Evaluation of electronic banking for microfinance institutions and its impact on microenterprises: A case study of Ga-Rankuwa.
Electronic banking describes the process in which customers can perform banking transactions without leaving the confines and comfort of their homes. It involves the use of short messaging services and other e-money resources. Through success stories and empirical evidence, microfinance is continuously proving to be an effective tool for improving living standards and economic development, although its benefits have not been fully utilised in South Africa. It provides the much-needed support for small, medium and microenterprises to help them grow and develop. Ultimately, microfinance institutions could benefit immensely by adopting electronic banking systems in their daily operations because these systems promote efficiency by way of increased productivity, profitability and sustainability. The objective of the study is to evaluate the use of electronic banking systems by microfinance institutions in their operations by considering short messaging services, electronic cash, Internet banking and the distribution of automated teller machines in order to measure the effectiveness of their use on productivity, profitability and the sustainability of microenterprises. The study further examines the prospects and problems that electronic banking may present. Two banks and twenty five microenterprises were randomly selected from Ga-Rankuwa township in Gauteng, South Africa. Structured questionnaires and unstructured interviews were used to obtain information. Data gathered was subjected to qualitative and quantitative statistical analyses with the Statistical Package for Social Sciences, version 20 to ensure consistency and validity. The study recommends the adoption of electronic banking by microenterprises as a strategic instrument for increased convenience and the improvement of access to credit.
Credit, Electronic banking, Financial institutions, Financial services, Microenterprises, Microfinance, Money lenders
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