1.6 Scope of the researchThe research mainly intended to focus on the effects of mobile banking on the financialperformance of Kenya Commercial Bank Kerugoya. Questionnaires aided the data collectionprocess. Kenya Commercial Bank is among the leading commercial banks in mobile bankingusage this is evident by the introduction of KCB mobi bank and KCB Mpesa. This study focusedon Kenya Commercial Bank Kerugoya because of the geographical mobility.1.7 limitation of the studyA limitation was regarded in this study and made the researcher getting either inadequateinformation or if otherwise the response given would have been totally different from what theresearcher expected. They included Time constrain, the uptake of mobile banking is as a result ofmany factors which may not be studied, the study was limited to the effects of mobile banking onthe financial performance of commercial banks in Kirinyaga County. This was due to the limitedtime that was used by the researcher while conducting research. The researcher also had thechallenge of inadequate finances particularly during printing, internet services and for travelingto the field to collect of data about the study. However with all this limitations the researcherfaced, the researcher received a lot of support from friends, family and the supervisor whichenabled the researcher to cope with them.6
CHAPTER TWOLITERATURE REVIEW2.1 IntroductionThis chapter presents the literature review which covers the theoretical review, conceptualframework and empirical literature that was carried out to investigate the effects of mobilebanking on the financial performance of commercial banks in Kirinyaga County.2.2 Theoretical reviewThis section reviewed theories that were a guide to the study. It reviewed diffusion of innovationtheory which examines how ideas are spread among group of people. It also reviewed marketpower theory that states that increased external market forces results into market power. Thissection also reviews the efficiency structure theory which is estimated under x-efficiency andscale efficiency. X-efficiency states that when the price is lower the firms have the ability to getmore profits and such firms are likely to increase large market share because of its comparativelylower prices. Scale-efficiency emphasize on economies of scale rather than looking at theperspective of production technology or management.2.2.1 Diffusion of innovation theory (DIT)Innovation is a new idea, device or method while diffusion is the method by which a new idea ornew product is spread through certain population. The diffusion of innovation theory put forwardby Rogers in 1962 is a well-known theory that explains how an innovation is spread among usersovertime (Liu &Li, 2009). It also helps to recognize customer’s behaviour in the adoption ornon-adoption of an innovation (Vaugh and Schavione, 2010).Rogers states that diffusion is amethod by which innovation is communicated in social system to certain population over time.