Effects of Banking Innovation on the Financial Performance of Commercial Banks in Somalia (original) (raw)

The study focused on effect of banking innovations on financial performance on commercial banks in Mogadishu, Somalia. Commercial banks will continue to use huge investments in technology based on innovations and training of manpower to handle new technologies. The main objective of this study will establish the effects of bank innovations on the financial performance of commercial banks in Somalia. Descriptive research design was employed in this study. The target population for this study will be at two levels. The first target population will be at institutional level where the study targets 6 licensed commercial banks in Somalia. The second level of target population will be senior management employees of the 44 commercial banks in operation in Somalia, from which a sample size of 83 was selected. The findings revealed that bank innovations influence income, return on assets, profitability and customer deposits of commercial banks in Somalia and tests for significance also show that the influence will be statistically significant. Basing on the findings of the study, it was concluded that bank innovations influence financial performance of commercial banks in Mogadishu positively. It was therefore recommended to the management of commercial banks and the Government to continue to explore and implement sustainable business linkages and collaborations with mobile phone service providers as well as the internet service providers as a way of accelerating the penetration of innovations and eventually creating desire impacts in the economy.