Mobile Banking Services and Financial Inclusion among Commercial Banks in Zambia: A Case Study of selected Branches in Lusaka

Abstract

Mobile banking services present both opportunities and challenges for financial inclusion in Zambia. Despite significant investments in mobile banking infrastructure by commercial banks like ZANACO, adoption rates and effective utilization remain below optimal levels, particularly among certain demographic groups in urban areas like Lusaka. This study examined mobile banking services and financial inclusion among ZANACO branches in Lusaka, with objectives to assess adoption rates across demographic segments, analyse correlation between service utilization and financial inclusion indicators, and evaluate implementation barriers. Using a mixed-methods approach, the study collected data from 337 ZANACO customers through questionnaires and conducted interviews with key banking officials. The research employed descriptive statistics, correlation analysis, and multiple regression modelling, complemented by thematic analysis of qualitative data. Findings revealed moderate adoption levels (mean=2.99, SD=1.402) across customer segments, with higher rates among younger, educated users (21.7% with bachelor's degrees) and higher-income earners (22% above K20,000). Service utilization showed a strong correlation with financial inclusion outcomes (β=0.342, p<0.001), while implementation barriers significantly moderated effectiveness (β=-0.187, p<0.001). Qualitative data highlighted network connectivity challenges, digital literacy variations, and transaction cost concerns affecting implementation. Interview findings emphasized the success of targeted strategies for different customer segments, with 60% of new accounts primarily using mobile services. The study recommends implementing tiered pricing structures for low-income segments, developing multi-language interfaces, and establishing dedicated digital banking support units in branches to enhance adoption and utilization rates.