The effects of plastic money in the performance of microfinance banks in Harare urban

Abstract

The main aim of this investigation was to determine the effects of plastic money in the performance of microfinance banks in Harare Urban. The objectives of the study were to identify the effects of plastic money on long-term profits, if plastic money address liquidity crisis, best practises that can be adopted in managing revenue and the factors affecting the use of plastic money. The study utilised a descriptive research methodology in carrying out a research which incorporates a quantitative approach. The sample comprised of forty (40) respondents. Data was gathered using the questionnaires. This data was presented and analysed using tables, graphs and pie charts. The statistical package utilised for regression analysis was the SPSS 2019 and the independent variables were mobile payment, money transfer, mobile financial service, online payment and point of sale and performance was the dependent variable of the study. The statistical package showed that there is a positive correlation between plastic money and performance of 0.9801.The research findings showed that technological advancement, transaction cost, lack of confidence and resistance to change are the major determinants of plastic money that has a greater impact on the long-term profits. Utilisation of plastic money has a greater contribution in lessening the liquidity crisis by guaranteeing that interest for hard cash is reduced and changes of exchange rates are resolved. The researcher recommended that there is need for empowerment and campaign programs for plastic money to be accepted in rural areas and also microfinance banks in Harare Urban should make arrangements with shopping centres so that customers can easily use plastic money.