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Value of E-Banking to Small and Medium-Sized Enterprises

Author

Listed:
  • Parveneh Shahnoori

    (Eastern Mediterranean University, North Cyprus)

  • Glenn P. Jenkins

    (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)

Abstract

Policy makers in many countries encourage small and medium-sized enterprises (SMEs) to become more engaged in international trade activities. A complementary element to international trade is access to low-cost banking services. For policy makers and bank regulatory agencies it is important to know the value that SMEs place on alternative types of online banking services (e-banking). Using a choice experiment and a mixed logit model, we evaluate the value to these businesses of attributes of online banking, namely travel time saved, waiting time saved, unlimited 24/7 accessibility, and a high level of security. From this analysis an estimate is made of the willingness to pay for alternative packages of such services used by the SMEs in the United Arab Emirates free-trade zones. The results of this research show that 24/7 accessibility to banking services and a high level of security are statistically highly significant and valuable to these enterprises.

Suggested Citation

  • Parveneh Shahnoori & Glenn P. Jenkins, 2015. "Value of E-Banking to Small and Medium-Sized Enterprises," Development Discussion Papers 2015-09, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:281
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    More about this item

    Keywords

    willingness to pay; online banking; SME; free-trade zone; mixed logit model;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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