Effects of Internet Banking on Small and Medium Enterprises Performance

Abstract

This work carried out an examination of effects of Internet Banking on Small Medium Enterprises (SMEs) Performance (P). The pre-set objectives were; to identify the factors influencing internet banking usage (IBU) on SP and examine the relationship between IBU and SP and set a hypothesis as there is no statistical significant relationship between IBU and SP. Primary data was employed. Correlation analysis was employed to identify the factors influencing IBU on SP while multiple regression was employed to examine the relationship between IBU and SP. The variables operationalized were; internet banking is easily assessable (IBIEA), Internet banking is reliable (IBIR), Internet banking is fast (IBIF), Internet banking is cost effective (IBICE), Internet banking is convenience (IBIC) and rate of return (ROR) Finding revealed that correlation co-efficient (r) and critical p-value between ROR and IBIEA were 0.844 and 0.000 (P > 0.05), ROR and IBIR were 0.819 and 0.000 (P >0.05), ROR and IBIF were 0.863 and 0.000 (P > 0.05), ROR and IBICE were 0.938 and 0.000(P > 0.05) while ROR and IBIC were 0.896 and 0.000(P > 0.05) respectively. Therefore, the major factor influencing ROR were IBIEA, IBIR, IBIF, IBICE and IBIC. Also, coefficient of determination R² was 0.801 and multiple correlation coefficient R was 0.895 which implied that the extent to which independent variables (IBU) explained a variation in the dependent variable (SP). It was affirmed that a significant relationship existed between IBU and SP. Similarly, F-ratio and the critical p-value were 139.891 and 0.000. Since the critical p-value 0.000 was lower than 0.05 level of statistical significance, it implied that there was a statistical significance relationship between IBU and SP. It was concluded that the major factor influencing ROR were IBIEA, IBIR, IBIF, IBICE and IBIC.