ST.

MARY UNIVERSITY SCHOOL OF GRADUATE STUDIES

Challenges and Opportunities of Electronic Banking in Ethiopia Banking

Industry:
In Case of Commercial Bank of Ethiopia

BY
Dagmawit Kebede
SGS/00323/2012A

ATHESIS SUBMITTED TO St. MARY UNIVERSITY SCHOOL OF

GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MBA IN ACCOUNTING AND
FINANCE

JUNE 2021

ADDIS ABEBA , ETHIOPIA

i
 ST. MARY UNIVERSITY

SCHOOL OF GRADUATE STUDIES

THESIS TITLE

Challenges and Opportunities of Electronic Banking in Ethiopia Banking

Industry:

In Case of Commercial Bank of Ethiopia

BY

Dagmawit Kebede

APPROVED BY BOARD OF EXAMINERS:

___________________ _____________ _______________

Dean, Graduate Studies Signature Date

___________________ _____________ ______________

Advisor Signature Date

___________________ _____________ ______________

External Examiner Signature Date

___________________ _____________ ______________

Internal Examiner Signature Date

ii
 DECLARATION

I, the undersigned, declare that this thesis is my own original work and has not
been presented in any other university. All sources of materials used for this thesis
have been properly acknowledged.
Name:
Signature: ---------------------
Date: ------------------------------

This thesis has been submitted for examination with my approval as the University supervisor.

Signature: …………………………………... Date: ………………………

MR. )………………………………………..

iii
 ACKNOWLEDGEMENT
I wish to acknowledge my sincere appreciation to the following people without whom this
research work would not have been successful. It may not be possible to mention all by name but
the following were singled out for their exceptional contributions .My profound gratitude goes to
my supervisor MisrakTesfaye (Asst. Prof.), for his commitment and personal interest in the
progress of this study. His wise counsel, encouragement and constructive suggestions made this
work come to completion. My heartfelt appreciation and indebtedness also go to my families for
making my dream come true by offering me moral support during my post graduate studies.
Finally and most importantly, I wish to thank the Almighty God for bringing me this far

i
Acronyms and Abbreviations

ATM automatic teller machine

CBE commercial bank of Ethiopia

ETB Ethiopian birr

ICT Information communication technology

NBE National bank of Ethiopia

ii
Table of contents
Page

Declaration …………………………………………………………………………………….I

Acknowledgement ……………………………………………………………………………….I.I

Acronyms and Abbreviations………………………………………………………..…...…..III

Table of contents ………………………………………………………………………………IV

List of tables …………………………………………………………………………..….….. V

Abstract ……………………………………………………………………………..…….…….VI

CHAPTER ONE .....................................................................................................1

1. INTRODUCTION ..............................................................................................1
1.1. Background of the Study ..................................................................................................... 1.

1.2 Statement of the Problem ...................................................................................................... 2

1.3 Research questions .................................................................................................................3

1.4 Objective of the Study ............................................................................................................3

1.5 Significance of the Study ...................................................................................................... 3

1.6 Scope /Delimitation ................................................................................................................4

1.7Limitation of the Study ...........................................................................................................4

1.8 Organization of the Study ......................................................................................................4

CHAPTER TWO ............................................................................................ 5

LITERATURE REVIEW ................................................................................... 5
2.1 theoretical literature review ..................................................................................................... 5

2.1.1 concept and Definition of E-banking.......................................................................5

2.1. 2 Evolution of E-Banking……………………………………………………………………6

2.1.3 Types of E-banking …………………………………………………………………………7

iii
2.1.4. Benefits of Electronic Banking……………………………………………………………8

2.1.5 Challenges of Electronic Banking………………………………………….......................10

2.1.6. Opportunities of Adoption of E-Banking………………………………………………...12

2.2 History of Banking in Ethiopia……………………………………………………...13

2.3 Empirical Review…………………………………………………. …....16
2.4 Knowledge Gap .............................................................................................................. 18

CHAPTER THREE ..............................................................................................19

RESEARCH METHODOLOGY ..........................................................................19
3.1 Research Design ................................................................................................................... 19

3.2 Research Approach……………………………………………………………. ……19

3.3 Population of the Study..…………………………………………………….. 19

3.4 Sample Size determination of the Study..………………………………………………..… 19

3.5 Sample and Sampling Technique..………………………………………….…21

3.6 Data Source and Method of data Collection…………………………………….…..21

3.7 Data Analysis and Presentation……………………………………………………………..21

3.8 Validity of data………………………………………………………………………………21

3.9 Reliability of data…………………………………………………………………………...21

CHAPTER FOUR ......................................................................................... 23

DATA ANALYSIS AND INTERPRETATION ...................................................... 23
4.1 Response rate .......................................................................................... 23
4.2profile of respondents …………………………………………………………………………………………………………………….24

4.2.1profile of employees……………………………………………………………………………………………………………………..24

4.2.2 profile of customers …………………………………………………………………………………………………………………….25

4.3 descriptive analysis………………………………………………………………………………………………………………………...27

iv
4.3.1 opportunities for adoption of e-banking service……………………………….………...…27

4.4 challenges of E-banking services……………………………………………...……….……31

4.5 benefit of E-banking services………………………………………………...…………..…37

4.6 driving force of E-banking adoption…………………………………………..…………….41

CHAPTER FIVE .......................................................................................... 44

5. CONCLUSIONAND RECOMMENDATION ..................................................... 44
5.1summary ............................................................................................................................... 44

5.2 conclusion ………………………………………………………………………………………………………………………………………45

5.3 Recommendation................................................................................................................. 46

References
Appendixes

v
 List of Tables
Page
Table 4.1 Response Rate ……………………………………………………………………………... .23
Table 4.2 Profile of employees ……………………………………………………………… .24

Table 4.3 profile of customers……………………………………………………………… ..25

Tables 4.3.1 Opportunities of E-banking to bank ……………………………………..…. ..27

Tables 4.3 .2 opportunities of E-banking to customers …………………………………... ..30

Table 4.4.1 Infrastructural Challenges ………………………………………..………….... 31

Table 4.4.2 Illiteracy related challenges……………………………………………………..32

Table 4.4.3 Regulatory and legal issue challenges…………………………………………..34

Table 4.4.4 Socio-cultural related challenges ……………………………………………….36

Table 4.5.1 benefit of E-banking to customers………………………………………………37

Table 4.5.2 benefit of E-banking to banks …………………………………………………..39

Tab le 4.6 .1 driving force of E-banking adoption…………………………………………...41

vi
 Abstract
This study is conducted with Assessment of Opportunities and Challenges of E-Banking Service
in CBE. The objective of this paper to assess adoption of E-banking in the commercial bank of
Ethiopian banking services with respect to the challenges which can taking advantage of E-
banking system and expected opportunity derived by adopting the system. To acquire the
intended information the researcher use different data collection instruments like distributing
close-ended questionnaire, conducting interview. The collected data was analyzed by using
descriptive analysis such as tables and percentages. Among the different opportunity that initiate
banks to adopt e-banking services: Improving customer services, Facilitating the work to be
done fast, helping to facilitate work with minimum error, Simplifying the activity of employees of
the bank in the delivery of services to customers, Enhancing the image of the bank, improving
efficiency, reducing paper work, reduces queues in the banking hall, Increasing Revenues of the
bank, reduction of cost, and improves relationship with customers. It also investigated the major
challenges for the electronic banking services in commercial bank of Ethiopia as of
infrastructural, legal and regulatory, socio-cultural, and illiteracy related challenges. To
address various challenges identified on the study, the study suggests a series of measures which
could be taken by government as well as commercial bank of Ethiopia.

Key words: -Banking industry, E-banking, Adoption and development of E-banking technology.

vii
 CHAPTER ONE

INTRODUCTION
As an introduction of the study, this chapter presents: background of the study, statement of the
problem, research objective, research questions, research ,scope and limitation of the study,
significance of the study and organization of the whole paper respectively.
1.1. Background of the Study
Information technology is considered as the key driver forth changes to take place around the
world. For this reason, the traditional banking services are getting modernized by the use of
electronic banking. These changes are made mainly due to the developments in information and
communication technology. Due to this growth in information and communication technology,
the banking industry is entering into new phenomena of unprecedented form of competition
supported by modern information and communication infrastructure especially through the use
of internet (Shittu, 2010).
The concepts of e-banking become popular when the banking activities and information
technology are merged. When the internet facilities enter into the banking sector, the inter-bank
activities are linked through internet, the concept of “Electronic Banking or Net Banking” is also
introduced. Electronic banking enables a customer to do banking transactions through the bank‟s
website in the internet. It is more or less like bringing the bank to customer‟s computer, at the
place and time of customer‟s choice. (Devamohan, 2002). The application of this electronic
banking service has become a subject of fundamental importance and concerns to banks and
indeed a prerequisite for local and global competitiveness in the banking industry. This in turn
motivates banks to spend more on information technology so as to achieve maximum returns and
to attract large number of clients (Husni and Noor 2011).
The rapidly growing information and communication technology is knocking the front door of
every bank in the world, where Ethiopian banks would never be exceptional. Electronic Banking
has been widely used in developed countries and is rapidly expanding in developing countries. In
Ethiopia, however, cash is still the most dominant medium of exchange, and electronic payment
systems are at an evolving stage. In the face of rapid expansion of electronic payment systems
throughout the developed and the developing world, Ethiopia‟s financial sector cannot remain an
exception in expanding the use of the electronic banking system. In this context, the study will

1
attempt to trace the present status of e-banking in commercial bank of Ethiopia, visualize the
opportunities and looks at the challenges faced in providing the service.
1.2. Statement of the Problem
Electronic banking is a driving force that is changing the banking industry towards a more
competitive and efficient situation. Electronic banking presents both an opportunity and
challenge in terms of being able to provide the convenience, efficiency, and effectiveness of
electronic banking to its customers. The main driver behind electronic banking inconvenience. It
is available around the clock, is extremely time-saving, and is accessible from anywhere around
the world.
Electronic banking is very efficient, and has helped cut down a lot of costs, and in the case of
virtual banks it has cut down almost all costs (Alam,010). But the influences of electronic
banking go far beyond this. With all these benefits and opportunities that electronic banking
offers to the Ethiopian banking industry, there are a number of challenges which commercial
banks operating in the country are facing in the provision of electronic banking services. One of
the major hindrances is lack of appropriate technological infrastructure to support the service.
The financial institutions also argue with internet challenges including its congested connection,
security and quality of service (Megersa, 2010). There is also lack of specialists with the
adequate technological skills to build that infrastructure. It might also be a challenge to convince
customer, especially those who are not familiar with using the internet, and who might find it
hard to try to deal with a service that they consider confusing and frustrating.
The Ethiopian financial sector has not been studied to any great extent, from the perspective of
provision of electronic banking service (Megeras, 2010). The electronic banking service is
introduced in Ethiopia in the late 2005. Though the service has been in operation for the last
eight years, a very limited research has been conducted on the challenges and opportunities of
electronic banking in Ethiopia in general and Dashen and Nib International banks in particular.
Thus, this study attempts to fill this gap and contributes to the literature on the electronic banking
service in Ethiopia. Therefore, the main purpose of this study is investigating the challenges and
opportunities in the implementation of electronic banking in commercial bank of Ethiopia.

2
1.3 Research Questions
The study has addressed the following basic research questions:-
1. What are the major challenges for adoption of E-banking service in banking industry in
Ethiopia?
2. What are the benefits of adoption of E-banking service from viewpoint of the bank?
3. What are the driving forces toward the adoption and development of E-banking technology in
the Ethiopian banking industry?
4. What are the existing opportunities for adoption and development of E-banking technology in
Ethiopia?
1.4. Objectives of the Study
The general objective of the study is to examine the challenges and opportunities of electronic
banking in commercial bank of Ethiopia.
1.4. 1 specific Objectives of the Study
The specific objectives of the study are:-

 To explore the challenges encountered in the adoption and development of E-banking in

Ethiopian banking industry.
 To find benefits realized by the banks in the adoption of E-banking technology to
Challenges and Opportunities of Electronic Banking in Ethiopia
 To identify the driving forces towards the adoption and development of E-banking
service in Ethiopia; and
 To identify the existing opportunities for the adoption and development of E-banking
service in Ethiopia.

1.5 Significance of the Study

The findings of the study will be significant as it is expected to enhance the awareness level of
stakeholders with regard to the challenges and opportunities of implementing and using
electronic banking in Ethiopia. In this regard, the study will have a great importance in filling the
knowledge gap that exists among stakeholders. The stakeholders involved include the National
Bank of Ethiopia (NBE), commercial banks, insurances, microfinance institutions, other
concerned individuals and organizations. The research will also identify the technical and
operational challenges of electronic banking in Ethiopia and suggests ways by which they could

3
be tackled. Furthermore, the outcome of the study is expected to assist other researchers for
further studies in the area of electronic banking.

1.6. Scope of the Study

In pursuance of the objective of the study, the research paper focuses on examining the
challenges and opportunities of electronic banking in commercial bank of Ethiopia .In order to
conduct an empirical investigation in the implementation of electronic banking, the study
examined the nature of electronic banking services in commercial bank of Ethiopia.
1.7. Limitation of the Study
While conducting the study, the sample is taken only the commercial banks of Ethiopia; and
doesn‟t include the remaining commercial banks that are operating in the country. Hence the
generalizations may not be applicable to them. There was challenge that respondents were not
properly responded to the whole content of the questionnaire due to misunderstandings, lack of
knowledge, or commitment to the subject matter. However, to minimize these problems, the
researcher used interceptive interviewing technique and some of the questionnaire which are
distributed to the Bank‟s employee was selectively distributed for those individuals the
researcher believe that they have the potential, ability and capacity to respond the questioner
properly.
1.8. Organization of the Thesis
This study was organized into five chapters. The first chapter is an introductory part where
background of the study, statement of the research problem, objectives of the study, significance
of the study, scope and limitations of the study are dealt with. Chapter two dealt with reviews of
literatures. The research methodology is examined in chapter three. In the fourth chapter, the
results of the study was presented and discussed in detail. Finally, the paper ended up by drawing
conclusions and providing recommendations to promote e-banking services in commercial bank
of Ethiopia.

4
 CHAPTER TWO
LITERATURE REVIEW

The purpose of this chapter is to review the literature in the area of E-banking adoption and
development and mainly focused on the challenges, benefits, drivers and opportunities of
adopting E-banking technology. This review of literature establishes a framework, which can
guide the study.
2.1 Theoretical literature reviews
2.1.1 Concept and Definition of E-banking

E-banking has a variety of definitions all refer to the same meaning, the following section show
some of these definitions. E-banking is a form of banking service where funds are transferred
through an exchange of electronic signal between financial institutions, rather than exchange of
cash, checks, or other negotiable instruments (Kamrul 2009). The term of E-banking often refers
to online banking/Internet banking which is the use of the Internet as a remote delivery channel
for banking services. With the help of the internet, banking is no longer bound to time or
geography.
E-banking is the modern delivery channel for banking services. Banks have used electronic
channels for years to communicate and transact business with both domestic and international
corporate customers. With the development of the Internet and the World Wide Web (WWW)
the latter half of the 1990s, banks are increasingly using electronic channels for receiving
instructions and delivering their products and services to their customers. This form of banking is
generally referred to as e-banking or Internet banking, although the range of products and
services provided by banks over the electronic channel vary widely in content, capability and
sophistication. E-banking is defined as the automated delivery of new and traditional banking
products and services directly to customers through electronic, interactive communication
channels.
The definition of e-banking varies amongst researches partially because electronic banking refers
to several types of services through which bank customers can request information and carry out
most retail banking services via computer, television or mobile phone (Daniel, Mols, Sathye,
1998,1998,1999). For example, Burr (1996) describes it as an electronic connection between
bank and customer in order to prepare, manage and control financial transactions.

5
According to Singh &Malhotra (2004), E-banking can be defined as the deployment of banking
services and products over electronic and communication networks directly to customers. These
electronic and communication networks include Automated Teller Machines (ATMs), direct
dial-up connections, private and public networks, the Internet, televisions, mobile devices and
telephones. Among these technologies, the increasing penetration of personal computers,
relatively easier access to the internet and particularly the wider diffusion of mobile phones has
drawn the attention of most banks to e-banking. E-banking includes the systems that enable
financial institution customers, individuals or businesses, to access accounts, transact business,
or obtain information on financial products and services through a public or private network,
including the Internet or mobile phone.
Customers access e-banking services using an intelligent electronic device, such as a personal
computer (PC), personal digital assistant, automated teller machine (ATM), kiosk, or Touch
Tone telephone. Or „e-banking refers to the provision of retail and small value banking products
and services through electronic channels. Such products and services can include deposit-taking,
lending, account management, the provision of financial advice, electronic bill payment, and the
provision of other electronic payment products and services such as electronic money
(Sohail&Shanmugham, 2003).
2.1. 2 Evolution of E-Banking
Since the late 1990s E-Banking has developed from virtual insignificance to tens of millions of
users worldwide (OECD, 2001). However, E-Banking is the product of different generations of
electronic transactions. The current web-based internet is the latest of several generations of
systems: Automated Teller machine (ATMs), Phone Banking, PC or House Banking. Automated
teller machines (ATMs) were the first well-known machines to provide electronic access to
customers where as in phone banking, users call their bank‟s computer system on their ordinary
phone and use the phone keypad to perform banking transactions.

Electronic innovation in banking industry can be traced back to 1970, when the computerization
of financial institutions gained momentum (Malak, 2007), however; a visible presence of this
was evident to the customers since 1980, with the introduction of ATM. Innovative banking has
grown since then, aided by technological developments in the telecommunications and
information technology industry. The early decade of the 1990s witnessed the emergence of

6
automated voice response (AVR) technology. By using the AVR Technology, banks could offer
telephone banking facilities for financial services. With further advancements in technology,
banks were able to offer services, through PC owned and operated by costumers at their
convenience, through the use of intranet propriety software. The users of these services were,
however, mainly corporate customers rather than retail ones (Sohail&shanmugham, 2003). The
security first network bank was the first Internet banking in the world that was built in 1995 in
USA. After that some famous banks introduced their internet banking one after another, such as
Citibank and bank of America.
2.1.3 Types of E-banking
1 Electronic Card
Cheques and drafts have replaced the traditional payment system with money as a medium of
settlement and further development in the field has been with the advent of electronic cards. The
most commonly used electronic cards include ATM cards, Debit cards, Credit cards and Smart cards.
ATM card is a kind of plastic card, which allows a cardholder to withdraw money from his bank
account through automated teller machine. This card can be used also for other banking services like
deposit and transfer to any other account by using the ATM machine. Credit card is the modern
electronic plastic card that may be used repeatedly to borrow money or buy products and services on
credit. VISA, Master Card, American Express and Discover is commonly known and widely used
credit cards throughout the world. The decision with which card to go depends on the comparison of
the features of the specific card (not the brand). The most important features, of course, are Interest
rate and Annual fees.
Debit cards are electronic plastic cards directly tied to bank account and the amount of money the
cardholder can spend with it is limited to the amount of money he/she has in the bank. It is called
debit card because when cardholder uses a debit card, the transaction debits (withdraws) the amount
of the transaction from cardholders‟ account, usually on the same day (C.S.V Murthy, 2004).
2 Mobile Banking
Mobile banking (also known as M-banking or SMS banking) is a term used for performing
balance checks, account transactions, payments etc. via a mobile device such as a mobile phone.
Mobile banking is most often performed via SMS or the Mobile Internet but can also use special
programs called clients downloaded to the mobile device. The standard package of activities that
mobile banking covers are: mini-statements and checking of account history; alerts on account
activity or passing of set thresholds; monitoring of term deposits; access to loan statements;

7
access to card statements; mutual funds/equity statements; insurance policy management;
pension plan management; status on cheque, stop payment on cheque; ordering check books;
balance checking in the account; recent transactions; due date of payment (functionality for stop,
change and deleting of payments); PIN provision, change of PIN and reminder over the internet;
blocking of (lost/stolen) cards; domestic and international fund transfers; micro-payment
handling; mobile recharging; commercial payment processing; bill payment processing; peer to
peer payments; withdrawal at banking agent and deposit at banking agent (Rahman, 2006).
3 Internet banking
Internet banking refers to systems that enable bank customers to get access to their accounts and
general information on bank products and services through the use of banks website, without the
intervention or inconvenience of sending letters, faxes, original signatures and telephone
confirmations (Thulani et al, 2009). For those that have access to the internet and a computer all
you need to do is proceed to your banks website and login. From there you have access to all of
your accounts that you have at that bank. Transfer funds between your accounts with ease. You
can also use online banking to see how much money you have in your accounts and where the
money you have spent has gone.

2.1.4. Benefits of Electronic Banking

Electronic banking services are becoming the preferred way of making transactions in the
developed world due to the fact that they understand the benefits very well through long years of
using them in their economy (Dawd, 2004). The benefits of having electronic banking system
can be seen from different perspectives as follows.
 Benefits to Customer
E-Banking offers substantial advantage to customers in the form of convenience, time saving and
easy access to the banking services. The customers can transact in their account at anytime and
anywhere throughout the country or outside the country. There is no time and place restriction.
The customers need not visit a branch for each and every transaction and no need to wait in the
long queue. By this they can save the time. The customers can avail 24 hours a day and 7 days a
week access to banking services at anywhere. With the help of e-banking, the easy access to the
banks will be another advantage to the customers. Thus the e-banking provides sophisticated
services to the customers (Devamohan, 2002).

8
Dawd (2004) also argued that cardholders can be benefited from the safe and convenient nature
of using cards for payment. Moreover, payment cards can make life easy for people who want to
travel abroad as it minimizes the volume of cash one needs to carry and the associated risk of
theft. From merchants‟ point of view, those merchants who accept cards enable to increase their
sales as card holders prefer merchants who can accept their card for payment. Moreover, by
reducing the amount of cash on hand, merchants can manage to reduce risks as well as costs
related to cash management.
2. Benefits to Banks
The first benefits for the banks offering electronic banking services is better branding and better
responsiveness to the market. In this competitive world, E-banking helps the banks to attract
more number of customers and tackle the competition from other banks. According to Olga
(2003), those banks that would offer such services would be perceived as leaders in technology
implementation. Therefore, those banks that provide the service can enhance the customer
satisfaction through sophisticated services.
By providing secured e-Banking services, the banks can also avoid fraudulent activities.
With the help of e-banking, banks can save time and hence they can increase the number of
transactions and business (Devamohan, 2002). The other benefits of e-banking are possible to
measure in monetary terms. The main goal of every company is to maximize profits for its
owners and banks are not an exception. In this regard, automated e-banking services offer a
perfect opportunity for maximizing profits (Olga, 2003).
3. Benefits to the Economy
As e-banking provide opportunity to banking sector to enlarge their customer base, it has a
consequence to increase the volume of credit creation which in turn results in better economic
condition. The positive impacts of electronic banking are immense for economic development of
a nation. Some of the economic benefits of e-banking as identified by Dawd (2009) are as
follow:
 Reduction of the cost for printing cash notes and its related distribution
 Enhancement of Aggregate Deposit
 Banking the un-banked
 Increasing the potential for hard currency generation

9
2.1.5 Challenges of Electronic Banking
Electronic banking despite its numerous benefits, there are challenges in the implementation of
e-banking applications. Some of the identified challenges as revealed by previous research works
include security, infrastructure, regulatory and legal issues and
Socio-Cultural challenges.
1. Security
One of the biggest challenges and the basic requirements of e-banking is ensuring its security.
Securing the process in e-banking involves authenticating data of the customer and banker and
protecting the information to be transmitted from interception. This authentication can be done
using user ID and passwords. In addition a means must be provided that prevent repudiation both
by the merchant and customer once the payment process has taken place (Barnes and Hunt,
2001).
According to Worku (2010), e-banking systems must also take into account the need of
multilateral security keys i.e. security needs of all participating parties in the e-banking system.
An e-payment system that is not secured may not get trust from its users. Trust is one of the
crucial factors to ensure the acceptance of e-banking system by users.
Martina (2005) also indicated that e-banking applications represent a security challenge as they
highly depend on critical ICT systems that create vulnerabilities in financial institutions,
businesses and potentially harm customers. It is imperative for banks to understand and address
security concerns in order to leverage the potential of ICTs in delivering e-banking applications.
Software failures can also be considered as security challenges as it destroy entire portions of a
network and bring huge losses. According to Tadesse and Kidan (2005), some of the major
security challenges include the following.
Disclosure of private information
Counterfeiting
Illegal alteration of payment data

10
2. Infrastructure
The other challenge for e-payment is proper infrastructure. For the effective deployment of e-
banking, it is necessary to have a reliable and cost effective infrastructure that can be accessible
to the majority of the population.
The most common communication infrastructure for e-banking is computer network such as
Internet. Most e-banking systems use internet to communicate with their customers. The other
communication infrastructure available for e-banking users is the mobile network used for
mobile phone. Automating the banking activities is another prerequisite for e banking system.
Closed financial network that links banks and other financial institutions is necessary. This
network is usually used between banks or other financial institution for clearing and payment
confirmation Alhaji Ibrahim H. (2009).
3. Regulatory and Legal Issues
National, regional or international set of laws, rules, and other regulations are important
prerequisites for successful implementation of e-banking services. Some of the main elements
include rules on money laundering, supervision of commercial banks and e money institutions by
supervisory authorities, payment system oversight by central banks, consumer and data
protection, cooperation and competition issues (European Central Bank,
2002).
4. Socio-Cultural Challenges
Cultural and historical differences in attitudes and the use of different forms of money (e.g. use
of credit card in North America and use of debit cards in Europe) complicate the task of
developing an electronic payment system that is applicable at international level. Difference in
the degree of the required security and efficiency among peoples of different cultures and level
of development aggravates the problem (Tadesse and Kidan, 2005).
According to Kumaga (2010) consumer‟s confidence and trust in the traditional payment system
has made customers less likely to adopt new technologies. New technologies will not dominate
the market until customers are confident that their privacy will be protected and adequate
assurance of security is guaranteed. New technology also requires the test of time in order to earn
the confidence of the people, even if it is easier to use and cheaper than older methods.

11
2.1.6. Opportunities of Adoption of E-Banking
The study that was conducted in Omani banks by Al-Sabbagh, I., &Molla, A. (2004) using
exploratory research found that bank manager‟ perceptions of four concepts: perceived relative
advantage, Perceived organizational performance, perceived customer/organizational
relationship and perceived ease of use provided a broader understanding of e-banking adoption
in the banking industry.
The first construct: Perceived Relative Advantage construct relates to the degree to which bank
managers think that Internet technology might help their bank gain advantages in the industry.
From the literature, three major issues emerged relating to the perception of relative advantage:
convenience of services; innovative use of IT; and management of banking services Al-Sabbagh,
I., &Molla, A. (2004).
The second construct: Perceived Organizational Performance is associated with how much a
bank manager thinks Internet technology could improve their organizational performance. Three
issues: profitability; market environment and employee productivity were utilized to explore this
construct in depth. From the broad question related to profitability, two impediments are
indicated: high technology investment cost and the need for economies of scale for Internet
technology use are inhibiting the rate of E-banking adoption. Productivity of employees was
another issue of interest. Most respondents expected that their business efficiency could be
improved on the Internet Al-Sabbagh, I., &Molla, A. (2004).
The third construct: Perceived Customer/Organizational Relationship relates to how a bank
manager perceives Internet technology adoption in terms of improving the relationship with their
customers. In the literature, three major issues emerge related to the perception of
customer/organizational relationship: customer trust, customer commitment, and customer
satisfaction Al-Sabbagh, I., &Molla, A. (2004).
The final construct: Perceived Ease of Use measures how easy a bank manager believes that
Internet technology is to use. The literature suggests that if technology is perceived to be easy
use then the rate of adoption will increase. The research threw up three major issues related to
perceived ease of use: easy to navigate, easy to learn and easy to manage. The last issue related
to management of financial transactions on the Internet Al-Sabbagh, I., &Molla, A. (2004).
In general, Review of Empirical studies shows that understanding the practice of E-banking in
Ethiopia, Africa and in the other worlds. The study mostly deals about the opportunities and

12
challenges of E-banking practice. Some studies are also deals about the critical success factors in
E-banking is important for banking industries because it would potentially help them improve
their strategic planning process. The main obstacles and barriers that oppose E-banking practice
are the concerns of security, privacy of information and technology investment cost. Also the
literature review indicates that according to the customers there are different factors that
influencing the practice of E-banking such as, perceived advantages and other factors related to
the services itself & how to be accepted and used by the customers, which differ from country to
country, reflecting the economic and technological development in each country. This study will
generally tried to assess the general practice, benefits of e-banking for the banks, customers and
general economy. Problems related with the implementation of E-banking and also the practice
of E-banking by customers. And also try to assess the possible intervention by the government
that will promote the development of this service Ram and Sheth (1989).
2.2 History of Banking in Ethiopia
2.2.1. The Early Banking Era in Ethiopia
The history of banking in Ethiopia dates back to the beginning of 20 th century. The agreement
that was reached in 1905 between emperor Menilik II and Mr. McGillivray, representative of the
British owned National Bank of Egypt marked the introduction of modern banking in Ethiopia
(Charles, ND). Following this agreement, the first bank called “Bank of Abyssinia” inaugurated
on February 16, 1906 by the emperor. Bank of Abyssinia was totally a foreign owned private
bank whose share was sold in Addis Ababa, New York, Berlin, Paris, Rome, London, Cairo and
Vienna to raise the agreed capital of £500,000 Pound sterling. Within the first 15 years of
operation Bank of Abyssinia opened a branch in different parts of the country, in this regard;
Harar branch was opened at the same time with inauguration of the Bank at Addis Ababa. Two
years later another branch at Dire-Dawa, Gore, Dessie and transition office in Djibouti in 1920
was opened (Megersa, 2010). The governor was McGillivray and latter succeeded by H.Guldie,
Miles and C.S. Collier were in charge from 1919 until the liquidation of the Bank in 1931. Since
societies at that time were new for banking services, the journey of Bank of Abyssinia was costly
and profit was recorded only in 1914, 1919, 1920 and from 1924 onwards.
2.2.2. The Imperial Regime
Emperor Hailesilassie, the new Emperor in 1930 continued the Menilik‟s policy aiming at
independence, modernization and progress of the country. Haileselassie being the board of

13
directors of the Bank of Abyssinia, strongly gave priority to the reform of the Ethiopian
monetary and banking system due to the fact that, the only issuing bank operating in the country
was owned and controlled by foreigners (Megersa, 2010). The Imperial ruling issued on August
29, 1931 and chartered the new bank as Bank of Ethiopia and also represented the first banking
law ever passed in the country. Following this, the Bank of Ethiopia started operation in
November 1931 with the same governor (C.S.Collier) premises of the ceased Bank of Abyssinia.

Bank of Ethiopia was purely Ethiopian institution and was the first indigenous Bank in Africa.
Bank of Ethiopia with branch in Harar, Dire-Dawa, Gore, Dessie, Debre Tabor and agency
offices in Gambella, Gimbi and transit office in Djibouti continued successfully until the Italian
invasion in 1935. During the invasion, the Italians established the branch of their main Banks,
such as Bancad‟Italia, Banco Di Roma, Banco Di Napoli, and BancaNationale Del Lavorno and
started operation in the main towns of Ethiopia. But they ceased operation immediately when
Italian abolished except Banco di Roma and Banco Di Napoli which remained in Asmera.
Another foreign Bank, Barclay Bank, came to Ethiopia with the British troops and organized
Banking services in Addis Ababa until its withdrawal in 1943 (Megersa, 2010).
By April 15, 1943 the State Bank of Ethiopia commenced operation after eight months
preparation. It acted as central and commercial bank, until the law of 1963 that came into force,
separating the function of central and commercial bank which lead to the creation of National
Bank of Ethiopia and Commercial Bank of Ethiopia. This Law also permitted foreign bank
operation domestically limiting their share holding only to 49%. Both National Bank of Ethiopia
and Commercial Bank of Ethiopia started operation in January 1964. The first private bank,
Addis Ababa Bank S.C was established on Ethiopian initiative and started operation in 1964.
There was also financial institution operating in the country like, the Imperial Saving and Home
Ownership Public Association (ISHOPA) which was a Mortgage Bank (Muvva and Sisay, 2011).
There was also a Saving and MortgageCorporation of Ethiopia, whose aim and duties was to
accept saving and trust deposit and provide agricultural loan which was replaced by Investment
Bank of Ethiopia, and then hanged to Investment Corporation Share Company, then industrial
and finally by 1970 established the Agricultural and Development Share Company.

14
2.2.3. The DergueRegim
Following the declaration of socialism in 1974, the government extended its control over the
whole economy and nationalized all corporations. The three Private Banks, Addis Ababa Bank
S.C, Roma and Napoli merged after nationalization in 1976 to form the second largest Bank
called Addis Bank. By August 2, 1980 Addis Bank and Commercial Bank of Ethiopia merged to
form the sole commercial bank in the country, Commercial Bank of Ethiopia (CBE). The Saving
and Mortgage Corporation S.C and Imperial Savings and Home Ownership Public Association
also merged to form the Housing and Saving Bank with a working capital of Birr 6 million. By
1979, Agricultural and Industrial Bank under the umbrella of National Bank of Ethiopia named
as Agricultural and Industrial Development Bank (AIDB) was established (Megersa, 2010). In
the country National Bank of Ethiopia (NBE), Commercial Bank of Ethiopia (CBE) and
Agricultural and Industrial Development Bank (AIDB) were the only financial institutions
enjoying monopoly in their respective areas of operation.
2.2.4. The EPRDF Regime
Following the economic policy change in 1991, financial sector reform has also taken place. The
Monetary and Banking proclamation No. 83/1994 and the licensing and supervision of banking
business No. 84/1994 laid down the legal basis for investment in the banking sector.
Consequently, after the proclamation, Awash International Bank the first private bank was
established in 1994, then Dashen Bank, Bank of Abyssinia, Wegagen Bank, United Bank and
Nib International Bank were established from 1994 to 1999 which forms a group of six private
banks as the first batch of private banks establishment period (Charles, ND).
As a second batch, another eight private banks were also established from 2005 to 2011 six years
after of the first batch establishment which encompass Cooperative Bank of Oromia, Lion
International Bank, Zemen Bank, Oromia International Bank, Buna International Bank, Berhan
International Bank, Abay Bank and Addis International Bank ,according to their respective order
of establishment period. Currently, there are three state owned banks (Commercial Bank of
Ethiopia, Development Bank of Ethiopia and Construction and Business Bank) and sixteen (16)
private commercial banks operating in the country.

15
2.3 Empirical Review
2.3.1International study
According to MM Mahman (2008) in Bangladesh despite huge demand from the business
community as well as the retail customers particularly the urban customers, electronic banking
(e-banking) is still at a budding state due mainly to a number of constraints such as unavailability
of a backbone network connecting the whole country; inadequacy of reliable and secure
information infrastructure especially telecommunication infrastructure; sluggish ICT penetration
in banking sector; insufficient legal and regulatory support for adopting e-banking and so on.
The concept of e-banking includes all types of banking activities performed through electronic
networks. It is the most recent delivery channel of banking services, which is used for both
business-to-business and business-to-customer transactions.
However, in true sense, e-banking includes activities like payment of bills and invoices, transfer
of funds between accounts, applying for a loan, payment of loan installments, sending funds to
third parties via emails or internet connections regardless of where the client is located. Leow,
Hock Bee (1999) state that the terms PC banking, online banking, Internet banking, telephone
banking or mobile banking refers to a number of ways in which customer can access their banks
without having to be physically present at the bank branch. Therefore, e-banking covers all these
ways of banking business electronically. Since e-banking offers some smart services benefiting
both banks and customers compared with traditional banking system, it has become imperative to
make necessary room for banks to flourish e- banking. Among others, attractiveness of e-
banking includes: it lowers transaction cost; provide 24- hour services; ensure increased security
and control over transactions; reduces fraud risk; performs higher volume of transactions with
less time; increases number and volume of value payment through banks; allows remote
transactions facilities that replace physical presence of a customer in a bank branch and;
increases transaction speed and accuracy. On the other hand, traditional banking is time-
consuming and more costly and therefore, e-banking is replacing traditional banking all over the
world.
In addition, an exploratory study that was conducted in Zimbabwe by ChituraTofara (2008)
indicated that incompatibility with the existing system, cost of implementation, security
concerns, lack of expertise, inadequate legislation and consumer acceptance are the major
challenges for the adoption of e-banking in the country‟s banking industry.

16
Kaleem and Ahmad (2008) argued that in undertaken E-banking transactions, customers are
always concerned about hackers and anti-social elements. Hacking enables the unethical hackers
to penetrate the accounts of online bankers and spend their money. Availability of confidential
information which is just secured by a username and password makes it vulnerable to such
threats. Most of the banks try to make their sites secured by implementing latest network security
software. Learn to keep your cards, documents and passwords safe, and monitor your accounts to
safeguard yourself from bank fraud committed through identity theft.
E-bankers should install virus scanners and keep them and their systems up-to- date especially
PC banking. They should avoid practices that easily lead to security hazards in particular they
should not start up arbitrary executable attachments received via electronic e-mail. Users should
check fingerprints of certificates against the fingerprints that are (should be) given by the bank
on official paper documents (Claessens et al., 2002; BSP, 2006).
2.3.2 Local studies
Ethiopia has not yet enacted legislation that deals with E-commerce concerns including
enforceability of the validity of electronic contracts, digital signatures and intellectual copyright
and restrict the use of encryption technologies and High rates of illiteracy. Low literacy rate is a
serious impediment for the adoption of E-banking in Ethiopia as it hinders the accessibility of
banking services. For citizens to fully enjoy the benefits of E-banking, they should not only
know how to read and write but also possess basic ICT literacy (Gardachew 2010). But risks
related with security issue, lack of competition among local & foreign banks and social
awareness on the E-banking system were not addressed.
Gardachew (2010) conducted research on the opportunities and challenges of E-banking in
Ethiopia. The aim of his study was focused on analyzing the status of electronic banking in
Ethiopia and investigates the main challenges and opportunities of implementing E-banking
system. The author conducted a survey on the existing operating style of banks and identifies
some challenges of using E-banking system, such as, lack of suitable legal and regulatory frame
works for E-commerce and E- payments, political instability in neighboring countries, high rates
of illiteracy and absence of financial networks that links different banks. According to
Gardachew (2010), Opportunities offered by ICT through e-learning programs and Commitment
of the governments on development of ICT infrastructures is considered as drivers of using
Ecommerce and E-payment systems.

17
2.4 Knowledge Gap
Much documentation on E-banking services has been carried out elsewhere. However, in
developing countries like Ethiopian, there is little evidence concerning E-banking. As far as E-
banking is concerned, a lot of researches on internet banking, mobile banking and modern
service delivery channels have been done in different countries in the world. As per the
knowledge of the researcher only a very limited number of researches have been done on E-
banking in Ethiopian Banking like that of (Ayana, 2012), (Gardachew,2010) and(Wondwossen
and Tsegai, 2005). Therefore, more studies are still required to assess challenges and opportunity
of E-banking in the country to identify areas in which the country lags behind their E-banking
adoption and diffusion. The previous studies focused on factors influencing adoption of E-
banking technology. This study focused on different factors affecting not only adoption but also
development of E-banking technology in Ethiopian Banking industry. Secondly, this study also
conducted following almost all type of E-banking products is being provided by almost all
commercial banks in Ethiopia. This study is, therefore, intending to fill the gap by describing the
challenges and opportunities of Ethiopian commercial banks in adopting and developing E-
banking technology.

18
 CHAPTER THREE

RESEARCH METHODOLOGY
Designing appropriate research methodology is a prerequisite in order to conduct a good
research work. Accordingly, this chapter discusses about the methodology by which the
researcher was uses to conduct this study. Thus, research design, sampling, data source and
method of collection and method of data analysis, research is presented below respectively.

3.1 Research Design

Descriptive cross sectional research design was adopted for this study. According to Cooper and
Schindler (2003), a descriptive study is concerned with finding out the what, where and how of a
phenomenon. Descriptive research design was chosen because it enabled the researcher to
generalize the findings to a larger population.

3.2 Research Approach

In order to attain the objective of the study and answer the research questions, the researcher
adopted mixed research approach. The rationale of using a mixed approach is to gather data that
could not be obtained by adopting a single method (Creswell, 2003). Hence, the basis of such
approach helps to neutralize the limitations of applying a single approach in connection with the
qualitative and quantitative nature of the research questions.

3.3 Population of the Study

The population for this study was grouped and categorized based on the type of user‟s and
service providers. Based on this, the study has three level strata which include:
 Commercial Banks (Service providers)
 Shops, Supermarkets, hotels, gas stations (User firms)
 Individual users.

3.4 Sample Size determination of the Study

In conducting research usually required specifying sample size if the population is very large.
This is due to the fact that addressing total population is difficult for many reasons such as time
limitation, budget constraints and transportation. So for this study the researcher used 83samples

19
from the total population of 474.And the researcher use Yamane‟s formula to determine the
sample size.

Where N= population size or total population

e= level of confidence error

n= number of sampling size

Where:

` .

Type of strata Number of n*number of Sample from each

participant participant / strata
population size

Commercial Banks 157 83*157/474 27

(Service providers

Individual users 150 83*150/474 26

Shops, 55 83*55/474 10

Supermarkets 57 83*57/474 10

, hotels 55 83*55/474 10

Total 474 83 83

20
Therefore the sample size of this study was 83 that are taken by using proportionate stratified
sampling technique from all strata.

3.5 Sample and Sampling Technique

Stratified sampling was adopted so as to give each item in the population an equal probability of
being selected. The sample was selected from the target population of 474 possible respondents
by taking a proportionate ratio of the target population in each stratum. Therefore the sample size
of this study was 83 respondents.

3.6 Data Source and Method of data Collection

For the purpose of this research, and in order to achieve the objectives of the study both primary
and secondary sources of data was employed. Secondary data was collected from different
websites, annual reports of banks, case studies, journal articles, magazines and different books
that are reviewed in the area of e-banking.
Primary data was collected from bank employees, owners/operators of business entities,(shop,
supermarkets ,hotels and individual users ., National Bank of Ethiopia and Ministry of Finance
and Economic Development. The researcher collected the primary data in two ways- that was
through personally administered questionnaire and interview methods

3.7 Data Analysis and Presentation

The questionnaire responses were first grouped into various categories. Inferential statistics was
employed to analyze the data used in the study. The analyzed data was presented infrequency
distributions tables, percentage and word statements for ease of understanding and analysis of the
data.

3.8 Validity of data

Validity refers to the accuracy of an assessment, the ability of scale or measuring instrument to
measure what it intended to measure. It allows the researcher to determine of the item on an
assessment target their goal or not.

21
Content validity was achieved by ensuring the presence of relationship between the questionnaire
and the research objective. Content validity was achieved by ensuring the relevance, clarity and
objectivity of questions.

3.9 Reliability of data

Reliability refers to the degree that indicate of the dimension is free from accidental errors and
offers constant data, there yielding consistent result.

Regarding reliability of instruments, the research was made sure the reliability by pre-testing the
questionnaire to staffs at Ethiopian commercial bank. The researcher had given questionnaires to
some group of respondents and re-testing was done.

22
 CHAPTER FOUR

DATA ANALYSIS AND INTERPRETATION

The general objective of the study is to examine the challenges and opportunities of electronic
banking in commercial bank of Ethiopia. This chapter deals with the result, discussion or data
presentation analysis and interpretation of data collected. This analysis tried to assess the
challenges and opportunities of electronic banking in commercial bank of Ethiopia. The analysis
of the study has conducted based on unstructured interview with concerned person in
organization and self-administered questionnaires distributed to employees and customers and 83
questionnaires were distributed. But of this 75 (90%) were collected and the rests 8(10%) of
questionnaires were not returned because of respondents different factors like unwillingness,
time shortage and other factors.
Table 4.1 Response Rate
Description Questionnair Frequency Percentage (%)
es

Data collected Returned 75 90%

from employees
Unreturned 8 10%
and customers

Total 83 100%

Sources: survey, 2021

As table 4.1 shows that the total numbers of the participants were 83 employees and customers
of the commercial bank of Ethiopia ;but out of 83 participants only 75 (90%) of them returned
the questionnaires to the researcher and the rests 8(10%) the questionnaire were not returned
because of respondents different factors like unwillingness, time shortage and other factors

23
4.2 Profile of Respondents

Table 4.2 profile of employees

NO Item Variable Frequency Percentage

1 Sex Male 21 60%

Female 14 40%

Total 35 100%

2 Age 18-25 12 35%

Yrs

26-36 16 45%
Yrs

37-47 7 20%
Yrs

>48 Yrs 0 -

Total 35 100%

3 Education Diploma 0 0%
level
Degree 24 66.67%

Master 9 26.67%

PHD 2 6.66%

Total 35 100%
4 Work 0-2 years 9 26.67%
experience
3-5 14 40%
6-10 7 20%
>10 5 13.33%
Total 35 100%
Sources: survey, 2021

24
The above table 4.2 indicates that 60% (21) of respondents are male and the rest 40% (14) of
them are female. This shows that the participation of females is less than males in Ethiopian
commercial bank .

In the case of classification of respondents by age of respondents 35% (12) of the total
population is found in age between 18-25 Years, and followed by those respondents which are
found between 26-36 years, constituting around 45% (16) of the total respondents and 20% (7)
are the respondents found in age between 37-47 years. Finally, there are no respondents whose
age is above 48 years. From this analysis the researcher understood commercial bank of Ethiopia
have average of productive forces which is positively affecting their organizational performance.

With regard to the educational qualification 24(66.67% ) of respondents were degree holders )
,9(26.67%)of respondents were master holders and 2(6.66%)of them were philosophical
doctorate(PHD) holders . this implies that the majority educational status of CBE‟s employees
is first degree holders. and the second majority educational level is second degree (master
holders ) and the least educational level of CBEs employees is PHD level. In relation to work
experience of employees, the table shows that 26.67% respondents are below 2 years‟
experience; 40% of respondents the employees have an experience of between 3-5years; 20%
respondents of the employees have an experience between 6-10 years, and the remaining
respondents representing 13.33% of the employees has an experience of above 10 years ]

25
 Table 4.3 profile of customers

NO Item Variable Frequency Percentage

1 Sex Male 24 60%

Female 16 40%

Total 40 100%

2 Age 18-25 5 12.5%

Yrs

26-36 13 32.5%
Yrs

37-47 15 37.5%
Yrs

>48 Yrs 7 17.5%

Total 40 100%

3 Education Diploma 18 45%

level
Degree 22 55%

Master 0 0%

PHD 0 0%

Total 40 100%
4 Work 0-2 years 20 50%
experience
3-5 15 37.5%
6-10 5 12.5%
>10 0 %
Total 40 100%
Sources: survey, 2021

The above table 4.2.2 indicates that 60% (24) of respondents are male and the rest 40% (16) of
them are female. This shows that the participation of male customers are is greater than females
customers in Ethiopian commercial bank .

26
Regard to age classification of the respondents about 5(12.5%) them are aged 18-25 years
,13(32.5%) of the respondents are found 26-36 years ,about 15(37.5%) of the respondents are
between 37-47 years and the rest 7(17.5%) of the respondents are aged greater than 48 years
.This indicates that the majority of CBE,s customers are more adult comparing to other age
group customers .

When we see the educational background of the customers about 18(45%) of the respondents are
diploma holders and about 22(55%) of the respondents are degree holders. this implies that the
majority customers of commercial bank have moderate educational background.

In relation to work experience of customers, the table 4.2.2 shows that 50% respondents are
below 2 years‟ experience; 37.5% of respondents the customers have an experience of between
3-5years; 12.5% respondents of the employees have an experience between 6-10 years, and there
is no respondent who has work experience above 10 years.

4.3 Descriptive Analysis

In this part the responses of the respondents for the variables indicated below were measured on
five point Liker scale with: 1= strongly disagree, 2= disagree, 3 = neutral, 4= agree and 5=
strongly agree. Apart from frequency and percentage, the descriptive statistics which are in the
form of mean and standard deviation were presented . However, while making interpretation
of the results of mean the scales were reassigned as follows to make the interpretation easy and
clear.
With 5 point scales, the interval for breaking the range in measuring each variable is calculated
by 5−1/5= 0.8. It means items with scores that fall between the ranges of: 4.21 – 5.00 are
considered as strongly agreed; 3.4 – 4.20 as agreed: 2.61 – 3.39 as Neutral; 1.81 – 2.6 as disagree
and 1.00 – 1.8 strongly disagree. This formula is adapted from (Vichea, 2005).

27
 4.3.1 Opportunities for adoption of e-banking service

Tables 4.3.1 Opportunities of E-banking to bank

Item SA A N DA SD

Freq % Freq % Freq % `Freq % Freq % Mean SD

Reduce 40 53.33% 30 40% 5 6.67% 0 0% 4.4000 .80539

queues in the
banking hall

Reduces 45 60% 30 40% 0 0% 0 0% 0 0% 4.6000 .49320

paper work

Increases the 30 40% 25 33.33% 5 6.67% 15 20% 0 0% 3.9333 1.13105

productivity
of the bank

Helps to 55 73.33% 20 26.67% 0 0% 0 0% 0 0% 4.7333 .44519

perform
transaction
at lower cost

Increase 50 66.67% 25 33.33% 0 0% 0 0% 0 0% 4.6667 .47458

Revenues of
the bank

Enhance the 45 60% 30 40% 0 0% 0 0% 0 0% 4.6000 .49320

image of the
bank

Increase 60 80% 15 20% 0 0% 0 0% 0 0% 4.8000 .40269

efficiency of
the bank.

E-banking 47 62.67% 28 37.33% 0 0% 0 0% 0 0% 4.6267 .48695

enables 24
hour
accessibility

28
to the bank
service

Enables the 51 68% 24 32% 0 0% 0 0% 0 0% 4.6800 .46962

bank to
expand its
service
provision
easy

Improves 57 76% 18 24% 0 0% 0 0% 0 0% 4.7600 .42996

relationship
with
customers

Reduce 48 64% 27 36% 0 0% 0 0% 0 0% 4.6400 .48323

queues in the
banking hall

Sources: survey, 2021

The above table 4.3.1 showed that the results of the items fall in the strongly agreed range. The
items which ask for respondents whether e-banking Reduce queues in the banking hall (mean
4.4000 and SD.80539 ), whether e-banking Reduces paper work (mean 4.6000and SD.49320),
whether e-banking Increases the productivity(mean 3.9333 and 1.13105), whether e-banking
Helps to perform transaction at lower cost(mean 4.7333and SD.44519 ), whether e-banking
Increase Revenues of the bank (mean 4.6667 and SD.47458), whether e-banking Enhance the
image of the bank(mean 4.6000and SD.49320), whether e-banking Increase efficiency of the
bank(mean 4.8000 and.40269), whether E-banking enables 24 hour accessibility to the bank
service (mean 4.6267 and SD.48695 ), whether e-banking Enables the bank to expand its service
provision easy (mean 4.6800 and SD.46962) whether e-banking Improves relationship with
customers (4.7600 and 42996), whether e-banking Reduce queues in the banking hall (mean
4.6400and SD.48323).The result implies that adopting of e-banking has many opportunities to
banks as the factors listed above .

29
Tables 4.3 .2 opportunities of E-banking to customers

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

40 53.33% 30 40% 0 0% 5 6.67% 0 0% 4.4000 .80539

E-banking
enables 24-
houraccessibility
to the bank
service

37 49.33% 38 50.67% 0 0% 0 0% 0 0% 4.4933 .50332

E-banking
enables
customers to use
bank services
conveniently

E-banking 42 56% 33 44% 0 0% 0 0% 0 0% 4.5600 .49973

system saves
time of
customers
35 46.67% 25 33.33% 0 0% 15 20% 0 0% 4.0667 1.13105
E-banking
services enable
users to
complete.
banking
activities more

30
easily

E-banking 25 33.33% 30 40% 0 0% 20 26.67% 0 0% 3.8000 1.17404

service increase
customer
satisfaction
Sources: survey, 2021

The above table 4.3.2 showed that the results of the items fall in the strongly agreed and agree
range. The items which ask for respondents whether E-banking enables 24-houraccessibility to
the bank service (mean 4.4000 and SD.80539 ), whether e-banking enables customers to use bank
services conveniently (mean4.4933 and SD.50332), whether e-banking system saves time of
customers (mean 4.5600 and SD.49973), whether e-banking services enable users to complete
banking activities more (mean 4.0667 and SD1.13105 ), whether E-banking service increase
customer satisfaction (mean 3.8000 and SD1.17404),

Based on shown in the above table 4.3.2 the results from all respondents indicates e-banking
services enables the customers to access for 24 hours services ,e-banking enables the customers
to save their times ,to make easy their banking transaction, and e-banking also increase the
customers satisfactions . In general the majority respondents are agree for the above listed factors
.so we can conclude that e-banking service has multiple benefits and opportunities for the
customers.

31
4.4 challenges of E-banking services

Table 4.4.1 Infrastructural Challenges

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

Frequent power 29 38.67% 30 40% 0 0% 16 21.33% 0 0% 1.17404 1.12

interruption

Low level of 34 45.33% 26 34.67% 0 0% 15 20% 0 0%% 4.0533 1.12

internet
penetration

Poorly developed 39 52% 36 48% 0 0% 0 0% 0 0 4.5200 .50

telecommunication
infrastructure

Brocken and slow 45 60% 30 40% 0 0% 0 0% 0 0% 4.6000 .49

internet
connection
Limitation in ICT 40 53.33 25 33.33 0 0% 10 0% 0 0% 4.2667 1.00
infrastructure

Sources: survey, 2021

As the table 4.4.1shown that Frequent power interruption(mean3.9600 SD 1.12033) , Low level of
internet penetration(mean4.0533 and SD1.12578), Poorly developed telecommunication
infrastructure(4.5200and SD .50296,) Brocken and slow internet connection (mean 4.6000 and

SD.49320 )and Limitation in ICT infrastructure(mean4.2667 and SD 1.00449 ), the result implies that the
above listed factors affect the smooth practice of E-banking services respectively, largest number of

32
respondents agreed that Low level of internet penetration and poorly developed infrastructure
affect the practice of E-banking services.

This implies that ICT infrastructure in Ethiopia for internet access is not sufficient to use E-
banking service. Therefore, one of the major obstacle factor identified in this study is lack of ICT
infrastructure, to use E-banking service, such as internet banking, mobile banking, ATM and
others

4.4.2 Illiteracy related challenges

Table 4.4.2 Illiteracy related challenges

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

Lack of 31 41.33% 29 38.67% 0 0% 15 20% 0 0% 4.0133 1.10885

educated and
efficient staff in
e-banking
context

Lack of 33 44% 42 56% 0 0% 0 0% 0 0% 4.4400 .49973

customer
awareness with
E-banking
product
Customers 44 58.67% 31 41.33% 0 0% 0 0% 0 0% 4.5867 .49575
disability to
access e-
banking
services

33
Customer low 33 % 42 % 0 % 0 % 0 % 4.4400 .49973
levels of
computer
literacy
Lack of demand 30 40% 30 40% 0 % 15 20% 0 % 4.0000 1.10282
from customer‟s
side
Sources: survey, 2021

As shown on the table 4.4.2. majority of respondents are agree and strongly agree with the above
listed illiteracy related challenges but there is a little bit lack of educated and efficient staff in e-
banking context, lack of customer awareness with E-banking product, customer low levels of
computer literacy, Lack of demand from the customer‟s side and customer‟s disability to access
e-banking services is the major illiteracy related challenges that hinders adoption of e-banking
services in commercial bank of Ethiopia.

4.4.3 Regulatory and legal issue challenges

Table 4.4.3 Regulatory and legal issue challenges

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

Lack of 32 42.67% 33 44% 0 0% 10 13.33% 0 0% 4.1600 .97315

suitable legal
and regulatory
framework for
E-banking.

34
Lack of law 25 33.33% 25 33.33% 0 0% 25 33.33% 0% 0% 3.6667 1.25562
mandating the
bank to adopt
E-banking
technology

Cross-country 30 40% 25 33.33% 0 0% 20 26.67% 0 0% 3.8667 1.21180

legal and
regulatory
differences

Lack of 45 60% 30 40% 0 0% 0 0% 0 0% 4.6000 .49320

sufficient
government
support
affects
customers‟
willingness

Sources: survey, 2021

As shown on the table 4.4.3. majority of respondents are strongly agree and agree on Lack of
suitable legal and regulatory framework for E-banking ,cross-country legal and regulatory
differences and Lack of sufficient government support to enhance customers‟ willingness
considered as regulatory and legal issue related challenges that faces commercial bank of
Ethiopia . On the other side the respondents said good law mandating the bank to adopt e
banking technology. Based on the above table 4.7.3 we conclude electronic payments are not
currently covered in Ethiopian legal system. Lack of such legal framework may thus hinder the
introduction of cost effective modern electronic payment instrument such as ATMs, credit and
debit cards, mobile/telephone/internet banking.

35
4.4.4 Socio-cultural related challenges

Table 4.4.4 Socio-cultural related challenges

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

Level of 28 37.33% 25 33.33% 0 0% 22 29.34% 0 0% 3.7867 1.23347

development
of the society

37 49.33% 23 30.67% 0 0% 15 20% 0 0% 4.0933 1.14104

Consumer‟s
confidence
and trust in
the traditional
payment
system

Cultural and 43 57.33% 27 36% 0 0% 5 6.67% 0 0% 4.4400 .80940

historical
differences in
attitudes
Resistance to
changes

25 33.33% 35 46.67% 0 0% 15 20% 0 0% 3.9333 1.06965

Difference in
efficiency

36
among
peoples of
different
cultures

Sources: survey, 2021

The result of the table 4.4 .4 implies that e-banking services are challenged by socio-cultural
related problems as of level of development of society, customers trust in the traditional banking
system and resistance to change. The respondents of focused group discussion also agreed that
the customers have a confidence in the traditional banking system, this confidence results not to
use even if, not to think to use new- e-banking products. These challenges are created as a result
of low level of awareness in the society, low level of urbanization rate and high illiteracy rate of
the society.
Since most of the societies are cash based society, they do not give value for electronic money to
made different transaction like paper or coin money. On the bases of this concept the respondents
were asked whether such culture affect the customers to use E banking practice easily.

4.5 benefit of E-banking services

Table 4.5.1 benefit of E-banking to customers

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

E-Banking 46 61.33% 29 38.67% 0 0% 0 0% 0 0% 4.6133 .49027

offers
substantial
advantage to
customers in
the form of

37
time saving.

50 66.67% 25 33.33% 0 0% 0 0% 0 0% 4.6667 .47458

The customers
can transact in
their account
at anytime and
anywhere
throughout the
country or
outside the
country.

There is no 47 62.67% 28 37.33% 0 0% 0 0% 0 0% 4.6267 .48695

time and place
restriction.

55 73.33% 20 26.67% 0 0% 0 0% 0 0% 4.7333 .44519

The customers
can avail 24
hours a day
and 7 days a
week access to
banking
services at
anywhere.

payment cards 30 40% 25 33.33 0 0% 20 26.67% 0 0% 3.8667 1.21180

can make life
easy for
people who

38
 want to travel
abroad as it
minimizes the
volume of
cash one
needs to carry
and the
associated risk
of thief
Sources: survey, 2021

Table 4.5.1 indicates that the majority of respondents are strongly agree and agree that E-
Banking offers substantial advantage to customers in the form of time saving; The customers can
transact in their account at anytime and anywhere throughout the country or outside the country;
There is no time and place restriction; The customers can avail 24 hours a day and 7 days a week
access to banking services at anywhere. Payment cards can make life easy for people who want
to travel abroad as it minimizes the volume of cash one needs to carry and the associated risk of
thief.
4.5.2 Benefit of E-banking to banks

Table 4.5.2 benefit of E-banking to banks

Item SA A N DA SD

Freq % Freq % Freq % Freq % Freq % Me SD

an

30 40% 23 30.67 0 0% 22 29. 0 0% 3.8 1.24871

13
better branding % 33 3
to the market. %

39
 25 33.33 35 46.67 0 0% 15 20 0 0% 3.9 1.06965
33
% % % 3
E-banking helps
the banks to
attract more
number of
customers and
tackle the
competition from
other banks
53 70.67 22 29.33 0 0% 0 0% 0 0% 4.7 .45836
06
With the help of % % 7
e-banking, banks
can save time
and hence they
can increase the
number of
transactions and
business

24 32% 26 34.67 0 0% 25 33. 0 0% 3.6 1.24654

53
automated e- % 33 3
banking services %
offer a perfect
opportunity for
maximizing
profits

Sources: survey, 2021

According to table 4.5.2 about 40% and 30.67% strongly agree and agree respectively e-
banking make better branding to the bank and about 29.33% disagree to the indicated factor.
Most of the respondents are agree that E-banking helps the banks to attract more number of
customers and tackle the competition from other banks; with the help of e-banking, banks can
save time and hence they can increase the number of transactions and business; automated e-
banking services offer a perfect opportunity for maximizing profits.

40
4.6 driving force of E-banking adoption

Tab le 4.6 .1 driving force of E-banking adoption

Item SA A N DA SD Mean SD

Freq % Freq % Freq % Freq % Freq %

downsizing, 33 44% 30 40% 0 0% 12 16% 0 0% 4.1200 1.03923

gaining
competitive
advantage,
Increasing 40 53.33% 22 29.33% 0 0% 13 17.33% 0 0% 4.1867 1.09906
market share

improving 39 52% 31 41.33% 0 0% 5 6.67% 0 0% 4.3867 .80360

bank‟s image

45 60% 30 40% 0 0% 0 0% 0 0% 4.6000 .49320

the
government
support is a
strong driver
fore-banking
adoption
Sources: survey, 2021

As indicated in the table 4.6.1 above, about 44% and 40% of the respondents are strongly agree
and agree that gaining competitive advantage is one of the driving force of –banking adoption
and about 16% of the respondents are disagree about this factor .in general most of the

41
respondents believe that adoption of e banking services have the driving of downsizing, gaining
competitive advantage; Increasing market share; improving bank‟s image and the government
support is a strong driver for e-banking adoption in Ethiopia .

42
CHAPTER FIVE

CONCLUSIONAND RECOMMENDATION
This chapter provides the key conclusion and recommendation on the issue that are raised in this
research paper especially on the aspect of the challenge and opportunity of E- banking service
in commercial bank of Ethiopia .

5.1 summary of finding

Based on the analysis made in chapter four the following summaries are made on the assessment
of the opportunities and challenges e-banking service in
Ethiopia.
 The major opportunities of adapting e-banking service to bank are Reduce queues in the
banking hall ; Reduces paper work , Increases the productivity of the bank , Helps to
perform transaction at lower cost , Increase Revenues of the bank, Increase Revenues of
the bank, Enhance the image of the bank , Increase efficiency of the bank., E-banking
enables 24 hour accessibility to the bank service , Enables the bank to expand its service
provision easy , Improves relationship with customers and Reduce queues in the banking
hall
 The major opportunities of adapting e-banking service to customers are enables 24-
houraccessibility to the bank service, enables customers to use bank services
conveniently, saves time of customers, enable users to complete banking activities more
easily and increase customer satisfaction .
 In the study the researcher got that the major driving force of e-banking adoption are
increasing market share, downsizing, and gaining competitive advantage, improving
bank‟s image and the government support.
 On the other hand, the study found that; increasing speed and efficiency, productivity,
reliability and accessibility of financial service and also acts as information control tool
for governments are the benefits of E-banking for the Economy. E-banking system, such
as ATM, mobile banking, internet banking and others are not well practiced by Ethiopian
banking industry. This is due to low level of ICT infrastructure and lack of legal frame
works a, Absence of skilled man power, Cost incurred during the purchases of the
software and the device.

43
 5.2 conclusions
Based on the result of the finding in the study we conclude that adapting e-banking
practice is very low in Ethiopia due to significant challenges that are low technological
skilled employees ,and low literacy rate of society ,low technological infrastructure ,low
regulatory and legal issues challenges ,lack of awareness using e-banking service by the
societies .in other hand ,adapting e-banking service can bring many opportunities for
banks as well as for customers’. The opportunities of adapting e-banking service to bank
are Reduce queues in the banking hall ; Reduces paper work , Increases the productivity
of the bank , Helps to perform transaction at lower cost , Increase Revenues of the bank,
Increase Revenues of the bank, Enhance the image of the bank , Increase efficiency of the
bank., E-banking enables 24 hour accessibility to the bank service , Enables the bank to
expand its service provision easy , Improves relationship with customers and Reduce
queues in the banking hall . The opportunities of adapting e-banking service to customers
are enables 24-houraccessibility to the bank service, enables customers to use bank
services conveniently, saves time of customers, enable users to complete banking
activities more easily and increase customer satisfaction . In general, the findings of this
study offer additional insights into the current E-banking situation and its implications for
E-banking growth in Commercial bank of Ethiopia after the introduction of E-banking,
banks get different challenges to practice E-banking effectively because of High rates of
illiteracy, low level of internet penetration and poorly developed ICT infrastructure, lack
of suitable legal and regulatory framework for E-banking, frequent power interruption,
fear of risk and cultural related challenges of adoption e-banking.

5.3 Recommendation

As per the findings from the analysis of the collected data; the following
recommendations are forwarded in order to promote and develop adoption of e-banking
service in commercial bank of Ethiopia. .

 To exploit the benefit of E-banking system, banking industry operated in Ethiopia needs
to familiarize their customers with the processes and benefits of the system and Branches

44
 should pay special attention to deliver service to customers by using E- banking system,
which can easily be accessible.
 Creating continuous social awareness about E-banking services by emphasizing its
advantage like time saving, low cost and convinces through different forms of media
advertising such as brochures, web pages etc and should build always to guarantee
reliability or dependability of online transactions in order to build customer confidence &
to improve the trust worthiness reputation of banks.
 The lack of legal and regulatory framework for e-banking services has discouraged
banks from introducing these innovative payment instruments or where they have
introduced, has put them at legal risk. Electronic payments are not clearly stated in
Ethiopia legal system. Thus, government should issue laws that govern electronic
payment. This helps financial service providers introduce innovative products currently
in use around the world which are cost effective, efficient and safe.
 In general recommended to strengthen adoption of e-banking services in Commercial
bank Ethiopia ; the government should support the electronic banking sector by investing
a comprehensive regulatory and legal framework for e-commerce and e-payment, by
providing incentives for financial institutions to invest rigorously on ICT and use of
ecommerce.

45
 Reference
Alhaji Ibrahim H. (2009). Understanding the e-payment system in Nigeria Al-Sabbagh, I., and Molla, A.
(2004). "Adoption and Use of Internet Banking in the Sultanate of Oman: An Exploratory Study. “Journal
of Internet Banking and Commerce 9(2): 1-7
Ayana Gemechu (2012).Adoption of Electronic banking system in Ethiopian Bankingindustry: Barriers and
driver.
Barnes, S. and Hunt, B. (2001), E-commerce & E-Business, Butter Worth, Heinemann, Great

Britain
Booz, D., and Hamilton K. (1997), E-banking: A Global Study of Potential Effects, New York,

NY.
Burr, W.(1996) “Wie Information’s technik die Bank organization verändernkönnte,” Bank und Markt,
11, pp. 28–31.
Chitura T.,Chuma W., Dube T and Runyowa L (2008). “Electronic Commerce benefits and adoption,
barriers in small and medium enterprises in Gweru, Zimbabwe”, Discussion Paper
University of KwaZulu Natal, South Africa.
Claessens, J., Dem. V., De Cock, D., Preneel, B. &Vandewalle.J. (2002).On the security of today online
electronic banking systems. Computers & Security Vol. 21:3:257-269
Cox, D 1967, “The audience as communicators”, Graduate School of Business Administration, Harvard
University, Boston, MA thesis, pp. 172-87.
Creswell, W 2003, Research Design: Qualitative, Quantitative and Mixed Approaches,‟ 2nd edition. Sage
publication, California
Dawd, I. (2004). Introduction to payment card.Dashen Bank. Addis Ababa. Mime

Devamohan A. (2002),E-Banking Problems and Prospects. Mimeo

Gardachew, W. (2010).E-banking in Ethiopia: practices, opportunities and challenges of ebanking.
Journal of Internet Banking and Commerce, 15(2), 2-9.
Gerrard, P & Cunningham, J 2003.“The diffusion of internet banking among Singapore consumer”,
International Journal of Bank Marketing, 21(1), pp.16- 28.
Kaleem, A & Ahmad, S. (2008). Bankers‟ Perceptions of Electronic Banking in Pakistan.Journal of Internet
Banking and Commerce, Vol. 13, No.1.
Kamrul, H, 2009, “E-Banking in Bangladesh: The Future of Banking, School of Business Studies”, MA
thesis, State University of Bangladesh.

46
APPENDIX -A survey instrument (English version)
Dear Sir/Madam
The aim of this questionnaire is to Assessment of Opportunities and Challenges of E-banking service in
Commercial bank of Ethiopia. The information you provide in response to the items in the questionnaire
will be used as part of the data needed for a study of challenges and Opportunities of E-banking service in
Commercial bank of Ethiopian. The results of the study are anticipated to supply to the understanding of
the basic challenges and benefits of providing new technology in delivering of service to customers in
commercial banks of Ethiopia. I would like to assure you that the information you provide will be used
only for the purpose of achieving academic award. Your involvement is regarded as a great input to the
quality of the research results. Hence, I believe that you will enlarge your assistance by participating in
the study. Your honest and thoughtful response is invaluable. Thank you for your participation.

Section I: Demographic profile of respondents

Instruction

Please indicate the following by ticking (√) on the spaces in front of response options:
1.Gender : Male

Female

2.Age: 18-25 26-36

37-47 above 48

3.Educational level :

Diploma Degree

Master PHD

4.work experience: Work experience

0-2 3-5

6-10>10

47
Section II: study area questions

Instruction: Below are lists of statements pertaining to Adoption of E-banking. Please indicate
whether you agree or disagree with each statement by ticking (√) on the spaces that specify your
choice from the options that range from ‟strongly Agree‟ to ‟strongly disagree‟ .Each choices
were identified by numbers ranged from 1 to 5. Note: SA- Strongly Agree, A- Agree, DA-
Disagree, N- Neutral, SD- Strongly Disagree

Part one: Questionnaires related with opportunities of adopting E-banking

services

1. From Bank Point of View

Item SA A N DA SD
1 2 3 4 5
Reduce queues in the banking hall

Reduces paper work

Increases the productivity of the bank

Helps to perform transaction at lower

cost

Increase Revenues of the bank

Enhance the image of the bank

Increase efficiency of the bank.

E-banking enables 24 hour accessibility

to the bank service

Enables the bank to expand its service

provision easy

Improves relationship with customers

Reduce queues in the banking hall

48
2. From Customer Point of View

Item SA A N DA SD
1 2 3 4 5
E-banking enables 24-hour accessibility
to the bank service

E-banking enables customers to use

bank services conveniently
E-banking system saves time of
customers
E-banking services enable users to
complete banking activities more easily
E-banking banking service increase
customer satisfaction

Part Two: Questionnaires related with challenges of E-banking services

1. Infrastructural Challenges

Item SA A N DA SD
1 2 3 4 5
Frequent power interruption

Low level of internet penetration

Poorly developed telecommunication
infrastructure
Brocken and slow internet conn ection
Limitation in ICT infrastructure

2. Illiteracy related challenges

Item SA A N DA SD
1 2 3 4 5
Lack of educated and efficient staff in e-
banking context
Lack of customer awareness with E-
banking product
Customers dis ability to access e-
banking services
Customer low levels of computer
literacy

Lack of demand from customer’s side

49
 3. Regulatory and legal issue related challenges

Item SA A N DA SD
1 2 3 4 5
Lack of suitable legal and regulatory
framework for E-banking.

Lack of law mandating the bank to

adopt E-banking technology

Cross-country legal and regulatory

differences

Lack of sufficient government support

affects customers‟ willingness

4.Socio-cultural related challenges

Item SA A N DA SD
1 2 3 4 5
Level of development of the society

Consumer‟s confidence and trust in the

traditional payment system

Cultural and historical differences in

attitudes
Resistance to changes

Difference in efficiency among peoples

of different cultures

50
Part Three: Questionnaires related with benefit of E-banking services

1.From Customer Point of View

Item SA A N DA SD
1 2 3 4 5
E-Banking offers substantial
advantage to customers in the form of
timesaving.
The customers can transact in their
account at anytime and anywhere
throughout the country or outside the
country.

There is no time and place restriction.

The customers can avail 24 hours a

day and 7 days a week access to
banking services at anywhere.

payment cards can make life easy for

people who want to travel abroad as
it minimizes the volume of cash one
needs to carry and the associated risk
of thief

2 From Bank Point of View

Item SA A N DA SD
1 2 3 4 5

Better branding to the market.

E-banking helps the banks to attract
more number of customers and tackle
the competition from other banks

With the help of e-banking, banks can

save time and hence they can
increase the number of transactions
and business
automated e-banking services offer a
perfect opportunity for maximizing
profits

51
Part four : Questionnaires related with driving force of E-bankingadoption

Item SA A N DA SD
1 2 3 4 5

downsizing, gaining competitive

advantage,
Increasing market share

improving bank‟s image

the government support is a strong
driver fore-banking adoption.

52
APPENDIX - B
Interview Questionnaires
I. Opportunity of E-banking service
1. What are the benefits your branch gained from the adoption of ATM, internet
banking and mobile banking system in the delivery of service to customers?
2. What are the advantages derived from the usage of technological tools like
ATM, internet and mobile to deliver service to customers instead of using the
traditional tools?
3 In your opinion what are the key factors that push to adopt ATM, internet
banking and mobile banking system?
4. As Your opinion, what are the advantages / reasons that you consider of
implementing E-Banking system?

II. Challenges of adopting E-banking services

1. What are the basic challenges of adopting new technological innovations like
ATM, internet banking and mobile banking?
2. Do you see any social, Economic and legal challenges to the adoption of ATM,
internet banking and mobile banking in your branch?
3. Do you think that government policy have impact on the adoption of E- banking
system? (Please Specify/explain)

53