Adoption of Mobile Banking and Its Effect on Saving Practices The case of Customers of Commercial Bank of Ethiopia: Dire Dawa Cluster

Digital finance is one of few areas where there has been a real revolution in services and leap frogging over deficient traditional infrastructure. Hence, mobile banking services have greatly transformed the financial inclusion landscapes in developing countries where majority have high inaccessibility to formal financial services. This study aimed to identify the effects of mobile banking services on saving habits of customers of Commercial Bank Ethiopia Dire Dawa cluster. It used both primary and secondary data sources. Two stage sampling technique was employed to select sample respondents. First five CBE bank branches will be selected out of nineteen branches in the cluster area randomly. The 385 samples are also distributed to five branches based on probability proportion to sample size. It employed both descriptive statistics and econometrics method of data analysis. The result of chi-square tests indicated that mobile banking saving adopter customers were mainly found to be male, the cross tabulation result shown that the most mobile banking service adopter are age group between 26-35,the least adopter age group are above age of 55.The age of respondent is found to be statistically significant to differentiate the adopter and non-adopter at less than 10% probability level. Furthermore the result of the study revealed that degree holder were highly adopted the mobile banking service and illiterates were the least adopter. the Binary Logit model parameter estimated to determine the likelihood of adopting mobile banking services and perceived transaction cost were negatively related while age, monthly income, perceived usefulness, perceived easy to use, perceived credibility, perceived self- efficacy and technology awareness were positively correlated. Moreover, the OLS model was estimated to show the effect of mobile banking usage on saving practice of the customers, in which mobile banking services adoption, having Master degree, monthly income, influenced amount of saving in the bank positively and significantly. The bank should make their mobile banking as simple and easy to use as possible so that customers do not perceive them as being complicated or difficult to use. Although saving is not yet common practice in Ethiopia generally and particularly in Dire Dawa. CBE have to v work hard in mobile banking service because the estimated effect of mobile banking adoption on saving practice of customers indicated that mobile banking service usage have positive and significant effect.