Determinants of Digital Banking Utilization in Addis Ababa: A Structural Equation Modeling Approach
- Publication History
- Published online: September 19, 2026
- DOI
- https://doi.org/10.35877/454RI.qems4633
- Copyright
- Copyright (c) 2026 Abebe Tilahun Kassaye
- User License
- https://creativecommons.org/licenses/by-nc-sa/4.0
Abstract
The rapid expansion of internet connectivity and mobile technologies has positioned digital banking as a core platform for financial transactions globally. In Ethiopia, regulatory reforms and national initiatives such as Digital Ethiopia 2025 and the National Financial Inclusion Strategy have accelerated adoption. However, empirical research on digital banking utilization remains limited. This study aims to examine the key factors influencing digital banking adoption in Addis Ababa using the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2).
The study employed a quantitative, cross-sectional research design. Primary data were collected through a structured survey administered to 405 digital banking users in Addis Ababa. The UTAUT2 framework guided the model specification, and Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to test the hypothesized relationships between adoption determinants and digital banking utilization.
The results indicate that facilitating conditions and price value are the strongest predictors of digital banking adoption, highlighting the importance of infrastructure readiness and affordability. Performance expectancy and social influence also have a significant positive effect on usage behavior, suggesting that perceived usefulness and normative pressures play an important role. In contrast, effort expectancy was found to be insignificant, implying that ease of use is no longer a critical barrier for urban users.
The study extends by contextualizing the UTAUT2 model within Ethiopia’s emerging digital banking environment. It provides empirical evidence practical insights for policymakers, banks, and technology providers aiming to strengthen digital financial inclusion and accelerate the transition toward cashless financial services.
Keywords
References
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