Evaluating the Impact of Self-Service Cash Deposit Machines on the Performance of Commercial Banks in Tanzania.

Abstract

This study aims to evaluate the impact of utilization of self-service cash deposit machines (SSCDMs) on the financial performance of Tanzanian commercial banks, focusing on key parameters like capital adequacy, asset quality, management quality, earning ability, and liquidity. The research, conducted over six years (2017–2022), utilizes a CAMEL analysis and combines secondary data review with primary data collected through interviews. Four commercial banks’ audited financial statements serve as the primary data source. The findings indicate a mixed impact of SSCDM utilization on bank performance, with some banks experiencing positive effects on capital adequacy and liquidity ratios, while others show performance fluctuations. Overall, SSCDMs are found to enhance operational efficiency and convenience, attracting more customers and increasing deposit volumes. However, potential liquidity management challenges are noted. This study contributes valuable insights to the evolving Tanzanian banking sector, aiding policymakers and bank management in informed decision-making regarding self-service banking technologies.