Factors Influencing the Intention to Adopt Internet Banking Services among Small and Medium Enterprises (SMEs) in Yemen

Abstract

Despite the wide adoption of Internet banking service in developed countries, its application is still low in developing countries like Yemen. Moreover, there is a dearth of empirical research on Internet banking services in Yemen and this makes it necessary to carry out research on the adoption of Internet banking service. The aims of this study is to examine and investigate the main factors that influence the adoption of Internet banking services by Small and Medium Enterprise (SME) managers or owners in Yemen. The research framework consists of nine exogenous variables and one endogenous variable. The exogenous variables consist of attitudinal and environmental factors while the endogenous variable comprises of intention towards Internet Banking (IB). This research also identifies the role of demographic factors (size, type and ownership of organization) as moderating variables that impact on SMEs’ intention to adopt Internet banking service in Yemen. In addition, this study explains how the Technology Acceptance Model (TAM) with Technology Organization Environment (TOE) framework used in examining the factors of Internet banking service adoption among SMEs in Yemen. The sample of the present study consisted of a total of 311 SMEs, analyzed using Structural Equation Modeling (SEM) in order to examine causal relationships among the study latent variables. The indirect exploratory effect of the moderators is examined using Multiple-Group Analysis (MGA). The results of the study indicate that perceived usefulness, ease of use, regulatory support and competitive pressure have significant and positive effect on intention towards IB adoption among SMEs in Yemen. However, perceived trust, risk and ICT readiness have no significance, only negative effect on intention towards Internet banking. Awareness and financial institution support are also not significant but have positive influence towards IB adoption. Furthermore, the findings of the study reveal that type of organization has a moderating effect on managers/owners intention towards IB adoption among SMEs in Yemen. On the other hand, size and ownership of organization are not significant moderators on managers’/owners’ intention towards IB adoption. It can be concluded that a combination of TAM and TOE framework explains IB adoption factors well among SME managers/owners in Yemen.