobile money.
2) To identify the institutional factors that affect adoption of mobile money.
3) To provide policy recommendations for improving mobile money adoption in
Bulawayo.

1.3.1 Research Questions

1) What are the socio demographic factors that affect mobile money adoption?
2) What are the institutional factors that affect adoption of mobile money?
3) What policies can be used for improving mobile money adoption in Bulawayo?

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1.4 Hypothesis of the study
H0: There is a positive relationship between mobile money and socio- demographic factors

H1: There is no positive relationship between mobile money and socio- demographic factors

1.5 Rationale or purpose of the study

1.5.1 Significance of the study
Zimbabwe as a country has been going through a liquidity/cash crisis which clearly became
evident in 2015 towards year end. According to Mashakada (2016), there is a difference
between the two terms that is liquidity crisis and cash crisis. He defines liquidity crisis as a
situation where an institution (a business or the economy as a whole) faces a crunch of liquid
funds, a situation of lack of liquid funds (cash and cash equivalents). As for an economy, if
banks either reduce the amount of credit or give no credit at all, liquidity crisis may arise.
Liquidity crisis is usually associated with high interest rates. He further defines cash crisis as
a situation where the quantity of broad money supply (M3), is short in circulation. In this
situation there are cash shortages, there are more leakages than injections into the banking
system. One of the many remedies for these two situations is to move from cash orientated
economy to non-cash based one. This can be facilitated through the use of plastic money and
digital money. Mobile money is one of the many facets of digital money hence this study is
important as it will address one of the remedies to liquidity/cash crisis.

1.5.2To the Researcher

The research was carried out in partial fulfilment of the requirements of Bachelor of Business
Honours Degree in Economics at Lupane State University. It helps to equip the researcher
with valuable insight and understanding on how consumers behave and the key factors that
can help to attract them. The researcher will also benefit from the increased knowledge which
can be used for academic studies and other further studies as literature review.

1.5.3 To the mobile money service providers

This study is a comprehensive description which highlights the factors that affect consumer’s
use of mobile money services. A clear understanding of these factors will enable mobile
money service providers to develop suitable marketing strategies, business models, processes,
awareness programs and pilot projects that would increase the utilization of mobile money
services by consumers.

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1.6 Limitations of the study
The absence of published baseline research data on the adoption of mobile banking and
mobile money services for financial and banking services in Bulawayo means that no
comparisons can be made.

1.7 Assumptions
The researcher assumed that the participants will answer all the questions honestly that were
asked during the survey. The researcher also assumes that the inclusion criteria of the sample
are appropriate and therefore, assures that the participants have all experienced the same or
similar phenomenon of the study.

The researcher also assumes participants have a sincere interest in participating in the
research and do not any other motives, such as getting either monetary or non-monetary
incentives. All participants are considered to be rationale economic agents.

1.8 Definition of terms

 Mobile money: is an electronic wallet service, available in many countries, that lets
users store, send and receive money using their mobile phone. Instead of paying with
cash, cheque (or check), or credit cards, a consumer can use a mobile phone to pay for
a wide range of services and digital or hard goods. Although the concept of using non-
coin-based currency systems has a long history, it is only recently that the technology
to support such systems has become widely available. The definition of “mobile
money” varies across the industry as it covers a wide scope of overlapping
applications. It is also referred to as mobile financial services, mobile wallet and
mobile payment. In developing countries mobile payment solutions have been
deployed as a means of extending financial services to the community known as the
"unbanked" or "under banked," population.
 Financial inclusion- Financial Inclusion is the process of ensuring access to
appropriate financial products and Services needed by all sections of the society in
general and vulnerable groups such as weaker Sections and low income groups in
particular at an affordable cost in a fair and transparent manner by mainstream
institutional players.

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  Financial innovation- Financial innovation can be defined as the act of creating and
then popularising new financial instruments as well as new financial technologies,
institutions and markets. It includes institutional, product and process innovation.
Institutional innovations can affect the financial sector as a whole, relate to changes in
business structures, to the establishment of new types of financial intermediaries, or to
changes in the legal and supervisory framework. Important examples include the use
of the group mechanism to retail financial services, formalizing informal finance
systems, reducing the access barriers for women, or setting up a completely new
service structure. Process innovations cover the introduction of new business
processes leading to increased efficiency, market expansion, for example office
automation and use of computers with accounting and client data management
software. Product innovations include the introduction of new credit, deposit,
insurance, leasing, hire purchase, and other financial products. Product innovations
are introduced to respond better to changes in market demand or to improve the
efficiency of the already existing products.
1.9 Scope of the study
The study focuses mobile money adoption in Zimbabwe, paying close attention to Bulawayo.
The study will be done over a period of one semester looking at the level of awareness and
rate of mobile money adoption. A sample size of 200 respondents will be used due to lack of
man power and time constraint.

1.9.1 Chapter summary

This chapter looked at the introduction, background, problem statement and objectives of the
study. It also looked at the research questions, hypotheses, rationale of the study and
assumptions. The limitations of the study, assumptions, definitions and scope are also
highlighted above.

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 CHAPTER II

2.0 Literature
Review
2.1Introduction
This chapter reviews the relevant literature on mobile money, mobile money penetration,
demand of mobile money, mobile money transfer service, impact of mobile money,
underutilisation of mobile money services financial literacy and financial inclusion.

Mobile financial services are among the most promising mobile operations in the developing
world. Mobile money services could become a general platform that transform s entire
economies, as it is adopted across commerce, health care, agriculture, and other sectors
(Donovan, 2012). Barnes et al (2003) suggest that recent innovations in telecommunications
have enabled the launch of new access methods for banking services.

One of these is mobile money services whereby a customer interacts with a bank via a mobile
device such as a mobile phone or personal digital assistant. Mobile money services are
especially useful in developing countries. Some countries like Kenya and South Africa, just
to name a few, are very successful in the use of mobile money services. Jack et al (2010)
states that these services give users many of whom are poor and have no access to banks a
way to save small amounts of money .

2.2 Overview of Mobile Money Services

The introduction of mobile money has come with many beneficial aptitudes. The informal
system of money transfer such as individuals carrying money or sending drivers and
conductors is inclined to highway robbery and theft (Kim et al 2010). Sander (2003) also
notes that money sent through friends and relatives is sometimes misused and at times does
not reach its destination while money sent via letters and parcels by courier companies may
be stolen and is expensive. Kauffman et al (2008) highlighted challenges associated with the
formal and semi- formal systems which include delays and long queues, network limitations,
insolvency of branches, unreliable communication and misdirected.

However, the situation has changed dramatically in the past few years with the introduction
of mobile phone-based money transfer services. The overview of prepaid cards of low

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denominations and the falling prices of mobile handsets have resulted in a rapid spread of
mobile phones in developing countries (International Telecommunications Union, 2010).

The real potential of mobile money services is to make basic financial services available to
the financially excluded. The mobile phone became the first communications technology to
have more users in developing countries than in developed ones. More than 800 million
mobile phones were sold in developing countries in the past three years (GSM Association,
2006). As mobile phone usage expands, so is financial inclusion. Low-income earning
people no longer need to use scarce time and financial resources to travel to distant bank
branches because of mobile banking. Mas et al (2010) argues that in developing countries
mobile operators have developed a usage-based revenue model, unlike banks selling prepaid
airtime to poor customers in small augmentations, such that each transaction is profitable on a
stand-alone basis. Mobile money services are already reaching the unbanked poor in
countries like South Africa, Kenya and Botswana just to name a few.

A survey conducted by FinMark Trust (2011) showed that one third of the world’s population
who did not have bank accounts own or have at least access to a mobile phone. Cobert et al
(2012) state that more than a billion people in emerging and developing markets have cell
phones but no bank accounts. The unbanked population which comprise mostly of low
income earners store and transfer money using informal networks but these have high
transaction costs and are prone to theft. Mobile money is beginning to fill this gap by offering
financial services over mobile phones from simple person-to-person transfers to more
complex banking services. Kendall et al (2012) note that one of the significant advantages
of mobile technology is that it can extend access to banking services for those who do not
live in close proximity to brick and mortar bank branches. Mobile money services have
brought competition and efficiency to the banking and financial services in sub-Saharan
African countries.

2.2.1 Overview of mobile money in Zimbabwe

Mobile money arrival in Zimbabwe triggered a lot of activity as telecommunication and
banking institutions scramble for their share of the mobile financial products. Table 1 shows
some of these products in Zimbabwe. Mobile money transfer (MMT) which emerged as a
subscriber to subscriber airtime transfer, is still being used by lower income groups for barter
trading with other products, was later used as proxy cash , and has seen light in Zimbabwe.
Merritt (2012) states that remittances are being dominated by wireless carriers showing a

1
steady shift from traditional providers, basing his argument on the basis of technological
ubiquity and the lower cost nature of mobile money transfer services

In Zimbabwe, Econet‟s EcoCash with an agent network of over 1000, provides a cell phone
to cell phone quick, easy and secure money transfer. Net One which is a Zimbabwean state-
owned mobile network operator has also appropriate infrastructures and processes must be in
place and be well aligned for mobile money to take root, thrive and go to scale. This network
constitutes a mobile money ecosystem which is a community supported by a foundation
of interacting organizations and individuals to achieve a certain goal. Participants and
stakeholders in the mobile money ecosystem include mobile network operators, equipment
manufacturers, regulators, banks, airtime sales agents, retailers, utility companies,
employers, other institutions, and users.

According to Mas et al (2010), 75% of the population in sub-Saharan Africa do not have
access to any form of formal financial services. In Zimbabwe, 70% of the country’s
population live in the rural areas and only 11.7% of the branch network serve them (Reserve
Bank of Zimbabwe, 2007 and World Bank, 2012). Implications of these statistics show that
people from the rural communities still travel long distances to the nearest bank to get
financial services, baring or exhausting their very limited disposable income.

Comparing Zimbabwe with other regional banking levels such as South Africa 63%,
Namibia 62%, Swaziland 44% and Zimbabwe 24%, the level of banking is low in the country
(FinMark Trust, 2011). The 76% unbanked population is too significant to ignore. Therefore,
it is important that these consumers are included in the official economy versus the black
market economy and this is only possible through modern forms of monetary technology.

Projections have been made that mobile banking will provide access to finance and market
opportunities for the previously disadvantaged communities consequently leading poverty
reduction (Dolan, 2009; Kasseeah & Tandrayen-Ragoobur, 2012; International Finance
Corporation, 2011). Zimbabwean banks and mobile network operators have made efforts to
exploit the need by launching different kinds of mobile money services. Some of the products
and services that have been launched are shown in the table below:

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Table 1: Mobile Money Deployments in Zimbabwe
Institution Mobile Product
Econet Wireless EcoCash
Kingdom Bank Cellcard
Tetrad EMali
CABS Textacash
Interfin Bank Cybercash
NetOne One Wallet
Telecel TeleCash
FBC Mobile Mobile moola

Source: Kufandirimbwa, Zanamwe, Hapanyengwi & Kabanda (2013: 93)

Of the above listed products, it is the Econet Wireless’ Ecocash that has captured the
limelight and registered an estimated 2 million subscribers to their mobile money
(Kufandirimbwa et al, 2013). EcoCash is the fastest growing mobile money platform after
the Kenyan M-Pesa.

In general, the true meaning of money is central to all forms of transactions. Economists
argue that the two key roles of money are: as a store of value and a means of exchange.
However, since the Zimbabwean market operates a cash economy, mobile phones’ ability to
store value and be used as a means of exchange will depend on users’ adoption of the
mobile money transfer technology. Mobile money can be defined as money that can be
accessed and used via mobile phone. The adjective “mobile”, as used within the specific
contexts of “m- commerce” or “m-business”, signifies an “anytime and anywhere access” to
business processes. The access takes place using mobile communication networks, making
available these services independent of the geographic location of the user.

2.3 Mobile Penetration in Zimbabwe

According to the African Development Bank mobile phone penetration rate in Africa has
exploded since the year 2000, as it has elsewhere in the developing world. In 1998 there
were fewer than two million mobile phone users in Africa, but by 2009, the number had
grown to over 400 million. The mobile telecom operators are therefore increasingly
encouraged by the potential of reaching millions of prospective customers, especially the
rural population who account for more than 60% of Africa’s total population and previously
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had no

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access to banking services. This has not been any different with Zimbabwe as mobile phone
penetration growth rate has been remarkably high over the years. The mobile
telecommunications operators face a daunting task of matching the increased appetite for
MMTs. Econet Wireless Zimbabwe, (the parent company of EcoCash, the leading MMT
platform) has had phenomenal growth in mobile penetration rates during the same period way
ahead of its rivals. In addition, a survey by Finscope (2014)suggested that there are 1.1
million (about 10%) people in Zimbabwe who have bank accounts, compared to the eight
million who possess mobile phones, which indicates a rapid growth in use of mobile phones
in general.

MMT services growth has been facilitated by various conditions such the adoption of the
multi- currency financial systems since 2009, the prevalence of a highly regulated and
protected mobile telecoms market, and notable absence of foreign competing firms .Market
analysts forecast a highly bright future benchmarking against the success stories of
Safaricom’s M-Pesa products in other developing countries such as Kenya and Tanzania.

However, Zimbabweans have traditionally been lethargic in uptake of new technological

products/services exhibited by the slow adoption and implementation of related products such
as e-commerce, e-banking, SMS banking among others. This, coupled with depleting market
confidence in the conventional financial service sector somewhat presents a sceptical
reception of MMT platforms in Zimbabwe.

2.3.1 Mobile Money Transfer Services

Aalborg et al (2003), view mobile money transfer as the process of transmitting money
from one person to another through phone activation that can be ultimately honoured
with cash transactions by a financial or business institution. The study proposed MMT falls
into two main research study areas that is namely mobile payment and mobile banking. He
added that whereas literature on the adoption of mobile banking and mobile payment
and the more broader scope of mobile commerce although not quite exhaustive have
enjoyed significant attention of many scholars in recent times, research on mobile money is at
its formative stages with a few DFID (Department for international Development)of reports
dominating recent research conceptualised from the technical perspective, mobile money
transfer basically involves electronic transactions conducted using a mobile terminal and a
wireless network .

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Mobile terminals include all portable devices such as mobile telephones, as well as
devices “mounted in the vehicles that are capable of accessing wireless networks” and
perform mobile commerce transactions. In addition, mobile money transfers are viewed
as “any transaction with a monetary value that is conducted via a mobile
telecommunications network”. Aalborg focused on the application of mobile hand-held
devices such as mobile phones, smart phones and pocket PCs to transfer money across
subscribers.

In essence therefore, as a process, mobile money transfer refers to the movement of value that
is made from a mobile wallet, accrues to a mobile wallet, and/or is initiated using a
mobile phone. It is thus a platform which allows mobile phone users or subscribers to
transfer money from one to another using their hand-held devices such as smart phones.

This paper accordingly defines mobile money transfer as including business activities
involved in the transfer of value, the buying and selling of goods and services, using handheld
devices such as mobile phones or personal data assistants (PDAs). It includes any
transaction, involving the transfer of money which is initiated and/or completed by
using mobile access to computer-mediated networks with the help of an electronic device.

The adoption of mobile money transfer services is not the same for all countries across the
globe. There is a correlation between economic environment and the adoption of mobile
money transfers systems that is developed countries adoption is not the same for the
developing countries. It has been discovered that in Europe and the US, there has been
limited use of mobile money transfer to date, despite earlier expectations to the contrary. The
slower pace of adoption in these countries is perhaps no surprise, because banked
customers have had little reason to move from accessible, trusted traditional as well as
electronic channels such as internet or use of card at point of sale, to a new approach which is
not yet stable or pervasive. However this is not so for less developed countries like
Zimbabwe which has the majority of the citizens residing in the rural areas where banks
and other financial services are scarce. One common phenomenon in these developed nations
is that MMTs are not a blue-ocean product; rather they are simply an extension of current
product lines. Adoption of product extensions significantly rides on the success of their
predecessors. Needless to say that, the reputation of the parent product paves rapid market
acceptance of any such extensions. The same might not be true for the developing world like
Zimbabwe where MMTs are viewed largely as novel to the world products whose adoption
require methodical analysis, benchmarking against the adoption of such technology related
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initiatives in general.

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Most developing economies depend largely on domestic remittances and Zimbabwe being
one of them. An increase in urbanization in city centres and constant migration means that the
need for money transfer services has been quite significant. Informal methods of remitting
funds to families and relatives possess their own fair share of diverse challenges. One of the
key factors in the choice of remittance services everywhere is accessibility. Until recently,
the main methods of remittance have been through normal channels such as commercial
banks.

Banks also have their own challenges and one fundamental limitation with banks is their
geographic dispersion coupled with their network coverage especially for the largely rural
populace. In the last few years, several mobile money transfer systems have been launched
by the three major telecom operators and as such many Zimbabweans that previously
had no exposure to basic financial services are encountering them for the first time. This
makes it easier to draw customers into the formal banking system where they can be
offered access to a wider and more sophisticated range of products.

2.4 Theoretical Literature Review

In technology adoption literature, the innovation diffusion theory (IDT), technology

acceptance model, and the extended technology acceptance model have been used to explain
possible consumer behaviour on adoption and acceptance patterns of new technologies and
innovations. Several researchers have sought to develop constructs that affect consumers’
behaviour when deciding on the adoption of mobile services by applying these existing
information system theories and models.

To predict innovation adoption, many theories and models have been applied in research
studies of consumers’ intention to use or not use an innovation or Technology. The
importance of researching the user acceptance of a technology has been recognised since the
mid-1980s. Some of these originating theories included the theory of reasoned action (TRA),
the theory of planned behaviour (TPB), then the extended technology acceptance model
(TAM).

2.4.1 The Innovation Diffusion Theory

The innovation diffusion theory (IDT), was developed in 1950s at the University of Chicago
with funding from television producers who sought a way to measure the effectiveness of
broadcast advertising. The IDT explains how, why, and at what rate new ideas and

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technology

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spread through cultures. Not just in information technology exclusively, this theory applies
to other diffusion processes through the society such as the acceptance of new technological.

This theory is applicable in this study where the variables follow the key elements of the
theory which are; innovations, relative to the current knowledge of the analysed unit. Any
idea, practice, or object that is perceived as new by an individual or other unit of adoption
could be considered an innovation available for study. In this case innovation is the adoption
of mobile money and its usage. Another key element of the theory is adopters who are the
unit of analysis. This study will get much of the data for policy recommendations from
adopters than it will get from non – adopters. Communication channels are also key in the
theory. Diffusion, by definition, takes place among people or organizations. Communication
channels allow the transfer of information from one unit to the other. The study looks at
general communication diffusion through adverts from the television or radio.

2.4.2 Theory of Reasoned Action (TRA)

The first theoretical perspective to gain wide spread acceptance in technology acceptance
research was the Theory of Reasoned Action by Fishbein and Ajzen in 1975. TRA is a
versatile behavioural theory that models the attitude-behavior relationships. This theory
maintains that individuals would use computers if they could see that there would be positive
benefits (outcomes) associated with using them.

However, this theory has limitations which would make its applicability to this study
inaccurate and give biased results. One of the limitations is including a significant risk of
confounding between attitudes and norms since attitudes can often be reframed as norms and
vice versa. The second limitation is the assumption that when someone forms an intention to
act, they will be free to act without limitation. In practice, constraints such as limited ability,
time, environmental or organisational limits, and unconscious habits will limit the freedom to
act. However, Thompson et al (1992) state that there is also a growing recognition that
additional explanatory variables are needed for TRA.

The theory is not applicable because it is mainly based on subjective norm and attitude
toward behavior. Subjective norm is the perceived social pressure to engage or not to engage
in a behavior. People’s actions to adopt a new technology are usually governed by the
perceived risk of adoption and perceive usage as compared to the subjective norm and
attitude toward behaviour which are very subjective variables, differing from one person to
another.

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2.4.3 Theory of Planned Behaviour (TPB)
The Theory of Planned Behaviour developed by Ajzen 1985 is a successor of TRA and it
introduced a third independent determinant of intention, perceived behavior control (PBC). It
is determined by the availability of skills, resources, and opportunities, as well as the
perceived importance of those skills, resources, and opportunities to achieve outcomes
(Jenkins 2008). According to Jenkins (2008) states that by changing these three predictors
(attitude, subject norm and perceived behavior control), the chance that the person will intend
to do a desired action can be increased and thus increases the chance of the person actually
doing it.

The Theory of Planned Behaviour (TPB) attempts to resolve the limitations of TRA. TPB has
been the explicit theoretical basis for many studies over various contextual settings. Taylor et
al (1995) emphasize that TPB should provide a more complete understanding of technology
usage. However, Davis et al (1989) explained that social norm scales have a very poor
psychometrics and may not exert any influence on BI, especially when adoptions are fairly
personal and individual usage is voluntary, hence applicability of the theory to the study
becomes less relevant as the main focus is on the behaviour intention of users of mobile
money.

2.4.5 Technology Acceptance Model

Davis, Technology Acceptance Model (1989) was the first model to mention psychological
factors affecting technology acceptance. The model was developed from Theory of Reasoned
Action (TRA) by Fishbein et al in 1975. Davis (1989) developed and validated better
measures through TAM for predicting and explaining technology use. TAM posits that
perceived usefulness and perceived ease of use determine an individual's intention to use a
system with [the intention to use serving as a mediator of actual system use. Perceived
usefulness is also seen as being directly impacted by perceived ease of use. The underlying
links between two key constructs and users’ attitudes, intentions and actual technology usage
behaviour, were specified using the theoretical underpinning of the TRA. Attitude and
perceived usefulness jointly determine the behavioural intention and attitude is determined by
perceived usefulness and perceived ease of use.

Generally, Technology Acceptance Model (TAM) specifies basic determinants of individual

technology acceptance and therefore can be and has been applied to explain or predict
individual behaviours across abroad all ranges of studies (Davis et al 1989). Simultaneously

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TAM compared favourably with TRA and TPB in parsimonious capability (Han 2003).
However, TAM is easier to use than TPB, and provides a quick and inexpensive way of

2
gathering general information about an individual’s perception of a technology. According to
the critical review and meta-analysis of TAM, Legris et al. (2003), claimed the TAM to be a
useful model. Therefore the comparisons confirm that TAM is parsimonious and easy to
apply across different research settings, hence this theory is applicable to the study.

2.4.6 Information Diffusion theory

Rogers (1995) argues that diffusion is the process by which an innovation is communicated
over time among the participants in a social system. The origins of the diffusion of
innovations theory are varied and span multiple disciplines.

Rogers proposes that four main elements influence the spread of a new idea: the innovation
itself, communication channels, time, and a social system. This process relies heavily on
human capital. The innovation must be widely adopted in order to self-sustain. Within the
rate of adoption, there is a point at which an innovation reaches critical mass. This extension
of the IDT is relevant to the study because human capital that is education is considered as a
variable that affects mobile money adoption.

2.4.7 Extended Technology Acceptance Model (TAM 2)

Extended TAM as propounded by Venkatesh and Davis in 2000 is a theoretical extension of
the TAM to include additional key determinants of TAM that explains perceived usefulness
and usage intentions in terms of social Influence and cognitive instrumental processes and to
understand how the effects of these determinants change with increasing user experience over
time with the target technological system (Jenkins 2008).According to the study of Venkatesh
et al (2000) both social Influence processes (subjective norm, voluntariness, and image) and
cognitive instrumental processes(job relevance, output quality, result demonstrability, and
perceived ease of use) significantly influence user acceptance.

Given the theories above, the extended TAM which includes gender is more practical and
applicable to this study because it is the one that is closest to answer the research questions as
it incorporates perceived usefulness, perceived ease of use, subjective norm, gender and
experience

2.5 Empirical Literature Review

Several studies on mobile money have been conducted in both developed and developing
countries some focusing on the adoption issues and others had other subjects of the area.

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Lee et al (2007) examined the factors that influence adoption of M-money in South Korea
using TAM. The data was collected using questionnaires, with a sample size of 250
respondents. Data was analysed through inferential and descriptive statistics through the
support of SPSS. The authors found that the financial-performance risk dimension is the most
salient concern for this sample and its context. The study did not incorporate socio
demographic factors, which play a vital role in adoption. The framework of the model was
based only on TAM which itself does not incorporate other constructs such as intrinsic and
extrinsic motivation, which are fundamental in explaining adoption of mobile money.

Gu et al (2009) explored the adoption of M-money in South Korea, based on TAM model.
The data was collected using online questionnaires and analysis was done using SPSS .The
study found that self-efficiency was the strongest antecedent of perceived ease-of-use, which
directly and indirectly affected behavioural intention through perceived usefulness and
adoption in M-money. However because of the form of the data collection tool used, the
Inability to reach challenging population such as the elderly or those who do not have internet
access and absence of the interviewer affected the overall outcome of the findings.

Wessels et al (2010) studied M-money adoption in the Australian context, using

questionnaires and interviews to collect data. A total of 258 respondents were selected, the
sample size was based on the need to have precision of -7 to 7 precision level. Quantitative
data from the respondents was analysed using descriptive statistics. SPSS was used to analyse
and summarize the findings. They found that perceived usefulness, perceived risk, cost and
compatibility are affecting consumer acceptance of M-money. The study however did not
take in account the diverse social and functional environment which has an influence on m-
commerce adoption, suiting local business culture, mobility, time and operational efficiency
paradigms

Riquelme et al (2010) did a study in Singapore, where a survey was used to test the
consumer’s behavioural intention using questionnaire and iterative review to ensure validity
was done. Data analysis was done using least square multiple linear regression to establish
the relationship between the variables and adoption intention in SPSS. The findings showed
that usefulness, social norms and social risk, are the factors that influence the intention to
adopt M-money in Singapore. However the study used cross-sectional method looking at one
static point in time relating to the current effect. Such a static analysis fails to account for the
dynamic nature of social constructs and behavior.

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Daud et al (2011) examined the critical success of factors influencing the adoption of M-
money in Malaysia using technology acceptance model (TAM). The study was based on data
collected through questionnaires from commercial banks. The study area that is, factors
influencing adoption was selected because of the high mobile penetration rate in Malaysia.
Data analysis was done using SPSS and the Cronbach’s Alpha Index was used to make sure
variables were reliable. The study also made use of the matrix correlation to test for
correlation. The authors found that perceived usefulness, perceived credibility and awareness
have significant effect on user’s attitude and subsequently influence the intention toward
using M-money. However the investigation of mobile money and mobile banking acceptance
in the study suggested five constructs only to gauge customers’ intention to use the relatively
new mode of financial transactions, which are namely perceived ease of use, perceived use,
perceived credibility, perceived self-efficacy and social normative pressure, paying no
attention to social constructs. The extended TAM model itself did not incorporate other
constructs than the five indicated in the study. The location of this study is only confined to
Labuan and Kota Kinabalu. Thus, the sample and its responses may not be a representation of
the beliefs and intention of Malaysians towards using mobile money.

Cheah et al (2011) also did a study in Malaysia were questionnaires were used to collect the
data A total of 150 questionnaires were distributed and 130 responses were collected, of
which 5 were found invalid due to incomplete data. Analysis was done using multiple
regression and factor analysis in SPSS. The results showed that factors such as perceived
usefulness, perceived ease of use, relative advantages and personal innovativeness were
positively related to the intention to adopt M-money. The limitations of the study were that
First, this study employs a cross-sectional method that is data was measured at a single point
in time. Secondly, the findings of the study and its associated implications were gotten from
one study that is confined to a single technology and a particular environment.

Bankole et al. (2011) investigated M-money adoption in Nigeria. Data was collected through
questionnaires. Out of a total of 295 respondents 270 from the questionnaires that were sent
out. Data analysis was done using SPSS software which allowed the frequency and
percentage of distribution to be developed from the analysis of data collected. The frequency
and percentage distribution was used to calculate the personal data information of
respondents, familiarity with mobile usage and the relationship between the factors
influencing consumer behaviour of mobile money adoption in Nigeria. Their results showed
that culture is the most

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important factor influencing M-money adoption behaviour in Nigeria. The study however
looked at factors that affect adoption only from the subscribers’ side and did not highlight

Intermedia (2011) did a study in Tanzania with the aim of identifying trends in uptake and
use of mobile money, because the trend in adoption had shown that in the 2011 there was low
adoption of e-money although the level of awareness was significantly high. Data was
collected through questionnaires and focus group discussions. Data analysis was done
through descriptive statistics and multi regression supported by SPSS. Some of the identified
reasons were network problems, people’s knowledge in using the service since there is no
help available, poor agent customer service, people were aware of the service but not its
benefits and others did not find it reliable, trust worth or convenient. Data that was used was
cross sectional data which was used in comparison with preceding years only captured a
snapshot of the a particular period, which fails to account for the dynamic nature of the study.

Lee et al (2012), did study in South Korea, where data was collected through questionnaires
and interviews, that was collected as panel data over three years where the sample was 2980
Data was analysed using SPSS and STATA and findings showed that connectivity influences
perceived ease of use directly. In addition, perceived monetary value had a significant
effect on perceived usefulness, inferring MFS is not only useful for a firm, but also is useful
from a time and monetary value standpoint. However the use of panel data presents
challenges such as; follow up rates are hard to maintain or increase due to the length of time
involved.

Demombynes et al (2012) conducted a study on Kenya’s mobile revolution and the promise
of mobile saving. The study aimed at examining the mobile saving phenomenon due to the
mobile revolution that has transformed the lives of Kenyans providing not just
communication but also basic financial access in the form of mobile phone based money
transfer and storage. The study also extended to factors affecting the adoption of mobile
financial services among the rural unbanked in Kenya which aimed at identifying drivers and
inhibitors for adoption of mobile financial services and compared results with existing
studies. Data was collected using questionnaires and analysis was done using SPSS to
produce descriptive statistics. The models’ framework was based on the social cognitive
theory which has no moderators as compared to other theories of technology acceptance.

Maradung (2013) also did a study in Botswana to investigate factors affecting the adoption of
mobile money services in the banking and financial industries of Botswana .Data collection

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was done using interviews and questionnaires. The results showed that there was a lack of
support for ownership of a bank account and income had no significance in determining
adoption of mobile money services in the banking and financial services of Botswana.
However the study left out some variables such as age were the sample predominantly
included young people who did not have jobs and had not yet opened bank accounts.

Another study done in Tanzania by Chogo et al (2014) aimed at exploring factors affecting
mobile money adoption in Tanzania, mainly in Dar-es-salaam. Data collection was done
through questionnaires and interviews, with a sample size of 150 respondents. Data was
analysed using descriptive statistics w and for quantitative analysis multiple regressions and
multiple correlations were done with the support of SPSS statistical package. Findings of
the study concluded that there is low adoption of mobile money in Tanzania although it is
needed as customers feel that it helps them save time. Moreover it shows that in order for
mobile money services to be adopted customers should be aware of it; it should give them
expected value and have usability qualities. The main factors affecting the adoption were
poor agent network and poor user support. Other factors are insufficient service awareness,
high transaction cost, and fear for money safety, unfriendly interface design and lack of
procedure training. The main shortcoming of the study was that it was done in one region in
Tanzania against 29 other regions, hence the findings of the study cannot be used for
generalization for the whole of Tanzania.

Nyahuwa (2014) did a study which highlighted consumer awareness, usage level and the
factors that drive and inhibit the use of mobile money in Bindura .The study used
questionnaire and interviews to obtain data. Data analysis was done using SPSS and
descriptive statistics. The findings showed that the respondents were aware of mobile money
payments and used mobile money services such as air time top up and bill payment. The
findings were consistent with other studies done in Africa such as those done in Kenya which
showed that fund transfer was the most used service. However the study was only done in
Bindura and cannot be used to generalize adoption for the whole of Zimbabwe. Also the
study employed a cross sectional method which only looked at one specific point in time.

Lesa et al (2016) aimed to highlight consumer’s behavioural intention to use or not-use

mobile payment (m-payment) services in Zambia. A sampling size of 180, on paper based
questionnaires, was distributed via a convenience sampling method covering current users of
m-payment, capable users, Merchants and Bank staff. Out of 180 questionnaires, 152 were

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completed and returned resulting in response rate of 84 Percent. Data was analysed using
SPSS statistics package in order to yield Pearson correlations among variables and a linear
regression analysis to come up with a model for predicting respondents’ intention to adopt m-
payment services. The results showed that service providers can leverage on high mobile
penetration to promote M-payments services by enhancing factors that have high significance
in Zambia, such as convenience and trust.

The above studies show that the areas has been widely studied but each researcher had
a different specific area of focus and coverage likewise this study had its own focus point
which is exploring the factors affecting mobile money adoption in (Bulawayo) Zimbabwe,
taking into account the current financial situation in Zimbabwe.

2.6 Chapter summary

This chapter looked at the relevant theoretical and empirical literature in depth to support the
study. It also looked at the overview of mobile money servicers and mobile penetration in
Zimbabwe as a whole. The chapter also highlighted the service providers and their most
known mobile money products.

CHAPTER III
3.0 Research Methodology

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This section considered the various techniques and methods that the researcher used in
collecting and analysing data for this research. A research methodology must be systematic,
rigorous, convectional and unbiased (Mason et al 1999). The major areas of particular
concern in this study are: the study area, target population, the sample, the collection of
primary data, the data analysis techniques that will be used in arriving at the solution to the
problem under study.

3.1 Research Design

According to Churchill (2002), a research design is a master plan specifying methods and
procedures for collecting and analyzing the required data. It is a means that is to be followed
in completing a research study. The research design helps the researcher to obtain relevant
data to fulfill the objectives of the study. There are three types of research designs namely;
exploratory, descriptive and causal research designs.

The study was conducted in Bulawayo province of Zimbabwe. Bulawayo was selected
because it is the second largest city in Zimbabwe and because of its location proximity to the
researcher. The research design used in this study was the case study which falls under the
descriptive research design. Case study allowed the researcher to perform the study on a
single social unit. Case study also allowed the mix of qualitative and quantitative methods. It
also allowed triangulation which is technique that facilitates validation of data through cross
verification from two or more sources. In particular, it refers to the application and
combination of several research methods in the study of the same phenomenon (Adam et al
2008). Another advantage of case study is that within the case study, scientific experiments
can be conducted. Case studies can help experimenters adapt ideas and produce novel
hypotheses which can be used for later testing.

3.2 Population and Sampling Procedures

According to Wanjiku (2010), population refers to an entire group of individuals, events or
objectives having common observable characteristics. The targeted population for this study
is divided into two groups of people namely non adopters and adopters of mobile money in
Bulawayo. The age of the targeted population ranged from 18 years to 70 years and included
both males and females who were grouped according to residential location that is those from
the low, middle and high densities.

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3.3. Sampling techniques
3.3.1Sample and sample size
Kothari (2006) defines sample as a collection of some parts of the population on the basis of
which judgment is made. A sample is small enough to make data collection convenient and
large enough to be a true representative of the population from which it had been selected.
Sample size refers to a number of items to be selected from the population of the study to
constitute a sample. The sample must be optimum that is it fulfills requirements of efficiency,
reliability and flexibility. The sample size was 200 people including both adopters and non-
adopters of mobile money.

3.3.2 Sampling procedure

According to Kothari (2006), sampling is defined as the selection of some parts of aggregate
of the totality based on which a judgment or inference about the aggregate or totality is made.
It is a process of selecting a group of people, events, behavior, or other elements with which
to conduct a study. An important issue influencing the choice of a sampling technique is
whether a sampling frame is available, that is, a list of units comprising the study population.
During the study, the researcher employed the use purposive sampling method to select
respondents from among the population. The researcher will make use of non-probability
sampling because the researcher had no sampling frame which the sample will be drawn
from. Also, there is no assurance that every person in the targeted population has a chance of
participating in the study hence a non-proportional quota sampling method will be used in the
distribution of questionnaires.

3.3.3 Data collection methods

Questionnaires were used in this study because they enable the researcher to get detailed
information on the subject matter. Questionnaire are relatively cheap way of collecting data
and covered a large number of the subscribers and capture high volume of data within a short
space of time. Data provided by questionnaires are easy to analyse and interpret.
Questionnaire become suitable for this research because they reach out to the specific
intended target. Questionnaires were used to gather information about the users such as
information on their educational and income levels. The choice of questionnaire as the data
collection technique was also based on its advantages over other competing data collection
methods such as face- to-face interviews, observations, and focus group discussions (FGDs).
A questionnaire gives the respondents the freedom to answer questions without undue
Influence.

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The research involved structured questionnaire, where the questions were open in
dichotomous or multiple choice and were presented with exactly the same wording and in the
same order to all respondents replying to the same set of questions (Kothari 2006).

3.4 Data analysis and presentation

Data collected was prepared for analysis by editing, summarizing and classifying. Then
towards analysis coding was done. Both qualitative and quantitative method of data analysis
where used. For qualitative analysis descriptive statistics will be used and for quantitative
analysis a probit regression using a probit model will be used with the support of Stata and
SPSS statistical packages (Kothari 2006). A probit model is used to model dichotomous or
binary outcome variables. The main advantage of probit is that it is easier to interpret,
understand and generalize as compared to the logit model which can also be used to model
dichotomous outcome variables , for instance to multiple binary variables that are
endogenous, one can use a bi-probit model to handle endogeneity.

Within the survey data, there are both mobile money users and non-users. Hence, it is
important to examine the factors influencing the adoption status using binary dependent
variable models. Mobile money adoption decision is dichotomous and therefore probit
models will be used to analyse awareness and adoption of the technology.

3.5 Probit Model

In statistics a probit model is a type of regression where the dependent variable can only take
two variables. The purpose of the model is to estimate the probability that an observation
with particular characteristics will fall into a specific one of the categories. A probit model is
a popular specification for an ordinal or binary response model. As such it treats the same set
of problems as logistic regression using similar techniques. The probit model, which employs
a probit link function, is most often estimated using the standard maximum likelihood
procedure, such an estimation being called a probit regression. Probit models were introduced
by Chester Bliss in 1934; a fast method for computing maximum likelihood estimates for
them was proposed by Ronald Fisher as an appendix to Bliss' work in 1935.

3.5.1 Conceptual Framework

Suppose a response variable Y is binary, that is it can have only two possible outcomes which we

will denote as 1 and 0. For example Y may represent presence/absence of a certain condition,

3
success/failure of some device, answer yes/no on a survey, etc. We also have a vector of

regressors X, which are assumed to influence the outcome Y. Specifically, we assume that the

model takes the form;

Pr(𝑌 = |𝑋) = 𝛷(𝑋𝑇𝛽)

Where Pr denotes probability and Φ is the cumulative distribution function of the standard
normal distribution. The parameters  are typically estimated by likelihood. It is possible to
motivate the probit model as a latent variable model. Suppose there exists an auxiliary
random variable;

𝑌∗ = 𝑋𝑇𝛽 + 𝜀

Where ε ~ N (0, 1). Then Y can be viewed as an indicator for whether this latent variable is
positive.

𝑌 = 1 (𝑌∗ > 0; 0 𝑖𝑓 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒)

= (1 𝑖𝑓 − 𝜀 < 𝑋𝑇𝛽; 0 𝑖𝑓 𝑜𝑡ℎ𝑒𝑟𝑤𝑖𝑠𝑒)

The use of the standard normal distribution causes no loss of generality compared with an
arbitrary mean and standard deviation because adding a fixed amount to the mean can be
compensated by subtracting the same amount from the intercept, and multiplying the standard
deviation by a fixed amount can be compensated by multiplying the weights by the same
amount. To see that the two models are equivalent;

Pr(𝑌 = 1|𝑋)

= Pr(𝑌∗ > 0)

= 𝑃𝑟(𝑋𝑇𝛽 + 𝜀 > 0)

= Pr(𝜀 > −𝑋𝑇𝛽)

= 𝑃𝑟(𝜀 < 𝑋𝑇𝛽)

= 𝛷(𝑋𝑇𝛽)

3
3.6 Model Estimation
3.6.1 Maximum likelihood Estimation
Suppose data set (yi,xi) contains n independent statistical units . Their joint likelihood function
is;

𝐼𝑛 𝐿(𝛽) = (𝑦𝑖 𝐼𝑛𝛷(𝑋1𝛽) + (1 − 𝑦𝑖)𝐼𝑛(1 − 𝛷(𝑋1𝛽))

The first order conditions arising from this equation are nonlinear and non-analytic.
Therefore, we have to obtain ML estimates using numerical optimization methods, such as
the Newton- Raphson method. The estimator of  which maximizes this function will be
consistent, asymptotically normal and efficient provided that E (XX') exists and is not
singular. It can be shown that this log-likelihood function is globally concave in, and
therefore standard numerical algorithms for optimization will converge rapidly to the unique
maximum.

Asymptotic distribution for the estimator of  is given by

√𝑛(𝛽̂ − 𝛽) → 𝑁(0, −1)

𝜑2(𝑋1𝛽)
=𝐸 𝑋𝑋1
𝛷(𝑋1𝛽)(1 − 𝛷𝑋1𝛽))

1
2̂ =1  𝑥𝑥1
𝜑 (𝑋 𝛽̂ )
𝑛 𝛷(𝑋 1 𝛽̂ )(1−𝛷(𝑋 1 𝛽̂ )

And φ = Φ' is the Probability Density Function (PDF) of standard normal distribution.

3.6.2 Model Evaluation

The suitability of an estimated binary model can be evaluated by counting the number of true
observations equalling 1, and the number equalling zero, for which the model assigns a
correct predicted classification by treating any estimated probability above 1/2 (or, below
1/2), as an assignment of a prediction of 1 (or, of 0).

For this study the researcher used the following probit model;

3
𝑀𝑀 = 𝛽0 + 𝛽1𝐴𝑔𝑒 + 𝛽2𝐺𝑒𝑛𝑑𝑒𝑟 + 𝛽3𝐸𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛 + 𝛽4𝑅𝑒𝑠𝑖𝑑𝑒𝑛𝑐𝑦 + 𝛽5𝑆𝑎𝑣𝑖𝑛𝑔𝑠 𝑎𝑐𝑐𝑜𝑢𝑛𝑡
+ 𝛽6𝑅𝑒𝑚𝑖𝑡𝑡𝑎𝑛𝑐𝑒𝑠 + 𝛽7𝑀𝑜𝑏𝑖𝑙𝑒 𝑝ℎ𝑜𝑛𝑒 𝑜𝑤𝑛𝑒𝑟𝑠ℎ𝑖𝑝
+ 𝛽8𝑇𝑟𝑢𝑠𝑡 𝑖𝑛 𝑚𝑜𝑏𝑖𝑙𝑒 𝑚𝑜𝑛𝑒𝑦 + 𝛽9𝐹𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑙𝑖𝑡𝑒𝑟𝑎𝑐𝑦 + 𝜀

3.7 Definition of
variables 3.7.1Residence
The location of a mobile money agent will determine the willingness of a person to use mobile
money. For example if someone lives in town where there are many mobile money agents
their willingness to use mobile money is high as compared to someone who lives in the
outskirts were mobile money agents may be far from their residences. In the study residence
is divided into three categories that is low, medium and high density which will be denoted
and measured using ranges one, two and three respectively.

3.7.2 Trust in mobile money

There is a positive relationship between trust in mobile money and adoption of the service. If
customers have little trust in new innovations there are more reluctant to adopt the
technology. Given the study in question if people feel that their money is safe when it has
been converted to electronic money they are bound to adopt mobile money. In the study the
researcher used the Likert scale to assign weight and importance to the variable trust in
mobile money. Responses ranged from one to five with one being completely trust and five
do not trust at all.

3.7.3 Financial literacy

In general low levels of literacy, and education in general can obstruct the economic
development of a country in the current rapidly changing, technology-driven world (CIA,
2013) considered low level of financial literacy as one of the challenges to the development
of technology- based services such as mobile money. Full exploitation of mobile money
services requires some significant level of financial literacy. Financial literacy in the study
was measured using rank order scale, where respondents were given a list of financial
instruments and had to rank the instruments according to their knowledge on those
instruments, their importance and effectiveness.

3.7.4 Demographics
The impact of demographics on electronic services adoption has been extensively studied in
the past (Cruz et al 2009; Laukkanen et al 2007; Pasanen et al 2008). Studies focusing on the

3
adoption of new technologies refer to a predominance of male, younger, more educated and
higher income persons, when compared to those who do not adopt innovations (Sim et al
2002)

3.7.5 Education
Education has been shown to have a significant impact on the adoption of mobile money and
mobile banking services (Mattila et al 2003). Padachi et al (2007) argue that the higher the
education level achieved, the greater the probability of the customer adopting mobile money
services. A greater level of education could lead to a greater understanding and ability
regarding self-service technologies (Meuter et al 2005) and lower perceptions of complexity
of innovations. In this study education is measured in the following categories that are,
primary level, O’level, A ‘level, diploma, undergraduate and post graduate.

3.7.6 Income
Income has been established to be significant in determining the adoption of mobile money
services. According to Madden et al (2000), individuals who tended to use the internet early
in Australia were young males, with high levels of income. Furthermore, Rogers (2003)
shows that economic status/income is highly correlated to initial adoption. According to
Medhi et al (2010), the uptake of m-banking services in a location seemed to depend on
whether adoption was forced or optimal depending on the kind of employment of the
household's wage earners. The higher the income ladder, that is, the more affluent people are,
the more likely they are to possess cell phones, thus more likely to use mobile money and
mobile banking. A higher household income could also represent, simultaneously, greater
time-saving motivations to use mobile services, as well as utilising opportunities for
accessing updated devices, such as mobile ones (Meuter et al 2005). In the study income was
measured in categories that ranged from $0 up to $500

3.7.7 Age
Previous research shows that older people have a lower tendency to adopt new technology
based services (Oumlil et al 2000). According to Rogers (2003), the adopter of a new
technology is typically younger, has a good income and appropriate level of education and
more reactive to new innovation than a non-adopter. Padachi et al (2007) maintains that the
younger the generation the more they are used to new technological advancements as
compared to the older generation; thus they are more likely to adopt mobile money services.
Age was measured in categories that ranged from 18 – 30, 31-40, 41-50 and those above 50
years.

3
3.7.8 Gender
Gender or sex is among the most researched demographic determinant in mobile and
electronic services. Chen and Wellman (2004) in a study which focused on internet usage in
China, Germany, Korea, Italy, Japan, Mexico, UK and the USA found that men are more
likely than women to use the internet and the rate of adoption is high for young people who
understand English and live in urbanised environments. When compared to women, males
perceive less risk in online business activities (Garbarino et al 2004). Males tend to evaluate
mobile commerce more positively than women (Yang, 2005). Some studies evidence a male
preponderance among users of mobile banking services (Flinders, 2008; Laforet et al 2005;
Laukkanen et al, 2008).

3.7.9 Bank account – Savings account

Mobile money services have enabled easy access of the unbanked to financial and banking
services. Heyer et al (2009) argue that access to formal bank accounts may be very limited in
emerging markets, as banks are often not able to compete directly with non-bank providers
owing to higher fixed and operating costs and much more limited physical presence. The first
group of factors for M-PESA's success points to failure by the existing financial institutions
to meet the needs of the unbanked (Ngugi et al 2010). According to Pelowski et al (2010),
only 19% of the Kenyan population had access to banking services by the time M-PESA was
launched in 2007. Mobile money serves as a phone-cum savings account, thus enabling
people without a formal bank account to engage in a safer and more efficient savings
mechanism. It actually improves efficiency and regularity of savings (Nandhi, 2012).

Morawczynski (2011) revealed that incomes for rural mobile money users increased due to
remittances which also led to higher savings. Demombynes et al (2012) demonstrated the
possibility of mobile money increasing savings while Jack et al (2011) assert that mobile
money users saved to store funds safe from dangers of theft and inaccessibility to other
family members. They further postulate that savings have the potential of adding social value
to those constrained by cost opening a bank account and large distance between their
household and the closest formal savings establishment (Jack et al 2011).

3.8 Chapter summary

This chapter described the methodology that was used in this study. It outlined the research
design adopted, the population surveyed, and data collection method applied. It also

3
highlighted much on the study area of interest with the reasons that led to the choice of the
areas. The explanation of the instruments used to collect data during the research has also
been given so as to put the reader in the picture of how data were collected.

3
 CHAPTER IV

4.0 Data findings, analysis and discussions

This section discusses data findings of the factors that affects mobile money adoption in
Bulawayo (Zimbabwe). The study employed probit mechanism to augment the assertions of
the previous chapters .The findings of the study are presented according to the specific
research questions in the form of tables. The respondent rate was 100 percent which is
favorable to make conclusions. The collected data was edited and coded. Data analysis was
done using SPSS and Stata.

4.1Descriptive Statistics
4.1.1Gender of Respondents

There were 200 respondents that were reached out to, but only 150 questionnaires were used.
Data of the gender respondents of adopters and non- adopters is presented in graph 4.1

ADOPTERS AND NON-ADOPTERS

100

80

60

40

20

0
female male

adoptnon

Figure 1: Gender of Respondents

The graph above shows the gender of both adopters and non-adopters of mobile money. The
research showed that 59.26% of the female respondents adopted mobile money and 55.91%
of the male respondents adopted money mobile. This is contrary to findings of Chen et al
(2004); Garbarino et al (2004); and Laukkanen et al (2008) that found men being more
likely than
3
women to use the internet and mobile commerce. However due to the extensive women
economic empowerment programs that have been running in Zimbabwe women’s economic
empowerment sets a direct path towards gender equality and inclusive economic growth.
Hence women empowerment programmes have helped women to be more economically and
financially independent allowing them to manage their own finances.

4.2 Age of Respondents

The mean ages of adopters and non- adopters are between 38 years and 42years respectively.
Adopters of mobile money were younger individuals in the research. This is supported by
literature as studies such as those of Padachi et al (2007); Etim et al (2014) and Saliu (2015)
found similar results.

4.3Level of Education
Adopters have a mean education level of 0.75% and non-adopters have a mean of 0.46%.In
practice this means that higher levels of education in an individual increases their chances of
adopting a new technology such as mobile money. This is line with findings from studies
such as Meuter (2005) who states that a greater level of education could lead to a greater
understanding and ability regarding self-service technologies

4.4Level of income
The level of income is presented for adopters and non-adopters is presented in Table 4

Table 2: Level of income

Adopters Non-adopters
251.6668 111.8332

The table above shows that higher levels of income will prompt adoption of mobile money.
The higher the income ladder, that is, the more affluent people are, the more likely they are
to possess cell phones, thus more likely to use mobile money and mobile banking.
Similar results were found by Medhi et al (2010); Maradung (2013) and Kufandurimbwe et al
(2013) showing that income plays a vital role in adoption of mobile money services.

4.5T-Test
Table 3: Showing t-test results
Mean Mean of Differences

3
 of Adopters Non-adopters
Financial literacy 0.229 -0.252 -0.48***
Trust in Mobile Money 0.885 0.757 -0.13***
Age 38.397 41.982 3.58***
Gender 0.441 0.407 -0.03**
Income 251.667 111.833 -139.83***
Education 0.752 0.458 -0.29***
Mobile phone 0.916 0.726 -0.19***
Time to Shop 2.171 2.704 0.53***
Saving Club 0.203 0.095 -0.11***
Bank/Saving account 0.200 0.051 -0.15***
N 200
*p < 0.10,(significant at 10%) ** p < 0.05,(significant) *** p < 0.01(very significant)

The table above shows the T-tests that were calculated on the basis of independent tests of
each variable with regards of both adopters and non-adopters. Differences were calculated by
subtracting the mean of non- adopters from the adopters to establish whether the variables
were statistically different and significant in determining adoption. Hence, the table showed
that financial literacy, trust in mobile money, age, income, education, mobile phone
ownership, savings club, bank/savings account were very significant in determining whether
one adopts mobile money or not. However income was significant, meaning the differences
in mean levels of income for both adopters and non-adopters were only significant at 5%
showing that income has less impact of adoption decision. This is in line with findings by
Maradung (2013), Medhi et al (2010) and Kufandurimbwe et al (2013).

4.6Regression results
Table 4: Probit regression results

Mobile money
Marginal Effects Std. err.
Financial literacy 0.022* 0.012
Trust in Mobile Money 0.172*** 0.027
Age 0.012*** 0.003

3
 Gender 0.020 0.020
Income 0.000 0.000
Education 0.167*** 0.024
Mobile phone 0.189*** 0.029
Time to the Shops -0.027*** 0.007
Saving Club 0.087*** 0.025
Bank/Saving account 0.175*** 0.028
N 200
P 0.000***
Ll -1676.871
Marginal effects for discrete change of dummy variable from 0 to 1
*p < 0.10,(significant at 10%) ** p < 0.05,(significant) *** p < 0.01(very significant)

The results above show the marginal effects of the regressors against mobile money, that is
the instantaneous effect that a change in a particular explanatory variable has on the predicted
probability of when the other covariates are kept fixed. Marginal effects measure discrete
change that is how predicted probabilities change as the binary independent variable changes
from 0 to 1. Trust in mobile money increases the probability of mobile money adoption by
17.2%. The security and the trustworthiness of a technological service have been identified as
the most important factors within every target customer segment when the use of a service
delivery channel is decided (Githui, 2011). Mattila (2003) maintains that there is
trustworthiness in the usage of mobile phones in transferring and storing money. Davidson et
al (2009) also talk about trustworthiness; they mention that customers will never use mobile
financial services if they do not believe that their money will be safe. In that regard trust in
mobile money is a significant factor that determines mobile money adoption.
Age is also a significant variable that determines adoption of mobile money. Younger
individuals were found to be more susceptible to adoption as compared to older people. This
is cohesive with findings of other researchers such as Padachi et al (2007); Etim et al (2014);
Maradung (2013) and Kithinji et al (2014).

Education increases the probability of adopting mobile money by 16.7% that is more
educated individuals adopted mobile money more as compared to those with little or no
education. Rajanish et al (2006); Sanja et al (2014) and Marudang (2013) also found similar
results and concluded that education a significant impact on the adoption of mobile money

4
and mobile

4
banking services.
Owning a mobile phone increases the probability of adopting mobile money by 18.9%,
because ownership makes operation of mobile money by individual easier through their own
personal phone rather than a borrowed gadget or an agent’s phone.
Savings club and bank/savings account also has a significant impact on mobile money
adoption. Savings club as a form of informal savings have shown to be a prevalent
phenomenon in Zimbabwe, because of the loss of decade where many Zimbabweans lost
confidence in the financial sector and banks. Service providers such as Econet have
introduced a number of saving mechanisms through their customary mobile money facility
Ecocash, which offers services such as Ecosave. Having a bank account or formal savings
account increases the probability of adopting mobile money by 17.5%. Mobile banking is an
extension of mobile money. Users of mobile money in the survey were also characterized by
the use of the extension

Residence is measured in terms of the distance and time taken to reach a grocery shop so as
to establish the differences between residence in low, medium and high density in relation to
mobile money adoption. Time to the shops was very significant because the further away you
live from the shops, where mostly mobile money agents are found the less likely one is to
adopt mobile money. Other variables such as financial literacy are significant at 10%.

4.7Discussion of results

This chapter began with giving descriptive statistics of the variables gender, age, education
and income. The descriptive statistics provided simple summaries about the sample and
measures. Independent T-tests were done so as to establish the statistical differences of each
variable for both adopters and non-adopters. The mean differences of all variables except
gender were significant.
The probit regression results highlighted trust in mobile money, age, education, mobile phone
ownership, time to the shops, savings club and bank/savings account to be very significant
factors that determine mobile money adoption. Trust in mobile money was significant in
determining whether one adopts mobile money or not. Mattila (2003) maintains that there is
trustworthiness in the usage of mobile phones in transferring and storing money. Hence an
individual will only use mobile money if they feel that their funds are not safe.
The adopter of a new technology is typically younger, has a good income and appropriate

4
level of education and more reactive to new innovation than a non-adopter (Rogers
2003). The

4
descriptive statistics showed that individuals with the mean of 38years, who were more
educated and had relatively higher income adopted mobile money as compared to those who
were older, less educated and relatively lower income.
During analysis the researcher also picked up that access to information through TVs and
radio through adverts also influenced adoption. This answered the research question on
institutional factors that determine mobile money adoption. Provision of information by
service providers is a crucial component as it contributes to financial literacy of the clientele.

4.8Chapter summary

This chapter looked at the presentation and analysis of the data which was obtained in
Chapter 3 by using the student t-test and the probit regression model. Descriptive statistics
were also used to summarize data about the sample and mean measurements. Together with
simple graphics analysis, they formed a basis of quantitative analysis of data.

4
4
 CHAPTER V

5.0 Introduction
This chapter wraps up and concludes the whole research. Factors that determine mobile
adoption are highlighted briefly as shown in the preceding chapter. Recommendations and
suggestions for future study form an important aspect of this concluding chapter as well.

5.1 Summary
The study was projected at investigating the key factors that determine mobile money
adoption in the city of Bulawayo Zimbabwe. The study objectives were to determine the
socio demographic factors and the institutional factors that influence mobile money adoption
and to provide policy recommendations for improving mobile money adoption in Bulawayo.
The analysis of the results revealed that income and gender were found to be insignificant
determining mobile money adoption in Bulawayo.Maradung (2013) also found the same
results in Botswana, the results showed that there was a lack of support for ownership of a
bank account and income had no significance in determining the adoption of mobile money
services in the banking and financial services of Botswana.

Education, trust in mobile money, mobile phone, time to the shops, saving club and
banking/saving account were found to be significant in explain the adoption of mobile money
in Bulawayo.Rajanish et al (2010);Sanja etal (2014) and Marudang (2013) also found the
same results and concluded that these variables have a significant impact on the adoption of
mobile money and mobile banking services.

The independent t tests for each variable for adopters and non-adopters were done and the
results showed that the mean differences for all the variables except gender were very
significant. The researcher also picked up that access to information for example through
television and advertisement also influenced the adoption.

There is a significant relationship between socio demographic factors and mobile money
adoption and this is coherent with the social cognitive theory propounded by Bandura in
1986. The theory stipulates that demographic characteristics are equally significant in
determining behaviour. Further, more variables: gender, age, and experience, from
SCT(Social Cognitive Theory) were found significant as to whether they play an important
role in the explanation of technology acceptance (Losh 2004; Colley and Comber 2003;
Venkatesh and Davis 2000).

4
5.2 Policy recommendations
Following this study the results are likely to provide a frame for some policy implications.
Zimbabwe has been facing serious cash shortages and movement towards a cashless economy
seems to be the viable option. Mobile money and banking technology has indeed included
more people who were previously financial excluded into the financial sector. Over time
increased access to formal financial services, including mobile bank accounts will boost
economic growth and diversification; by increasing productivity and facilitating investment
in small and medium sized enterprises. Given mobile money’s ubiquity and the growing
discomfort with cash queues will see more customers sign up for mobile financial services.
Therefore it is up to the service providers and the government at large to try and exploit as
much as possible the benefits of using mobile money.

5.3To the service

providers 5.3.1Trust
Given that trust in mobile money was a significant factor in determining adoption of mobile
money, it is up to service providers to assure the public that their money is safe at all times if
they adopt mobile money, especially among the illiterate. Trust in mobile money is given by
trust in the brand itself, as one in which customers will be comfortable entrusting their funds.
Trust also extends to trust in the service’s network for example the mobile network
connectivity will function as promised. There should be also trust that the agents will do what
they are supposed to do with the customer’s funds and transactions. Lastly the customers
must also have trust that individual transactions will be fulfilled as expected. The service
providers would have to make sure that they completely gain the trust of customers fully.

5.3.2 Educational programmes

Low levels of financial literacy can obstruct mobile money adoption. There is a link between
education and financial literacy that is less educated individuals are less knowledgeable about
basic financial literacy (Lursadi et al 2014). The Government may put in place policies that
enables Service providers to run programmers aimed at teaching people basic financial
concepts on how to manage finances or how to invest in rewarding investments and basic
portfolio management. This can also be done through the television or radio where customers
can get access to information, in the form of different service packages of mobile money that
suit their needs at that particular time for example one can learn about Ecosure funeral cover
over the radio.

4
5.3.3 Convenience
To enhance convenience and accessibility, the provision of more mobile money agents in all
areas across the country is also required so as to increase the accessibility mobile money
services. The Bulawayo city council may avail small spaces/stands for service providers at an
affordable price especially in residential areas .This will increase out reach of mobile money
services since time taken to the grocery shop significantly affects the adoption of mobile
money

Over and above the mentioned recommendations the government together with the service
providers should come together and work as one front so as to fully capture the benefits of
using mobile money.

5.4Further Research
There is need to widen the sample size. This study only focused on Bulawayo province yet
there are nine other provinces in Zimbabwe. The sample size is therefore small for the
generalisation of results. There is also need to look into detailed behaviours of users of
mobile money, their usage patterns, frequency, income levels etc. Other social variables such
as cultural aspects of decision making should also be incorporated, so as to reach a conclusive
If trust in mobile money is a major driver for adoption of mobile money is urban areas, there
is need to test the same in rural areas especially with those who have access to banking
accounts. This would help to establish other key motivations for mobile money usage such as
user experiences.

5.5Chapter summary
This chapter sums the whole of the study, giving recommendations and policy implications. It
also gives areas for further research which the researcher found relevant in affecting mobile
money adoption.

4
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5
APPENDICES

APPENDIX I
Correlation output
*Correlation matrix

. pwcorr Mobilemoney Financial_literacy TrustMobileMoney AgeRes GenderResp Financial_literacy

Income Education Mobilephone TimetoGroceryShop Saving

> Club BankSaving_account, star (0.05)

Mobile~y Financ~y TrustM~y AgeRes Gender~p Financ~y

Mobilemoney 1.0000

Financial_~y 0.2574* 1.0000

TrustMobil~y 0.1684* 0.1356* 1.0000

AgeRes -0.1121* -0.1011* -0.0363* 1.0000

GenderResp 0.0338* 0.0846* -0.0252 0.1132* 1.0000

Financial_~y 0.2574* 1.0000* 0.1356* -0.1011* 0.0846* 1.0000

Income 0.2331* 0.2876* 0.0050 -0.1252* 0.0134 0.2876*

Education 0.3008* 0.2894* 0.0773* -0.4532* 0.0432* 0.2894*

Mobilephone 0.2500* 0.1439* 0.0400* -0.10 0.0292 0.1439*

TimetoGroc~p -0.1901* -0.1267* 0.0074 0.1196 0.0172 -0.1267*

SavingClub 0.1503* 0.1605* 0.0536* -0.0157 -0.1327* 0.1605*

BankSaving~t 0.2222* 0.2927* 0.0107 0.0558* 0.1008* 0.2927*

Income Educat~n Mobile~e Timeto~p Saving~b

Income 1.0000

Education 0.2571 1.0000

Mobilephone 0.1631* 0.2048 1.0000

TimetoGroc~p -0.2055 -0.2050 -0.1208* 1.0000

SavingClub 0.1517 0.1201 0.0914* -0.0655* 1.0000

BankSaving~t 0.3398 0.1566 0.1358* -0.1348* 0.1206*

BankSa~t

6
BankSaving~t 1.0000

APPENDIX II

Probit regression
dprobit Mobilemoney Financial_literacy TrustMobileMoney AgeRes GenderResp Financial_literacy
Income Education Mobilephone TimetoGroceryShop Savin

> gClub BankSaving_account, vce (r)

note: Financial_literacy dropped because of collinearity

Probit regression, reporting marginal effects Number of obs = 200

Wald chi2(12) = 61.24

Prob > chi2 = 0.0000

Log pseudolikelihood = -1676.8713 Pseudo R2 = 0.1442

Robust

Mobile~y dF/dx Std. Err. z P>|z| x-bar [ 95% C.I. ]

Financ~y .0220488 .0116213 1.90 0.058 .107603 -.000729 .044826

TrustM~y* .1724002 .0272209 6.41 0.000 .837432 .119048 .225752

AgeRes .0117457 .003408 3.45 0.001 39.0864 .005066 .018425

Gender~p* .0197409 .0198826 0.99 0.321 .441257 -.019228 .05871

Income .0001132 .0000805 1.40 0.161 203.804 -.000045 .000271

Educat~n* .1671158 .023533 7.13 0.000 .662568 .120992 .21324

Mobile~e* .1887868 .0288831 6.60 0.000 .859631 .132177 .245397

Timeto~p -.0265956 .0073432 -3.63 0.000 2.37602 -.040988 -.012203

Saving~b* .0874235 .0254414 3.32 0.001 .17179 .037559 .137288

BankSa~t* .1745485 .0275858 5.67 0.000 .153005 .120481 .228616

obs. P .6089481

pred. P .629347 (at x-bar)

(*) dF/dx is for discrete change of dummy variable from 0 to 1

z and P>|z| correspond to the test of the underlying coefficient being 0

6
APPENDIX III

T-tests

Descriptive analysis

. estpost ttest Financial_literacy TrustMobileMoney AgeRes GenderResp Financial_literacy Income

Education Mobilephone TimetoGroceryShop SavingClub

> BankSaving_account, by (Mobilemoney)

e(se) e(t) e(mu_1) e(mu_2)

Financial_~y .0285853 -16.83261 -.2519936 .2292211

TrustMobil~y .127624 -10.0243 .756662 .8845963

AgeRes .5024018 7.134188 41.98165 38.39742

GenderResp .0156478 -2.140312 40.74463 .4409374

Income 10.01797 -13.95827 111.8332 .2516668

Education .0147203 -19.93722 .4583115 .7517934

Mobilephone .0116481 -16.31875 7257472 .9158297

TimetoGroc~p .0436467 12.19151 2.703507 2.171387

SavingClub .0112212 -9.612155 .0949135 .2027738

BankSaving~t .0103447 -14.40726 .0508652 .199904

. esttab ., wide c("mu_2(fmt(3) label(Adopt)) mu_1(fmt(3) label(Notadopt)) b(fmt(2)

label(Differences)star)") ///

6
APPENDIX IV

Questionnaire

REQUEST TO COMPLETE A QUESTIONAIRRE

FACTORS AFFECTING ADOPTION OF MOBILE MONEY IN ZIMBABWE (BULAWAYO)

My name is Agatha R. Changau a fourth year student studying Bachelor of Commerce

Honours Degree in Economics at Lupane State University. I am conducting a survey on
factors that affect mobile money adoption as a partial fulfilment of my degree. Your
participation is solely voluntary. All your answers will remain confidential and shall be solely
used for the purposes of the study. Respondents will retain their anonymity. Positive
responses will be greatly appreciated.

THANK YOU

6
Date of Study ………………………………………………………………………………..

INTRODUCTION

How old are you?

Age Tick
18-30
31-40
41-50
51-60
61-70
70 and above

Gender ☐male ☐female

What is your main source of income?...................................................................................................

………………………………………………………………………………………………..

How much do you earn per month?

Income Tick
0-300USD
300-500usd
500 and above

What is the highest level of education you attained?

Education level Tick

Primary

O’ level

6
 A’level

Diploma

Under graduate

Post Graduate

None

Do you own a cell phone?…………………..☐yes ☐no

Can you access internet through it?..............................☐yes ☐no

Which service provider are you using?

Econet
Telecel
Netone
Other (specify)

Do you use mobile money?..................................☐yes ☐no

If not state the

reason……………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………

Are you willing to use your mobile phone for transactions like bill payments, money
transfer/remittance, purchase airtime, loan repayment, etc ☐yes ☐no

Do you have a bank account?..........................☐ Yes ☐ No

Does your bank provide mobile banking services?...............☐yes ☐no ☐not sure

Do you use mobile banking?..................................☐yes ☐no

6
6
If not state the
reason……………………………………………………………………………………………………
……………………………………………………………………………………………………………
……………………………………………………………………………………………………………
…………………………………………………………………………………………………………..

For the services you normally use at a bank (deposit/withdrawal, transfer money, bill pay, receive
salary or other money, buy airtime), would you be willing to use an agent or merchant rather than a
bank to access these services? ☐yes ☐no

What benefits do you see of using the mobile phones for financial
transactions?...............................................................................................................................................
....................................................................................................................................................................
....................................................................................................................................................................
....................................................................................................................................................................

What drawbacks do you see of using mobile phones for financial

transactions?...............................................................................................................................................
....................................................................................................................................................................
....................................................................................................................................................................
...................................................................................................................................................................

Do ever receive/send money using your mobile phone……………….. ☐yes ☐no

How far is your nearest mobile money agent?..........................................................

Have you ever faced any of the following problems with a mobile money agent? Tick on the relevant
space

Statement Yes No
Agent did not have enough
float for you to cash out
Agent was not present
Agent was rude

6
 Agent asked for a bribe so as to
facilitate a cash out for you

Tick on the relevant spaces provided

Statement Agree Neutral Disagree

Using mobile money is
financially not secure
I am worried about the
security of mobile
money
In my own opinion,
mobile money is easy
to use.
Overall, reliability is
the factor influencing
my use of mobile
money
Overall, matters of
privacy have an
influence on my using
mobile money
Overall, matters of
security have an
influence on my using
mobile money
I fear making a
mistake while
performing a
transaction(for
example sending
money to the wrong
recipient)

6
Which factors do you think are most important in the adoption of mobile money? Rank of the
following choices (1 - Most Important to 6 - Least Important) according to your concerns when using
mobile money services.

1 2 3 4 5 6
Security
Concern/Risky
Privacy
Reliability
Cost
Perceived
usefulness
Perceived ease
of use

Would you like to say anything concerning mobile money and mobile banking?
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THANK YOU FOR YOUR TIME