Determinants of Users Trust for Branchless Banking in Pakistan

To capture the unbanked population, cellular companies in partnership with microfinance institutions/banks are offering branchless banking initiatives in the market. This trend is building competitive environment in banking sector. Current study aims to investigate the effects of service quality, system quality, reputation, structural assurance, perceived credibility and perceived financial cost on Users’ Trust in branchless banking. Primary data was collected through a self-administered questionnaire from 120 undergraduate level students of a university in Pakistan. Hierarchical multiple regression analysis was run for hypotheses testing. The study concluded that service quality, system quality, reputation and perceived credibility exert significant positive effects while perceived financial cost exert significant negative effect on Users’ Trust. However, study could not prove a significant effect of structural assurance on Users’ Trust. Results also indicate that 40.9% of the variation in Users’ Trust in branchless banking can be accounted for by the respective changes in all six independent variables. Recommendations and limitations are also discussed in the study.