Digital Lending and Service Delivery Efficiency at KCB Bank Kenya Limited

Abstract

With the rise of digital lending platforms, which enhance credit access for previously unbanked populations, concerns remain about issues like non-performing loans and regulatory oversight. This study examined the impact of digital lending on service-delivery efficiency at KCB Bank Kenya Limited. Specifically, it sought to assess the relationship between mobile lending platforms and digital customer onboarding and how they collectively affect service delivery efficiency at KCBs in Kenya. The study was grounded on the Technology Acceptance Model. It was guided by a descriptive design, and the target population consisted of employees of KCB bank in Nairobi County. To investigate the research aims, purposive, stratified, and simple random sampling methods were used to select a sample of 173 respondents. The number of respondents was determined using Fisher’s formula. The data was collected using a structured questionnaire and an interview schedule. A pilot test was conducted among KCB banks in Nakuru County to assess the validity and reliability of the instruments. In addition, secondary data was collected from audited statements to enhance the primary data. Analysis was performed using SPSS Version 26, and multiple regression was used to test the hypotheses. Both descriptive and Inferential statistics were used in the analysis. The results show that mobile lending and digital customer onboarding affect the service delivery efficiency at KCB bank. The regression analysis revealed that digital lending had a strong positive correlation with service delivery at KCB bank (r = 0.866 and Adj. R2 = 0.742; P<0.05). The study concluded that digital lending significantly affected the level of service delivery efficiency among commercial banks in Kenya. The model was a strong predictor of the relationship between digital lending and service delivery (F statistic = 103.326 and p value< 0.05). The study recommends that policymakers, commercial banks, and other stakeholders in the banking sector prioritize financial strategies such as improving the mobile banking platform in order to make it more inclusive and easier to use by the entire bankable population. This can be achieved by providing policymakers with a framework to design an effective digital lending system tailored for banking institutions.