The impact of mobile money on digital financial inclusion in Uganda

Abstract

This study investigated the role of mobile money in promoting digital financial inclusion in Uganda. A quantitative design was adopted for the study and secondary data collected under the FinScope Consumer Survey of 2023 was utilized. The findings highlight several key determinants of digital financial inclusion, focusing on the influence of distance, education, gender, location, and region. A correlation analysis revealed negative correlations between digital financial inclusion (DFI) and distance to mobile money agents, gender, area and region Conversely, a positive correlation was found between education and DFI. Linear regression analysis shows that distance to agents significantly affects DFI (coefficient = -0.074, p-value < 0.001), indicating that increased distance reduces the likelihood of mobile money adoption. Education is positively correlated with DFI (coefficient = 0.081, p-value < 0.001), while marital status (coefficient = -0.058, p = 0.001), gender (coefficient = -0.118, p-value < 0.001), area (c coefficient = -0.087, p-value < 0.001), and region (coefficient = -0.088, p-value < 0.001) present significant barriers to inclusion. The model accounts for 13% of the variance in DFI (R² = 0.130), confirming the complex interplay of geographic and demographic factors in shaping digital financial inclusion. Overall, the study underscores the importance of proximity to financial agents, education, and addressing regional inequalities in enhancing financial inclusion in Uganda. The study recommends that efforts should be made to increase the number of mobile money agents in rural and remote areas to reduce the distance to agents. This could involve partnerships with local businesses to serve as agents or providing incentives to telecom companies to expand their networks.