Examining the Effects of Digital Lending on Revenue Growth of the Banking Sector in Tanzania

Abstract

This research casts a spotlight on the transformative effects of digital lending on revenue growth in the banking sector with a special focus on the Stanbic Bank Arusha Branch. The study is specifically tailored to assess the extent of digital lending adoption at the branch, examine its impact on revenue growth and investigate the challenges associated with its implementation in the banking sector. Rooted in the Digital Lending Theory, this study navigates the transformative wave of technology in lending, offering a bridge over the informational asymmetries and constraints innate in traditional credit systems. The study engages a mixed-methods approach, weaving together quantitative and qualitative data, to give a rounded view of this contemporary banking phenomenon. The total population that was taken into consideration is 137 which will be narrowed down to a sample size of 102 obtained from Yamane’s formula. The study applied stratified random sampling to gather well-rounded insights. Data collection was spearheaded by questionnaires and interviews, a review of pertinent documents supplements this primary data, offering a historical and contextual lens through which the evolution and impacts of digital lending at the bank can be viewed. The findings of the study revealed that there is a significant majority of customers are aware and actively using the bank's digital lending services , digital lending significantly impacts revenue growth and highlights several implementation challenges that include technological , regulatory and security concerns .The study was concluded positively since there was a significant contribution to the bank's revenue growth indicating the bank's successful integration of digital lending services that enhance customer accessibility and convenience .Recommendations include enhancing customer support and education programs ; innovation and optimization of offerings, streamline processes, offering of competitive rates ; investing in robust technological infrastructures and enhancing cybersecurity measures