Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) Vol. 3(9) pp. 432-440, September, 2014 Available online http://garj.org/garjmbs/index.htm Copyright © 2014 Global Advanced Research Journals Full Length Research Paper Factors Affecting the Intention to adopt Internet Banking Services among Small and Medium Sized- Enterprises in Yemen Nabil Hussein Al-Fahim 1 , Wan Jamaliah Wan Jusoh 2 , Adewale Abideen 3 1 PhD student, Business Administration, KENMS, IIUM 2 Department of Business Administration, KENMS, IIUM 3 Assistant Prof. Dr., Department of Finance, KENMS, IIUM Corresponding author Email: nalfaheem@yahoo.com Accepted 03 June 2014 In spite of the wide adoption of Internet banking service in developed countries, its application is still low in developing countries like Yemen. The purpose of this study is to examine and investigate the main factors which influence the adoption of Internet banking services by Small and Medium Enterprises (SMEs) managers or owners in Yemen. The research framework consists of five latent variables, four exogenous variables and one endogenous variable. The exogenous variables consist of environmental factors such as ICT readiness, regulatory support, financial institution support and competitive pressure while endogenous variable comprises of intention towards Internet banking service adoption (IBSA). In addition, this study will explain how the Technology Organization Environment (TOE) framework was being used in examining the factors of Internet banking services adoption in Yemen. The hypothetical relationship was examined using structural equation modeling (SEM). The findings of the study indicated that competitive pressure was the high predictor that influence towards IBSA followed by regulatory support and financial institution support while ICT readiness was an insignificant and negative effect towards IBSA in Yemen. Keywords: Internet Banking Services Adoption (IBSA), Environmental factors, TOE framework, SMEs, Yemen. INTRODUCTION Internet Banking Service (IBS) is extremely beneficial to both banks and customers. The main benefits to banks are cost savings, reaching new segments of the population, efficiency, enhanced reputation and better customer service satisfaction (Nasri, 2011; Khrerwesh, 2011). IBS also offers a competitive advantage to banks by providing an unlimited distribution network. Through this technology, banks are able to provide services electronically such as lowering transaction costs and adding value to the customer-banker relationship. Internet enables banks to offer high value-financial services at lower costs (Al-Sukkar and Hasan, 2005). Unfortunately, in spite of all these advantages, many customers of financial institutions have yet to embrace