120 International Journal of Academic Research in Accounting, Finance and Management Sciences Vol. 8, No.4, October 2018, pp. 120–130 E-ISSN: 2225-8329, P-ISSN: 2308-0337 © 2018 HRMARS www.hrmars.com To cite this article: Muthoka, N. I., Oluoch, O., Muiruri, P. M. (2018). The Influence of Branchless Financial Innovation on Market Capitalization of Commercial Banks Listed in NSE, Kenya, International Journal of Academic Research in Accounting, Finance and Management Sciences 8 (4): 120-130. http://dx.doi.org/10.6007/IJARAFMS/v8-i4/5469 (DOI: 10.6007/IJARAFMS/v8-i4/5469) The Influence of Branchless Financial Innovation on Market Capitalization of Commercial Banks Listed in NSE, Kenya Nicodemus Itivi Muthoka 1 , Oluoch Oluoch 2 , Paul Munene Muiruri 3 1,2 Department of Business Administration, Jomo Kenyatta University of Agriculture and Technology, 1 E-mail: nicodemusmuthoka@gmail.com (Corresponding author) 3 Department of Business Administration, Management University of Africa, Kenya Abstract The study sought to evaluate the impact of Branchless financial innovation on Market capitalization of listed Commercial Banks in Kenya. Financial sector in Kenya has experienced a noteworthy change over the most recent years. Numerous new increasingly proficient and constant financial processes and products have come into place. In spite of the unquestionable significance in innovation, its impact on investor value isn't constantly clear since there are reported instances of negative relationship between innovations and Performance. The objective of this study was to establish the impact of branchless financial innovation on market capitalization of the Kenyan listed commercial banks. The study targeted the 11 NSE listed commercial banks in Kenya as at 31st December 2017. A census survey was adopted as its sampling design. The primary data was collected from 8 key bank officials in each bank in Finance and operations departments who dealt with financial innovations. The data obtained was cleaned; coded and statistical outputs generated using SPSS version 24 statistical packages. Descriptive and inferential analysis was employed to analyze the data where Pearson’s and regression analysis were used. The findings revealed that Branchless banking innovation had a statistically significant effect on the market capitalization of the listed commercial banks in Kenya. Based on the findings of the study, it can be concluded that Branchless banking financial innovation influence market capitalization of listed commercial banks in Kenya strongly and positively. It is therefore recommended that policy makers of commercial banks who are mainly the Government and the management, to embrace Branchless banking financial innovation and encourage customers to use them. This study did not exhaust all financial innovations as the branchless banking only accounted for 54.3% and therefore, a further study is recommended to include other financial that account for the remaining 45.7% and again a comparative study should be done using secondary data as this study focused on primary data. Key words Branchless banking, market capitalization, Nairobi Security Exchange, financial innovation Received: 09 Ian 2019 © The Authors 2018 Revised: 09 Feb 2019 Published by Human Resource Management Academic Research Society (www.hrmars.com) This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non- commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode Accepted: 15 Feb 2019 Published Online: 23 Feb 2019 1. Introduction Branchless banking financial innovation has been defined to be the process of performing banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (Boston Consulting Group, 2009). Financial innovation has been defined to be technological innovations which has a big influence on the pricing model, in the market share, in the company’s revenue (OECD, 2011) while Nofie (2011) defines innovation as the entrance of a completely new and better produce and/or a method that lowers the price of executing existing financial services. In the finance industry, innovation is seen as the process of making and promoting new instruments, technologies, institutions and markets in the finance