The role of mobile money in enhancing access to finance for female-owned SMES in Uganda.

Abstract

Access to finance remains a critical barrier to the growth and sustainability of small and medium-sized enterprises (SMEs). This is particularly for those owned by women in developing economies like Uganda. This study assesses the role of mobile money in enhancing access to finance for female-owned small and medium enterprises (SMEs) in Uganda. Despite the significant growth of mobile money services, female entrepreneurs often face barriers in accessing formal financial services, limiting the growth potential of their businesses. Using a sample of 300 female participants drawn from the Fin scope dataset, this research employs stratified random sampling and logistic regression analysis to identify key factors influencing access to finance (ATF). The results show that only 34.67% of the respondents had access to finance, with significant determinants being proximity to mobile money services, saving electronically, and awareness of digital loans. Women living closer to mobile money services (within one kilometer) had a 48% higher likelihood of accessing finance compared to those farther away. Additionally, those who saved electronically had 68% higher odds of financial access, while awareness of digital loans increased access by 53%. These findings underscore the critical role mobile money plays in improving financial inclusion for female-owned SMEs. The study concludes that expanding mobile money infrastructure, promoting digital savings, and enhancing financial literacy on digital financial products are essential strategies for fostering financial access among female entrepreneurs in Uganda. This research offers policy recommendations to improve financial accessibility and support the growth of female-owned SMEs through mobile money platforms. Key Words: Mobile money, Access to finance, female owned SMEs