Agency banking: a tool for economic empowerment of small and medium women entrepreneurs in Nakawa division, Kampala district
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In Uganda, just as in many other developing countries, there are various inequalities that take the form of women traditionally not having access to education, capital, employment and owning land (USAID, 2015). These inequalities do not only make women more vulnerable to poverty, but also prohibit women’s participation in economic, social and political life (UNDP, 2014). The recognition of financial services is an integral part of women empowerment; however, traditional banks or other financial institutions have not been willing to provide basic financial services such as a saving or transaction accounts to the poor due to high transaction costs and too low margins (Todaro and Smith, 2011). Evidence shows (Kitaka 2001, Wainaina, 2011) shows that the operation of banking agents relieves the commercial banks from attending long queues at their branches and, therefore, increases the convenience of serving their customers at the same time creating employment opportunities for those willing to engage in agency banking business. This research therefore aimed at establishing the linkage between agency banking and empowerment of women entrepreneurs in small and medium enterprises. This study adopted a survey method to collect the data and information from participants accessing and using agency banking services to make financial transactions. While the interview method was used to gain an understanding of women inclusion in small and medium entrepreneurship businesses in addition to exploring the challenges faced by women in the same business. The study revealed that all agency baking users find the services in the radius of two kilometres away from their place of operations with female participants finding these services in closer proximity compared to menthe male counterparts. The findings also revealed that agent banking gives an opportunity to women to control their financial transaction which ultimately leads to increased income through increased entrepreneurial activities. The study revealed network-related challenges and lack of liquidity/float as the major challenge experienced in operating and using agency banking businesses and the effect is far reaching to women who frequently utilize agency banking services more than men but also have limited mobility based on the social cultural factors. The other challenges included non-compliance of clients to the transaction requirements, bureaucratic processes of loading float (e-cash) from the line banks, inconsistencies in transactions, ignorance and arrogance of some customers, competition from other financial institutions that provide similar services (e.g. Mobile money), exposure to security risks as well as increased fraudsters circulating counterfeits. All these greatly limit many women from accessing.