Effect of Digital Banking Technology on Loan Uptake in Hotels Industry in Kenya

Abstract

Digital banking technology is having a profound impact on businesses and corporate borrowing behavior. Integrating digital banking technology and its impact on hotel borrowing is a critical challenge. Limited digital literacy, uneven technology adoption and inadequate regulatory support prevent hotels from reaping the benefits. This study is based on three theories: the technology acceptance model, Institutional theory and the resource-based verification theory. This study uses literature review methodology to draw analysis and conclusions. Studies suggest that these technologies have democratized access to credit, empowered previously underserved populations, and improved financial inclusion. However, alongside these benefits, criticism of the literature also reveals ongoing concerns. These include questions of digital literacy, data security and the possible exclusion of marginalized groups. Additionally, questions arise regarding the effectiveness of digital lending platforms in accurately assessing creditworthiness and managing associated risks that may impact credit quality and overall financial stability. Although digital banking technology offers opportunities to expand access to credit, it is important to address these challenges to ensure equitable and sustainable financial inclusion outcomes. The study concludes that by leveraging the potential of mobile banking, digital payment systems and online lending platforms, hotels can more effectively address financial challenges and seize opportunities for sustainable development and success in the dynamic business landscape.