Determinants of Digital Banking Utilization in Addis Ababa: A Structural Equation Modeling Approach
DOI:
https://doi.org/10.51137/wrp.ijmat.755Keywords:
Digital Banking, UTAUT2, PLS-SEM, Addis Ababa, EthiopiaAbstract
The growth of mobile technology positioned digital banking as a crucial platform for financial transactions globally. In Ethiopia, regulatory reforms like Digital Ethiopia 2025 and the National Financial Inclusion Strategy have accelerated the adoption of digital financial services. However, research on the factors driving digital banking use remains limited, particularly in urban contexts such as Addis Ababa. This study investigates the determinants of digital banking utilization in Addis Ababa using the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2). Employing a quantitative, cross-sectional design, data were collected from 405 digital banking users through a structured survey. Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied to evaluate key adoption factors and usage behavior. Results reveal that facilitating conditions and price value are the strongest predictors of digital banking adoption, highlighting the importance of infrastructure readiness and service affordability. Performance expectancy and social influence also positively affect usage, reflecting the role of perceived usefulness and social encouragement. In contrast, effort expectancy has no significant effect, suggesting that ease of use is no longer a barrier for urban users. These findings offer actionable insights for policymakers, banks, and technology providers to enhance digital financial inclusion and promote a cashless economy.
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