Mobile Banking Loans and Profitability of Commercial Banks in Uganda. A case study of the Centenary Bank (main branch) Kampala. A correlational cross-sectional study.

Abstract

Background

This study aims to document the relationship between mobile bank loans and the profitability of Centenary Bank's main branch in Kampala, Uganda. Mobile banking refers to the act of enabling bank customers to access its services using mobile applications like phones and tablets. Mobile loans refer to the access to loans using mobile phones. A loan refers to when money is given to another party in exchange for repayment of the loan principal amount plus interest. Services include performing balance checks, getting loans, and loan payments, among others through a mobile device such as a mobile phone which is most used in developing countries like Uganda. Centenary Bank is one of the leading commercial banks in Uganda. Therefore, this study seeks to assess the relationship between mobile bank loans and the profitability of Centenary Bank's main branch in Kampala, Uganda.

Methodology

The study adopted a correlational, cross-sectional case study survey design.

Results

Based on the findings, there were significant positive correlations between profitability and mobile bank loans (0.324). This means that as these mobile loans increase, the profitability of Centenary Bank tends to increase as well. Further findings showed that 45.2% of the variation in profitability was been explained by mobile bank loans.

Conclusion

It can be concluded that mobile banking activities, including loans, have a positive impact on the profitability of Centenary Bank in Uganda.

Recommendation

Centenary Bank should leverage its mobile loan offerings to retain customers and increase profitability. This can be achieved through personalized loan offers, competitive interest rates, and efficient loan processing.

Centenary Bank should continuously monitor the market and adapt its loan offerings and interest rates to remain competitive while ensuring profitability.