Factors Affecting the Adoption and Use of Internet Banking In Tanzania

Abstract

This paper evaluates the use of Internet banking services in Tanzania. In surveying and evaluating selected bank websites in Tanzania, factors that affect the adoption and usage of Internet banking have been identified. The respondents were drawn from six (6) Banks in Arusha City using convenient and judgmental sampling. 284 surveyed questionnaires were distributed with five (5) instruments and nineteen (19) measurement items; only 275 were completed and collected for further analysis. The population of this study focused on potential bank customers who were internet users. Judgment and convenient sampling were employed to provide the information required. Data was analyzed using a combination of Web Assessment Index and the Structural Equation Model (SEM) method. The findings from surveyed bank websites and SEM show that ease of use, service quality, trust and transactional factors significantly affect the use of internet banking. The obtained findings provide useful insight for bank managers in developing appropriate marketing strategies to meet customer satisfaction and will assist both practitioners and academicians in doing future empirical research to understand better common factors for both users and banks as all of them are key players in the success of internet banking services.