Determinants of financial inclusion in Uganda: evidence from Makindye division.

Abstract

The study investigated the determinants of financial inclusion in Uganda focusing on the area of Makindye division. The study aimed at examining the determinants of financial inclusion in Makindye Division. To analyze the barriers of financial inclusion in Makindye Division and to suggest strategies to improve the level of financial inclusion in Makindye Division. A descriptive case study design was adopted. The study employed both quantitative and qualitative data collection approaches. A sample size of 222 respondents was selected and the response rate was 191 respondents (86%). Purposive sample technique was used to select members on which the researcher relied on his own judgment when choosing members of the population to participate in the survey. Quantitative data analysis mainly consisted of descriptive statistics (mean, standard deviation and percentages). Also, narrative analysis was used to analyze qualitative data. Findings revealed that financial inclusion also improves banks performance as it reduces huge savings on cost of construction of bank premises and leasing costs than when banks are using the Agency premises. It also cuts on human resource expenses. Bank accounts and deposit accounts, for instance, can help individuals and households stabilize their consumption, manage their cash flows, accumulate savings, and meet their own working capital needs. The right credit products can support personal and family projects as well as provide entrepreneurs with the capital to expand their businesses, build assets, and increase productivity. The study further revealed that the introduction of financial inclusion is intended to enable institutions to provide banking services more cost effectively to customers showing the impact of the model to the institution and the customers. It can further be concluded from the findings that that financial inclusion requires adequate resources like the existing infrastructure and the finances, hardware, software, materials, staff and support structures of the Bank The study recommends that the commercial banks should reduce the period of obtaining the legal documents in opening accounts and obtaining other financial services. The government should promote the system more frequently and decrease the expense of compliance, registration bureaucracy and high tax costs, among other recommendations.