Digital cash withdrawals and the financial performance of Equity Bank, Kampala branch. A descriptive, correlational, and cross-sectional study.

Abstract

Background

This study aims to assess the relationship between digital cash withdrawals and the financial performance of Equity Bank, Kampala branch

 Methodology

125 respondents were selected from a population of 144 participants. These were selected using a purposive sampling technique and simple random sampling. Primary data was collected using self-administered questionnaires, interviews, and Observation methods. Secondary data was obtained from annual reports, financial statements, meeting proceedings, Bank of Uganda publications, and Uganda Bankers Association reports

 Results

The findings showed a mean response of 4.1 and a standard deviation of 0.3 on the statement “Digital withdrawals using phones using USSD and the Equity app eliminates third-party costs, hence less withdrawal costs and generates more profits for the bank”. Further, the findings revealed that 76.7% of the respondents agree with the statement. Therefore, digital withdrawals using phones using USSD and the Equity app eliminate third-party costs, hence less withdrawal costs and generating more profits for the bank.

The findings also showed mean response of 4.13 with a standard deviation of 0.71 on the statement “Digital withdrawals made from ATM are more risky and associated with fraud hence less trusted by customer affecting the revenues and profits generated by the bank using digital means” Further the findings revealed that 84.9% of the respondents agreed that Digital withdrawals made from ATM are more risky and associated with fraud hence less trusted by customer affecting the revenues and profits generated by the bank using digital means.

 Conclusion

The correlation between digital cash withdrawals and financial performance was 0.551, with a significance value is 0.002. Therefore, there is a significant relationship between digital cash withdrawals and financial performance.

 Recommendation

The commercial bank should lower its digital transaction charges so as to attract more customers, serve a significant market share, and improve sales, hence improve financial performance.