Abstract:
Mobile banking technology has revolutionized the financial sector globally, driving significant
improvements in financial inclusion, operational efficiency, and customer satisfaction and
contributing significantly to the financial performance of financial institutions. However, as many
financial institutions embraced the technology and more of the previously unbanked population
started using it, the fraudsters saw an opportunity to infiltrate the systems through cyber-attacks.
These eroded the gains brought by Mobile Banking Technology and raised concerns over the
optimal firm size to maximize gains. The study sought to determine the effect of mobile banking
technology on the financial performance of Microfinance Institutions in Kenya. And the
moderating effect of firm size on the relationship between the two variables. The study used a
descriptive research design and a questionnaire to collect data from 204 staff of 13 Microfinance
Institutions licensed in Nairobi, Kenya. The study obtained Secondary data from the Central Bank of Kenya Supervisory Reports of 2017 to 2022. The data was analyzed using descriptive
and inferential statistics. The study findings showed that mobile banking technology positively
and significantly affected the financial performance of Microfinance Institutions. Additionally, firm
size positively and significantly affected the relationship between mobile banking technology
and financial performance with large firms benefited more than smaller firms. The study
recommended that firms invest more in mobile banking technology to boost financial
performance and increase their capital base, outlets and market share to reap higher benefits
from the economies of scale.
