ASSESSMENT OF CUSTOMER KNOWLEDGE AND UTILIZATION OF E- BANKING

FACILITIES (IN CASE STUDY AREA OF COMMERCIAL BANK OF ETHIOPIA,

DEBREMARKOS BRANCH)

A SENOR ESSAY SUBMITTED TO DEPARMENT OF ACCOUNTING AND FINANCE

FOR THE REQUIRMENT OF IN PARTIAL FULFILMENT OF BA DEGREE IN
ACCOUNTINGAND FINANCE

BY: GETU AHUNM HELEN

SEWALEM EMEBET

ANEMUT EYERUSALEM

MENGISTU FIKIRE

ERMYAS

HAILU AMBACHEW

ADVISOR; ABATE GASHAW (MSc)

DEBRE MARKOS UNIVERSITY

COLLAGE OF BUSSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

JUNE/ 2017

DEBRE MARKOS, ETHIOPIA

 ACKNOWLEDGMENT

First of all, Io would like to express my sincere thanks to almighty God, next my deepest
gratitude goes to my advisor Mr. Gioteom (MSc) for his helpful and critical advice and
appreciation in the preparation of this paper. Finally, I would like to thanks family for their
moral and financial support and friends who support me .
 ABSTRACT

As E-banking is become growing worldwide, adapt and be familiar with it is so much important.
especially in developing country like Ethiopia introducing and improving with vital
infrastructure is necessary to make available and accessible for the general customers and
Knowledge and utilization of it. The general objective of the study was assessment of customer’s
knowledge and utilization of e banking facilities. From this general objective four specific
objective were explored. descriptive research design was employed to conduct this study.
Primary source of data was used and those data were collected by questionnaire. The data was
analyzed by descriptive analysis such as tables and percentages from analysis of the collected
data the finding revealed that ATM, mobile banking, internet banking and POS/point of sale/ are
E-banking channel by which the bank is using to give services to customers but customers lack
knowledge and know how on those services based on the study Findings and the researcher
recommended to responsible body should ensure the availability of E-banking facilities and
create a awareness on those facilities to customers by using different means.
 ACRONYMS

E-banking _ Electronic banking

ATM _ Automated teller machine

POS _ Point of Sale

CBE-Commercial bank of Ethiopia

 TABLE OF CONTENTES

CONTENTES PAGE

Acknowledgment ---------------------------------------------------------------------------------------

Abstract---------------------------------------------------------------------------------------------------

List of

tables------------------------------------------------------------------------------------------------

Acronyms-------------------------------------------------------------------------------------------------

CHAPTER ONE

1. Introduction-----------------------------------------------------------------------------------------
1.1 Back ground of the organization---------------------------------------------------------------
1.2 Back ground of the study------------------------------------------------------------------------
1.3 Statement of the problem------------------------------------------------------------------------
1.4 Objective of the study
1.4.1 general objective------------------------------------------------------------------------
1.4.2 specific objective-----------------------------------------------------------------------
1.5 Scope of the study--------------------------------------------------------------------------------
1.6 Limitation of the study-------------------------------------------------------------------------
1.7 Significance of the study------------------------------------------------------------------------
1.8 Organization of the study-------------------------------------------------------------------------

CHAPTER TWO

2. LITERATURE REVIEW

2.1.1 Theoretical literature review--------------------------------------------------------------------

2.1.2 The evolution of E-banking system-----------------------------------------------------------

 2.1.3 E-banking system in Ethiopia banking industry---------------------------------------------

2.1.4 Factors affecting E-banking system-----------------------------------------------------------

2.1.4.1 technological factors -------------------------------------------------------------------------

2.1.4.2 organizational factors-------------------------------------------------------------------------

2.1.4.3 environmental factors------------------------------------------------------------------------

2.1.5 Challenges of adapting E-banking in Ethiopia--------------------------------------------------

2.1.6 Benefit of adapting E-banking system ----------------------------------------------------------

2.1.6.1 Benefit of E- banking to banks---------------------------------------------------------------

2.1.6.2 Benefits of e banking to customers------------------------------------------------------------

2.2 .2 Empirical literature review ----------------------------------------------------------------------

2.2.2.1 knowledge

gap---------------------------------------------------------------------------------- CHAPTER

THREE

Research method-------------------------------------------------------------------------------------------

3.1 Research design--------------------------------------------------------------------------------------

3.2 Type and source of data---------------------------------------------------------------------------

3.3 Method of data collection-------------------------------------------------------------------------

3.4 Target group-----------------------------------------------------------------------------------------

3.5 Sample design----------------------------------------------------------------------------------------

3.6 Method of data analysis and presentation-------------------------------------------------------

CHAPTER FOUR

DATA ANALYSIS AND PRESENTAION

4.1 Demographic information of respondents-------------------------------------------------------

4.2 Availability of e banking in the bank-------------------------------------------------------------

4.3 Customers knowledge about e banking facilities in the bank-----------------------------------

4.4 Utilization of e banking--------------------------------------------------------------------------

CHAPTER FIVE

Conclusion and recommendation--------------------------------------------------------------------

4.1 Introduction-----------------------------------------------------------------------------------------

4.2 Conclusion-------------------------------------------------------------------------------------------

4.3 Recommendation-----------------------------------------------------------------------------------

Appendix

A-----------------------------------------------------------------------------------------------
 List of table

Table 4.1 demographic information of

respondents…………………………………………………………………………….

Table 4.2 types of account customers hold and

Frequency that how often they visit the bank………………………………………......

Table 4.3 assessment of know how about the presence of

E-banking facilities in the bank………………………………………………………...

Table 4.4 utilization of E-banking ……………………………………………………...............

Table 4.5 customers’ attitude to invite E-banking facilities

to others…………………………………………………………………………………

Table 4.6 position and kay availability of E-banking facilities ………………………………..

Table 4.7 customer’s awareness on E-banking facilities………………………………...........…

Table 4.8 usage of E-banking facilities………………………………………………..................

Table 4.9 customer’s familiarity with E-banking and

its efficiency……………………………………………………………………………

Table 4.10 effectiveness of E-banking………………………………………………………….

 CHAPTER ONE

Introduction

As an introduction of the study, this chapter contain, background of the organization, background of
the study, statement of the problem, objective of the study, scope of the study, limitation of the study,
significance of the study and organizations of the study respectively.

1.1 Background of the organization

It was in 1905 that the first bank, the bank of Abyssinia, was established based on the agreement signed
between the Ethiopian government and national bank of Egypt which was owned by the British. It is
capital was allowed to engage in commercial banking (Selling shares, accepting deposits and affecting
payments in chegues) and to issue currency notes. (Gardachew, 2010).

The agreement prevented the establishment of any other bank of Ethiopia, thus giving monopoly right
to the bank of Abyssinia. The bank, which started operation after its establishment agreement was
signed, opened branches in Harar,Dire Dawa, Gore and dembi-Dolo as well as an agency office in
Gambella and a transit office in Djibouti . Apart from serving foreigners residing in Ethiopia and
holding government accounts, it could not attract deposits from Ethiopia nationals who were not
familiar with banking service.

After the Ethiopian-English victory over fascist Italy, the new government established the state bank of
Ethiopia a proclamation issued in August 1942. State bank of Ethiopia commenced full operations on
15 April 1943 with two branches and 43 staff. It served both as the Ethiopians central bank with the
power to issue bank notes and coins as agent of the ministry of France, and as the principal commercial
bank in the country. In 1945 the Ethiopian government granted the bank the sole right of issuing
currency.

The leading bank in Ethiopia established in 1942. Pioneer to introduce modern banking to the country.
it has 626 branches stretched across the country. The leading African bank with assets of birr 15 billion
as on June 30th 2012.

Plays a catalytic role in the economic progress and development of the country. According to annual
report of CBE 2015, commercial bank of Ethiopia has more than 4 million account holders. It has
strong correspondent’s relationship with more than 50 renewed foreign banks and a SWIFT bilateral
arrangement. commercial bank of Ethiopia combines a wide capital base with more than 12,800
talented
and committed employees, pioneer to introduce western union, Money transfer service. Ethiopian
commercial bank of Ethiopia has reliable and long standing relationships with many internationally
acclaimed banks throughout the world, according to annual report of CBE 2015.

Commercial bank of Ethiopian Debre Markos branch was established in 1961 by emperor Haile
Selassie.

1.2 Background of the study

The electronic banking in a form of banking service where funds are transferred through on exchange
electronic signal between financial institution, rather than exchange of check, cash and other negotiable
instruments. Banking also known as electronic fund transfer(EFT) is simply the use of electronic means
to transfers funds directly from one account to another account without check and cash. The rapid
proving information and communication technology(ICT) is knocking the front door of every
organization in the world, where Ethiopian banks would never be exception. In the face of rapid
expansion of electronic payment (e- payment) systems through out of the developed and developing
world, Ethiopia financial sector cannot remain on exception in expanding the use of the
system( Gardachwe, 2010, p.2).

The evolution of e-banking started from the use of automatic teller machine(ATMs) and finland is the
first country in the world to have taken a lead in e-banking (Mishra,R and J. Kiranmai, 2009) in order to
provide efficient and effective service to their customers. E- banking has been widely used in developed
countries and is rapidly expanding in developing countries. However, the slow diffusion of e-commerce
to African countries has been attributed to a number of issues some of which may be unique to the
African continent (Darley W.K, 2001).

E- banking defined as the automated delivery of new and traditiuonal banking products and service
directly to customers through electronic, interactive communication channels. E- banking includes
systems that enables financial institution customer, individuals or business, to access accounts, transact
business, or obtain information on financial product and services through a public or private network,
including the internet ATM, Debit Card, Credit card and etc. The computer application are paramount
concern to the banks in today’s business environment and internet has become the major platform for
all financial , banking and commercial transactions in the present Scenario( Magembe, BAS and
ShemiAP,
2000).
Internet banking which is the use of interim of a remote delivery channels for banking service (Furst
and Nall, 2002, p.s). While the help at the internet banking is no longer bound to time or geography.
Customers and over the world have relatively case to their account 24 hours per days, seven day per
week.

1.3. Statement of the problem

The economy of most developing countries is cash driven, meaning that monetary transactions are
basically made through the exchange of bank notes and coins for goods and services. However, this
trend is now giving way to a modern and sophisticated payment system where the currency and notes
are converted to data. Which are in turn transmitted through the telephone lines and satellite
transponders. This is as a result of rapid technological progress and development in the financial
market, (Ozuris etal ; and Johnson, 2010; 2005).

With the rapid diffusion of the internet in banking coupled with the gust to expand and capture a larger
share of the banking market. most banks all over the world have adapted the use of the internet and
other electronic channels such as ATM, Mobile Banking and Visa cards.

Since e-banking facilities are very important for the socio-economic development of one country. There
are a number of studies were conducted on its opportunities, challenges and practice of e-banking
facilities. For instance, Kerem( 2003 ) , Hoppe etal (2001) and Garedachew (2010). However, all these
researchers were focused on electronic banking opportunity, challenge and identify socio- economic
factors that affect the electronic banking performance but they don’t examine customer’s awareness
towards e-banking facilities and utilization. As per the researcher knowledge no study is conducted to
examine customer’s knowledge towards e-banking facilities and utilization at the same time. Thus, by
taking this into account this and some other knowledge gaps and keeping this results or finding of the
former studies, the researcher attempt to examine customer’s knowledge towards e-banking facilities
and utilization in Ethiopia with a particular emphasize of commercial bank of Ethiopia in Aksum
Hawelti branch by seeking answers for the following research questions: -

• What type of e-banking facilities are available and accessible of Aksum in Hawelti branch?

• Are customers aware of the availability of e-banking facilities?

• What is the level of knowledge and utilization of e- banking facilities among customers?
 • How effective are those facilities being put to benefit customer’s?

1.4. Objective of the study

Under this sub title both general and specific objectives of the study are presented.

1.4.1. General Objective

The general objective of this study is to assess customer knowledge and utilization of e-banking
facilities in case of commercial bank of Ethiopia in Aksum Hawelti branch.

1.4.2. Specific Objective

Specific objectives of this study include the following: -

• To assess the availability and accessibility of the various e-banking facilities.

• To assess the awareness of customers about the e-banking facilities available in Aksum
Hawelti branch of CBE.

• To assess the knowledge and utilization of e- banking services by customers

• To examine how effective, the usage of e- banking facilities benefits customers.

1.5. Scope of the study

In this study the researcher attempt to investigate the customer’s knowledge and utilization of e-
banking facilities. To make the study manageable and to evaluate the problem in detail, the
researcher are only confined to Commercial bank of Ethiopia in Aksum Hawelti branch’s
customer.

1.6. Limitation of the study

In the process of conducting research there are so many challenges that may be faced by any
researchers. Just like other researchers in conducting this study, the researcher faced the
following limitations: -

• Lack of reference books

• Inability to get data at the right quantity and

quality.

• Finance constraints
• Time constraints

• Poor internet connection

 1.7. Significance of the study

This study is believed to be an input for bank managers to create awareness and take full
advantage of e-banking facilities for the customers and to know how the beneficial it has been to
them. It would also help bank managers plan how to make the facilities customer friendly.
Again, the study would also help the managers of the bank to the effectiveness of their e-banking
services. The study would also help educate customers on how to take full advantages of e-
banking services in order to reduce the amount of time spent of the banking hall.

1.8. Organizations of the studyl

This study is organized into five chapters. The first chapter present the introduction parts:
background of the organization, background of the study, statement of the problem, objective of the
study, scope of the study, significance of the study, and organization of the paper. The second chapter
show the review of related theoretical literature and empirical studies while the third chapter contain
brief description of the research methods and followed by a discussion of the underlying principles of
qualitative, quantitative research approaches and method to be adopted. the fourth chapter present and
analyzes the results. finally, chapter five present the conclusion and recommendation of the study
 Chapter Two

Literature Review

Under this title both theoretical and empirical issues of electronic banking facilities on their usage,
customer’s attitude, and awareness will be stated based on past studies.

2.1.1 Theoretical Literature review

E- banking is a form of banking service were funds are transferred through an exchange electronic
signal between financial institutions, rather than exchange of cash, checks, or other negotiable
instruments Kamrul,(2009). E- banking also known as electronic funds transfer(EFT), is simply the
use of electronic means to transfer funds from one account to another rather than check or cash
( Malak, 2007).

The term of e-banking often refer to online banking or internet banking, which is the use of the internet
as a remote delivery channel for banking service. (Forst and Nolle 2002, page 5). With the help of the
internet, banking is no longer bound to time or geography, customers all over the world have relatively
easy access to their account 24 hours per day, seven days per week.

Another definition of e- banking is that, it is the use of computer to retrieved and process banking data
(statements, transaction detail, etc.) and to initiate transactions (payments, transfers, requests for service
etc.) directly with a bank or with other financial service provides remotely via a telecommunication
network (Yang 1997, page 2). It should be noted that electronic banking is a bigger platform than just
banking via the internet.

E-banking also defined as a variety of platforms such as internet banking (online banking). Tv based
banking and Pc (personal computer) banking or offline banking where by customers access these
services using an intelligent electronic device like pc, personal digital assistance (PDA), - Automated
teller machine(ATM) , Point of sales(POS), Kiosr or touch tone telephone (Alagheband 2006, p.11) .
Different forms of e- banking system were discussed as follows.

• Automated Teller Machine (ATM)- it is an electronic terminal which gives customers the
opportunity to get banking service at almost any time. To withdraw cash, make deposits or
 transfer funds between accounts, a consumer needs an ATM Card and personal identification
number(PIN).

• Point of sale transfer terminals(POS)- the system allows customers to debit card. This card
looks like a credit card but a significance difference. The money for the purchase is
transferred immediately form account of debit card holder to the stores account (Malak,
2007).

• Internet extra net banking- it is an electronic home banking system using web technology in
which bank customers are able to conduct their business transactions with the bank through
personal computers.

• Mobile banking - it is a service that enables customers to conduct some banking services,
such as account inquiry and funds transfer by using of short text message(SMS).

Banking offer internet banking in two main ways an existing bank with physical offices can establish a
website and offer internet banking to its customers in addition to its traditional delivery channels. A
second alternative is to establish virtual branch loess or internet only, bank almost without physical
offices virtual banks may offer their customers to ability to make deposits and withdraw funds via
ATMs or other remote delivery channels owned by other institution (Furst and Nolle, 2002 Page 5).

2.1.2. The evolution of e- banking system

Electronic innovation in banking industry can be traced back to 1970, when the computerization of
financial institutions gained momentum (Malak, 2007) . However, a visible presence of this was evident
to the customers since 1980, with introduction of ATM.

Innovative banking has grown since then, aided by technological developments in the
telecommunications and information technology industry. The early decade of the 1990’s witnesses the
emergence of automated voice response (AVR) technology. By using the AVR technology, banks could
offer telephone banking facilities for financial service. with further advancement in technology, banks
were able to offer services, through Pc owned and operated by customers at their convenience, through
the use of internet property software. The users of these service were, however, mainly corporate
customers rather than retail ones (sohail and shanmugham 2003).

The security first network bank was the first internet banking in the world that was built in 1995 in
USA. After that some famous banks introduced their internet banking one after another, such as city
bank, and Bank of America.
 2.1.3. E- banking system in Ethiopia banking
industry

The appearance of e-banking in Ethiopia goes bank to the late 2001, when the largest state owned
commercial bank of Ethiopia introduced ATM to the local users. In addition to eight ATM located in
Addis Abeba, CBE has visa membership since November 14, 2015. But due to lack of appropriate
infrastructure it failed to rep the fruit of membership.

2.1.4. Factor affecting to E-banking system

Many researchers have been used different frame works in the study of adopting new technology
innovation. Among frameworks that have been developed based on the past studies include, the
technology organization framework (TORI( Tornolzky and Fleischer, 1990) . which identifies three
basic factors for the adoption of technological innovation s, i.e technological factors, organization and
environmental factors.

According to Tornalzky and flesscher( 1990) technology adoption within an organization is influenced
by factors pertaining to the technological context, the organization context, and the external
environment
. Based on this, the researcher summarizes possible key factors affecting e-banking adoption.

For each context, several factors have been identified from the literature but only those that are
considered relevant for e-banking adoption are included in the study detail of factors considered in the
study are presented below.

2.1.4.1. Technological Factors

According to Elias (2009) chooses two basic factors related to technology competences, which have
relevant to the organizational factors i.e., perceived benefit and perceived risks are considered in this
study from the technological factors.

• Perceived benefits: - perceived benefits of e-banking cover both direct and indirect benefits
for the banking industry as well as for the consumers. Direct benefits include the solving on
operational cost improved organizational functionality. productivity gain improved efficiency
 and increased profitability. Indirect includes the opportunity or intangible benefits such as
improved customer’s satisfaction through improved services improved banking experience
and fulfillment of their changing need and life style (lacovov, 1995). Frequent power
interruption lack of reliable power supply is a key challenge for smoothly running e-banking
in Ethiopia.

• Perceived risks: - according to zhao (2008) , one of the important risk faced by banking
institution in offering e-banking service is the customers “ resistance to use the services
which significantly hider the growth of e- banking service”. Issues related to security have
always been a concern when dealing with technologies related to online transaction such as e-
banking. Therefore, the perception of the risks regarding e-banking is expected to influence
its adoption and further growth.

2.1.4.2. Organizational Factors

Organizations are influenced by different factors to adopt and growth of e- banking services. Like
firm size top management support, financial and human resource. In the frame work, in this
study, researchers use one basic organizational factor as discussed below (Iccovo, 1995).

Financial and human resources: - financial resources are an important factor in facilitating innovation
adoption for any organization and they are often correlated size firm. Therefore, there is expected that
the availability of financial resource with in adopting firm is important for e-banking adopting. These
resource enable banking institution to obtain human related resource including the required skill and
expertise to develop and support provision of e-banking services.

2.1.4.3. Environmental Factors

The four environmental factors relevant for e-banking adoption included in this study are: -

• Legal and frame works: - the existence and maturity of e-commerce legal framework with
in a country influence the diffusion of online transactions include e-banking.

• The national ICT infrastructure: - national ICT infrastructure is one major that support the
adoption of e-banking services. Without an adequate development levy and quality of a
notions ICT infrastructure, e-banking adoption and use cannot do well.

• Competitive pressure: - It can strongly influence any bank to develop and adopt e-banking
imitative and it may affect the bank perception toward e-banking system.
 • Government support: - government can directly or indirectly affect the adoption of e-
banking in terms of creating a favorable environment and inputs for banking institution and
their customers so that the service can be diffused with the community.

2.1.5. Challenges of adopting e- banking in Ethiopia

According to Gardachew(2010) Ethiopian banking industry faces numerous challenges to adopt e-

banking system and grab the opportunities presented by ICT application . in general, the key challenge
for e-banking applications are: -

• Low level of internet penetration and poorly developed telecommunication infrastructure lack
of infrastructure for telecommunication, internet and online payments impede smooth
development and improvement in e-commerce in Ethiopia. Most rural area of the country,
where the majority of small and medium business are concentrated, have no internet facilities
and thus are unable to engage in e-commerce activities.

• Lack of suitable legal and regulatory framework for e-commerce and payment. Ethiopia
current law don’t accommodate electronic contract and signatures. Ethiopia has not yet
enacted legislation that deal with e-commerce concern including enforceability of the
validity of electronic contract, digital signatures and intellectual copy right and restrict the
use of encryption.

• High rate of illiteracy: - low literacy rate is serious impediment for the adoption of e-banking
in Ethiopia as it hinders the accessibility of e-banking service. for citizens to enjoy fully
benefits of e-banking, they should not only know, how to read and write but also possess
basic ICT literacy.

• High cost internet: - the cost of internet access relative to per capital income is a critical factor.
Compared to the developed countries, there is a high cost of entry into the e-commerce
marked in Ethiopia. These include high startup investment cost, high cost of computer and
telecommunication and licensing requirement.
 • Absence of financial institutions network that links different banks (banks are not yet –
automated). Most of the banking transaction currently taking place use credit and debit cards
supplied by visa and master card. For conducting e-banking the use of credit or debit card is
mandatory thus requiring the need for specialized system which are not currently available.

2.1.6. Benefit of adopting E- banking system

According to Robison (2009) in delivering banking product the cheapest way can be done only
through the online banking service, the branch network of books has reduced and also the staff for
working in bank and customers satisfied to use the online banking service as it will save a lot of
time and effort to go to branch of bank and perform these transactions.

Joseph and stone (2003) emphasized that human and technology based delivery channel were greatly
linked with the customer’s perception of how these bank service were delivered to them and pointed
out that these perceptual outcomes would affect the level of bank customer satisfaction, retention and
switching. Before the shift of technology customers were facing a lot of problem like, handling a lot
of money and transferring of that money, submission of utility bills and waiting in long queue as
there was on online transferring facility, and there was no information about new services offered
by bank and mostly deposit holder were unaware of how to get benefits from bank product and
service like bank loan, credit card, ATM card etc.

2.1.6.1. Benefits of E-banking to banks

Under the view of Robinson (2009), relevant cost for conducting banking transaction via online are
much lower than via brick and mortar branch. The author emphasizes that the banking can bring
about many competitive advantage for banks in today’s highly competitive banking market.

A research on e-banking has been carried out by Molis (1998) argue that e-banking can play an
important role in enhancing cross selling and price differentiation. E- banking can make favorable
condition for bank to provide customers numerous service 24 hours a day 7 days per week.

E- banking can improve customer satisfaction with the bank due to the fact that it makes customers
less price sensitive and improve their intention to repurchase, and more loyalty to the bank via
providing more positive words of mouth about the bank than other customers.

2.1.6.2 Benefit of E-banking for customers

It should be noted that E-banking is not only bring about benefits to banks but also to their customers.
customers can enjoy a variety of service, especially service which are not provided by traditional bank
branch pham(2010).

One of the greatest benefits that e-banking brings about is that it is not expensive or even free for
customers to utilize e-banking products (service) pham(2010). He was believed that e- banking
customers doesn’t want to travel to or from a bank branch to make some banking transaction. In other
words, they want to utilize e- banking to save time and money. E- banking can bring about convince
and accessibility, which will have positive effects to customer’s satisfaction and loyalty on bank. It is
totally possible for customers to manage their banking transaction whenever they want and to enjoy
improved privacy in their interaction with the bank. In addition, customers can enjoy more benefits at
lower cost levels by utilizing e-banking (Moils, 1998).

According to Turban (2008) , that e-banking is really beneficial to customers in terms of cost savings ,
no limit on time and space, quick response to customer complaints and better service or product, such
as benefits are believed to elevate customer satisfaction.

2.2.2 Empirical literature review

A lot of studies are conducted by different researchers in different time and parts of the world.
Specifically Gardachew(2010) conducted research on the opportunity and challenges of core banking
in Ethiopia . The aim of his study was focused on analyzing the status of core banking in Ethiopia and
investigates the main challenges and opportunities of works for e-commerce and e-payments,
political instability in neighboring countries, high rates of illiteracy and absence of financial networks
that links different banks.

According to Gardachew (2010) , opportunities offered by ICT through learning programs and
commitment of the government on development of ICT infrastructures is considered as drivers of
using e-commerce and e-payment.

The study of Kerem (2003) on the adoption of core banking; underlining consumer’s behavior and
critical success factors. Research conducted in Estonia, was intended to study the further
understanding og , how customers perceive core banking is the day of interactive channels in Estonia,
as Estonia is international renewed for being a pioneer in the acceptance of new technologies. A series
of an in depth interviews was conducted with leading industry experts in Estonia. The selection
criteria for the
respondents was mainly their involvement with the development of internet banking systems from the
early days of its emergence. Finally, the research indicates that banking activities alone may not be
sufficient in achieving growth if general infrastructure, economic environment and government
initiatives are not supportive.

The research conducted on identifying the attitudinal, social and perceived behavioral control factors
that may influence the adoption of internet banking by Hoppe etal (2001) were based on theory of
planned behavior (TPB) and the diffusion of innovation theory (DIT) developed by previous
researchers in Singapore. The aim of the study was to collect south African data in order to rest out
the hypothesis regarding the factors which affect adoption of core banking and compare these results
with those collected in other countries online questions was used to collect empirical data and the
result of the study shows that intention to adopt e-banking can be predicted by attitudinal factors,
perceived behavioral control factors to a lesser degree, and not by subjective norms. All attitudinal
factors except banking needs are found to be significant, with complexity and risk showing negative
relations.

In General, review of empirical studies shows that understanding the critical success factors in core
banking is important for banking industries because it would potentially help them improve their
strategic planning process. The main obstacles and barriers that oppose corebanking adoption are low
level of internetpenetration,Highrate ofilliteracy , privacy of information and technology investment
cost.

Also the literature review indicates that serviceprovision to the customers there are different factors
that influencing the adoption of core banking, such as, perceived advantages and others factors related
to the service itself and how to be accepted and used by the customer, which differ from country to
country

reflecting the economic and technological development in each country.

2.2.2.1. Knowledge gap

A review of past studies on e- banking adoption, practice, opportunity, challenge, perception and usage
indicate interesting findings. Most of these studies were focused on the e- banking opportunity.
Challenges and identify socio-economic factors that affect the e- banking system. However, in the
literature review nothing was indicated above the awareness and utilization of e-banking facilities at
all. Thus the researchers could focus on the knowledge and utilization of e-banking facilities. The
researchers could not get a research conducted on the level of knowledge (awareness) and utilization
of
e-banking facilities. But it does not mean that there is no any research conducted previously at all, it is
to mean that the researchers face limitation to accesses the previous researches on the mentioned
issues.
 Chapter three
Research method

In this chapter, research design, type and source of data, method of data collection, target group,
sample design and analysis and presentation of data was presented.

3.1. Research design

In order to achieve these study researcher used descriptive types of research design. Because, this
method enables the researcher describe summarizes and present. quantitative and qualitative data which
are important to achieve the objective of the study.

3.2. Type and source of data

In this study the researcher used primarily data. These primarily data was collected from primarily
source of data.

3.3. Method of data collection

The necessary data for this study purpose was collected through questionnaire. The questionnaire
contain both open- ended and close ended questions.

3.4. Target group

The target population for the survey study were customers of e-banking service in commercial bank of
Ethiopia in Aksum Hawelti branch. There are 15097 e-banking customers at Aksum Hawelti branch in
commercial bank of Ethiopia.

3.5. Sample design

In deciding the desired sample size, it is customary to consider the availability of time, resources and
aim of the research. In this regard, taking the available resources, time and budget in to account a
sample size of 99 was found to be feasible from the customer of e-banking in Aksum Hawelti branch of
commercial bank of Ethiopia. In the process of selecting the sample from population the researcher used
non probability or judgmental sampling techniques to get accurate and sufficient information for the
study area. In order to determine the sample size Yamane’s (1967) sampling size determination formula
is used.

This formula is used at 90% confidence level and at 0.1 level of significance.
 N

= 96.154 approximately 99
Where; n is the sample size

E is the level of significance and

N is the number of population

3.6. Method of data analysis and presentation

After the relevant data has been collected descriptive data analysis are held largely, the data was
obtained through questioner analyzed by table and percentages to facilitate, summarization and
effective data collection. Generally, most of the data will be collected in qualitative statement.
 Chapter four

Data presentation And Analysis

As it is discussed in the research method in this study data collected was analyzed in this chapter by
using table and percentages. A total of 99 questionnaires were distributed to judgmentally sampled
customers in Aksum Hawelti branch of commercial bank of Ethiopia and all 99 of questionnaires were
collected.

4.1 demographic information of respondents

The participants on the study questionnaire have different personal information be side these
difference they introduced different responses towards e banking knowledge and utilization. The
following discussion shows these difference. Table 4.1 The demographic information of
respondents.

No Variable Classification Frequency Percentage

of variable

1 Age 21-25 42 43.75

26-30 26 27

31-35 10 10.41

36-40 9 9.37

Above 40 9 9.37

Total 96 100

2 Gender Male 66 68.75

Female 30 31.25

Total 96 100
3 Occupation Farmer 0 0

Merchant 36 37.5

Student 30 31.25

Civil servant 22 22.91

Other 8 8.33

Total 96 100

4 Marital status Married 35 36.45

Au married 56 58.33

Divorced 5 5.3

Total 96 100

5 Educational Elementary 10 10.41

background school

Secondary 50 36.45
school

Degree
20 20.83
student

Degree
holder 16 16.6

total 96 100

Source: Questionaire,2017

According to table 4.1 43.75 % of respondents were found in the age of 21-25,27% of them were
in between 26-30,10.41% exist in 31-40 and the remaining is found in the age of 36-40 and
above
40 years, which cover9.37% for each. The next aspect of respondent is gender, from the total 96
respondents 68.75% were male and the remaining31.25% were females. Other aspect of
respondent is occupation in this 37.5% are merchant,31.25% are student,22.91% are civil servant
 and 8.33% are others.

The last two things from the table were marital status and educational background, so 36.45% were
married,58.33% were unmarried, on the other hand 42.75 were degree students,36.45% were
secondary school completed and 10.41% were elementary school completed and degree holder for
each.

From the demographic information things that can be generalized are, majority of respondents above
/80%/ of them are adults and above that, on the other hand 68.75% of customers are male the remain
31.25% female the other hand most (58.33%)of customers were unmarried,36.45% were married and
5.2% were divorced, and the majority of respondents relative to other were degree student( 42.7%)and
36.45 % of respondents were secondary school completed, and elementary school completed and
degree holder were 10.41% for each. This background is generally enabling them to adapt the
electronic banking facilities given in commercial bank of Ethiopia Debre Markos branch.

From this researcher can understand Debre Markos branch E-banking customers are adult and
educated this in turn may helpful for the bank to expand its services well.

4.2 Availability of E-banking facilities in the bank

table 4.2 types of account that customers hold and frequency that how often they visit the bank.

N Variables Frequency percentage

o

1 Saving account 56 58.4

Current account
40 41.6

Total 96 100
 2 Very often 22 23

Occasionally
74 77

Total 96 100

Source: Quesionaire,2017

According to table 4.2 above 58.4% of this study respondents are saving account holder and
41.66% are current account holders and from those 22.9% are visiting the bank very often and
77.1% visit the bank occasionally.

From the above table researchers can generalize that, majority of customers (58.4%) are saving
account holder, and from the customer majority are 74% visiting the bank occasionally.

Table 4.3 assessment of know how about the presence of E-banking facilities in the bank.

No Variables Frequency Percentage

1 Internet banking 12 12.5

2 Mobile banking 27 28.12

3 Electronic 57 59.37
transfer(ATM)

4 All(from 1-3) 0 0

Total 96 100

Source: quesionaire,2017

As it can be easily understood from table 4.3 above 59% of respondents know the existence of
ATM of CBE Debre Markos branch, then we can conclude majority of the customers are familiar
with ATM.
 TABLE 4.4 Utilization of E-banking.

No Have you utilize any of the Frequency Percentage

above table 4.3 services

Variables

1 a/ yes 92 95.83

b/ No 4 4.166

Total 96 1000

2 Which E-bonking facilities

that you are using?

a/ internet banking 0 0
b/ Automatic teller machine 66 68.75
(ATM)
12 12.5
c/ mobile banking
18 18.75
d/ both ATM and mobile
banking

Total 96 100

Source: questionnaire,2017

According to response given (table4.4)68.75% of Debre Markos branch customers are users of
visa card/ATM/.

Therefore, we can conclude that majority of customers are users of E-banking facilities available
at the bank especially visa card.

table 4.5 customer’s attitude to invite E-banking services to others.

 No Frequency Percentage

1 Would you recommend

to friend/relative to use
E banking of CBE?
45 46.87
a/ yes

b/ No 51 53.13

c/total 96 100

Source: quesionaire,2017

As it can be seen from the above table46.87%of respondents agreed or said yes to invite their friends
or relatives to use e banking service at CBE Debre markos branch.

From this figure the researchers conclude that the customers at the bank have pessimistic outlook
towards e banking facilities.

Table 4.6 position and availability of e banking facilities

No Are those facilities Frequency Percentage

exist in a suitable
position to use them?

A yes 17 17.7

B no 79 82.3

C total 96 100

Source: quesionaire,2017

The above table /table 4.6/ tells us that 82.29% of respondents said E-banking facilities are not in
suitable and proper position to use, due to these researchers recognize that customers are not
satisfied in E-banking facilities at the bank.

4.3 Customers knowledge about E-banking facilities

Table 4.7 customer’s awareness on E-banking facilities

No Frequency Percentage

1 Are you aware of these

facilities to use?

a/ yes 10 10.41
b/ No
86 89.59

2 How much do you know

about banking?

a/ a know it well 15 15.62

b/ I know something 68 70.83
about it

c/ I don’t know it at all

13 13.65
total
96 100

Source: qesionaire,2017

By referring table 4.7 we can see that majority of customers 89.58% have limited awareness of
E- banking to use and from all respondents 70.83% are known in medium extent abut E-banking
in general, from this the researchers generalize customers have limitation on awareness about E-
banking facilities to use and operate them.

4.4 Utilization of e- banking

Table 4.8 usage of E- banking facilities.
No Frequency Percentage
 Who operates the ATM machine
1
when you go to the terminal?
a/ my self 44 45.8
b/ some are around 52 54.2
total 96 100

Do you know that ATM machine

2
can be used to check account
balance? 30 30.2
a/ yes 67 69.8
b/ No 96 100
c/ total

Source: qesionaire,2017

From the table 4.8 we can see that most customers are unable to perform on the ATM machine alone
when they need service on it. This conclusion is made based on the respondents answer that majority
of them (54.2%) are said “someone around help me” when operate the ATM machine. The researchers
also can say the knowledge of customers on performing tasks what they need on ATM machine is
limited. on the other hand, 30.2% of respondents said we know that the ATM machine also show us
the balance we have using visa card therefore the researchers conclude that Limited no of customers
are aware on it. On the contrary 69.8 %respondents said I don’t receive text message on mobile from
those 27% of respondent’s reason is I am not applied for SMS banking Service

Table 4.9 Customers familiarity with E-banking and its efficiency.

No Frequency Percentage

1 On average would you say you are

familiar with E-banking

a/ yes 59 59.64
b/ No 39 40.63

Total 96 100
 Have you experienced a situation where
by your electronic card get stacked
when want access?

a/ yes
24 25
b/ No
72 75
total
96 100

Source: qesionaire,2017

Table 4.9 presents the fact that respondents give which is familiarity with e-banking in this issue
59.37% of respondent said I am familiar with e-banking from the same table (table 4.9 ) 75% of
respondents support the idea the ATM card/visa card/ never stack in the terminal(ATM) machine, Then
based on this figure researchers generalize ATM card has no problem /visa card/ never stack in the
terminal(ATM) machine, Then , based on this figure researchers generalize ATM card has no problem
in the process of using it.

Table 4.10 effectiveness of E-banking facilities

No Frequency Percentage

1 Do you experience break down /disable to do of

ATM when you want to use?

a/ yes
 b/ No 60 62.5

c/ neutrals 20 20.8

total 16 16.6

96 100

2 How satisfied are you with internet banking?

a/ very satisfied 20.83

b/ satisfied 22.91

c/ not satisfied 56.25

Total 96 100

3 How satisfied with electronic card /ATM/

a/ very satisfied 60 62.5

b/ satisfied 32 33.33

c/ not satisfied 4 4.66

Total 96 100

4 How satisfied with mobile banking

a/ very satisfied 20 20.83

b/ satisfied 25 26

c/ not 51 53.12

Total 96 100

5 How would you rate level of effectiveness of E-

banking of CBE Debre Markos branch?

a/ very effective 7 7.29

 b/ effective 31 32.3

c/ not effective 58 60.5

Total 96 100

6 Do you what challenges face with regard weak

a/ internet connection 61 63.5

b/ service provided in the staff is not satisfactory 15 15.6

c/ information gap about E-banking service 20 20.84

availability

Total 96 100

Source: qesionaire,2017

As it can be seen from the above table most respondents (62.5%) said the ATM machine is
unable to give service for us due to its inactivity from this fact the researchers concluded the
ATM machine is not giving its expected use for the customers in Aksum Hawelti branch.

On the other hand, 62.5% of respondents support the very satisfied option of ATM card. Then
fore researcher generalize that even though the ATM machine is not satisfactory (table 4.10)
customers are satisfied with introduction and using of ATM card.

The next thing shown from table 4.10 is mobile banking here 53.12% of respondents said not
satisfied with regard to mobile banking by other dimension from total respondents above 60%
are said the E-banking services given is not effective. This insufficiency is due to weak internet
connection (63.5%)

Generally, the researcher of this study conclude customers of Aksum Hawelti branch are not
satisfied by the E-banking services which have been given.
 CHAPTER FIVE

CONCLUSSION AND RECOMMENDATION

5.1 INTRODUCTION

- Information technology is considered as the key driver for changes takes place around the world
due to a pervasive and steadily growth of information and communication technology the world
bank in industry is entering in to new phenomena of unprecedented form of completion
supported by modern information and communication infrastructure under this circumstance
customers knowledge on timely up dated technologies that support the banking industry is vital
utilize it with this regard the chapter as a whole presents the concluding remarks for the main
findings in chapter four and important recommendation as per the main problems investigates in
this research study respectively

5.2 CONCLUSIONS.

Based on the analysis made on chapter four the following conclusions are made on the
assessment
of customer’s knowledge and utilization of E-banking facilities in CBE in Aksum Hawelti
branch.

- The most dominant E-banking channel services currently provided by the bank are
electronic transfer /ATM/ mobile banking, internet banking and post of sale /POS/
- Majority of customers in the bank are saving account holder
- The main practice of E-banking on this bank have been for balance enquiring, cash
withdrawal and fund transfers to others account.
-
 - The majority of customers are knowing the availability of E-banking facilities but they do
not use those of supplied facilities based on full capacity. For instance, there is internet
banking mobile banking and ATM services but customers are more or less do not use
them fully.
- - As per the finding customers lack knowledge and do not utilize internet banking.
- - E-banking service that are provided by the bank are not exist in proper and suitable
manner to use them. For example: - the distance of ATM Machine from place to place the
internet connection.

5.3 Recommendation

As per the finding from the analysis of the collected data the following recommendations are
forwarded in order to upgrade the customer’s knowledge, availability. Access, ability and
utilization of E-banking services offered by the bank.

- Recently E-banking technologies are growing time to time, then. it is important to the
bank, design a strategy and policy to expand E-banking facilities to those areas that do
not have accesses.
- Because of the e banking benefits are not limited to the bank, it is advisable that other
organizations collaborate with the bank to adopt e banking services and operate it.
- The bank should also create awareness to customers through different meanness like, teach
on conferences, distributing leaflet, use public media, post notice on public stations.
- The bank should strengthen its ICT department through providing training personnel.
- Banks that are currently providing the services should promote the system in order to raise
public awareness in the use of E-banking service.
- Since sufficient power supply is mandatory for the uninterrupted and efficient provision of
E-banking service, therefore ongoing effort by the government to address adequate power
supply to the country should be encouraged.
- The notional bank of Ethiopia should prepare various capacity building activities for banks
regarding e-banking operations and provide incentives for banks to invest rigorously on
ICT and use of E-banking. In general, the finding of this study offer additional insights to
other Ethiopian banks on the current e-banking adaption situation, distribution,
accessibility usage by customer and understanding on E-banking.
 REFERENCE

Book References

Tomatzky,G & Fleischer M .,(1990) the process of technology innovation , Lexington. MA,
Lexington book.

Turban. E., (2008) Electronic commerce: a managerial perspective, 4 th Edition, Prentice Hall.

Journal References

Furst, K and Nolle, D.,(2002) “ Internet banking developments and prospects”, are working paper
from office of the comptroller of the currency, administration of national books.

Gardachew,W.,(2010) Electronic banking in Ethiopia ; practices , opportunities and challenges;

journal of internet banking and commerce.

Iacovo.,(1995) “ adoption of E- banking in developing countries, university of Malasia Sabah,

Malasia.

Kamrul. M.,(2009) E- banking services , account services and closing “MTBiz School of
business
Bangladish.

Malak, J.,(2007) , Readiness of the platestiman, banking sector in adopting the electronic
banking system . MA this the Islamic University of Palestine.

Moles etal.,(1998) , “ Journal of internet banking and commerce, “ Bandera, Zimbabwe

Yang, y.,(1997) the security of electronic banking a research paper presented at the national
formation systems security conference U.S.A.
 Aksum University

College of Business and Economics

Department of Accounting and Finance

Questionnaire for customers

Introduction

This questionnaire is designed with the intention of collecting data in order to assess the
knowledge and utilization of E- banking facilities at CBE in Aksum Hawelti branch. the
researcher will be very grateful if you could provide answers to the questions. All information
provided will be used for academic purposes and as such, would be treated with confidentiality.

Instruction , please tick( ) or write where appropriate.

1 Age group of respondent.

A -25 B. 26- 30 C. 31- 35 D. 36- 40 E. 41-45

F. above 46

2. sex : A. Female B. Male

3. Occupation:

A. farmer B. Trader C. student d. civil servant

E. other

4. Marital status:

A. Married B. single C. Divorced

5. educational background:

A. primarily school B. Secondary school C. Degree student

D. Degree holder E. other

6. How long have you been with CBE?

 A. less than one year B. Between 1-3 years C. Between 4-6 years

D. Between 7-9 years E. above 10 years

7. what type of account do you hold with CBE?

A. saving account B. Current account

8. How often do you visit the bank?

A. Very often B. occasionally

9. Have you heard any of the following E-banking service available at CBE?

A. Internet banking B. Electronic transfer (ATM)

C. Mobile Banking D. If other, please specify it …………………………

10. Have you utilize any of the above mentioned services?

A. yes B. No

11. If yes which one?

A internet banking B. Electronic transfer(ATM}

C. mobile banking D. If other, specify……….

12. If No why?

A.I have not applied for it

B.I have applied for the service but have never enjoyed it.

C.I am not aware such services

D.IF any other specify it………………………….

13. would you recommend to a friend or a relative to use E-banking at CBE?

A. yes B No

14.If your answer on Question 13 is not what is your reason?

A. the service is not satisfactory

B. the operation is difficult to use.

C.I am not aware that much about the service.

D. if any other, specify it………………………

15. Are you aware of these facilities?

A. yes B. No

16. What do you know about E-banking?

A.I know it well

B.I know something about it

C. I don’t know at all

17. If you go to any electronic card terminal joint (ATM) to withdraw many or to check balance,
who operates the machine?

A. my self B. Someone around C. other D specify ………….

18. Are you aware that the ATM can also be used to check account bank?

A. yes B. No

19. Do you receive a text message on your mobile phone anytime there is a transaction

A. yes B. No

20. If your answer for question 19 is no, why?

A. I have not applied for SMS banking service

B. I have applied for the service but have never enjoyed it

C. I am not aware such a service

D. If any other specify ………. …………………

21. on average would you say you are familiar with E- banking?

A. Yes B. No
22. have you experienced a situation where by your electronic card gets stacked in the

terminal? A. Yes B. No

23. Do you experience frequently breakdown of ATM anytime you want access?
 A. Yes B. No

24. How satisfied are you with internet banking?

A. very satisfied B. Satisfied

C. not satisfied

25. How satisfied are you with electronic card (ATM)?

A. Very satisfied B. satisfied

C. not satisfied

26. How satisfied are you with mobile banking?

A. very satisfied B. Satisfied

C. not satisfied

27. How would you rate the level of effectiveness of E- banking at CBE in Aksum Hawelti
branch?

A. Very effective B. Not effective C. Not effective

28. What challenges do you face with regards to e-banking facilities in Aksum Hawelti branch?

A. weak internet connection

B. Service provided by staff member of the bank is not satisfactory.

C. Information gap about its availability in the bank.