An Assessment of the Effectiveness of Agency Banking Interventions in Deepening Financial Inclusion: A Case Study of Centenary Bank Uganda (Published)
This study assesses the effectiveness of the agency banking interventions in deepening financial inclusion in Uganda. The study employed a descriptive research design and purposively collected data from 50 Bank customers and staff of Centenary Bank Ltd. in Kampala District. The data was collected using a self-administered research instrument with an overall Cronbach’s reliability coefficient of 0.775 and was analysed using frequency analysis and the p-value approach. The study findings provided evidence that the following agency banking interventions: i) Providing information and ensuring that the excluded were informed about bank products and services, ii) Improving access to formal financial services for poor individuals by introducing delegated credit products to the existing savings groups with complimentary savings accounts. iii) Providing loans to savings groups later benefit individuals within the groups. iv) Encouraging the public to have personal contact with bank agents to obtain information about the banking system. v) Dispelling the myth that banks only exist for the rich had a statistically significant effect (p < 0.05) in deepening financial inclusion in Uganda. However, the agency banking intervention of using the electronic delivery of services to enhance service delivery to people with low incomes in rural areas did not significantly deepen financial inclusion in Uganda. The challenges agency banking faces in deepening financial inclusion in Uganda include unstable networks, liquidity problems, delayed or inadequate communication in case of failed transactions, cash shortages during periods of peak demand, the minimal role of bank agents, and fraud issues on the part of bank agents. It is recommended that the visibility of the agency banking outlets should be enhanced, banks should sensitize the public about agency banking, digital skills, and financial literacy, reduce the state public administration expenditure and channel the savings into infrastructural development in the rural electrification and connectivity improvements areas to enable enhanced delivery of electronic service systems in rural areas, banks in Uganda should closely work with the telecommunications companies for more reliable and stable networks that would guarantee improved delivery of agency banking services, the telecommunications companies should carry out more aggressive marketing campaigns to improve the telephone density in the country, people with adequate financial resources should be appointed as bank agents, comprehensive training in areas of business planning and management to the prospective bank agents before they are formally appointed, monitor the activities of the bank agents on a regular basis, and more due diligence should be exercised when appointing bank agents to avoid agents with questionable backgrounds.
Keywords: Agency banking, Centenary Bank, Financial Inclusion, Uganda, bank agents, interventions
Evaluation of The Nexus Between Financial Inclusion and Economic Growth in Nigeria (1980-2020) (Published)
The focus of financial inclusion is the easy access of financial services to the populace to tackle poverty, improve living standard and address the general welfare of the people for the purpose of enhancing economic growth. This paper examines how financial inclusion relates with economic growth in Nigeria. Data was obtained from the bulletins of the Central Bank of Nigeria covering the period 1981 to 2020. Statistical analysis involves the use of descriptive statistics, Johansen Co-Integration Test, Phillips-Perron Unit Root Test, Pairwise Granger Causality and Error Correction Model. To estimate the hypotheses formulated in alignment with the set objectives., the Error Correction Model was used. Economic growth, the dependent variable, was proxied by Gross Domestic Product, while total bank deposit and total credit disbursement constitute what was used to proxy the independent variable financial inclusion. The Error Correction Model result shows that there was a positive and statistically significant relationship between total bank deposit and gross domestic product. Total credit disbursement has a negative and an insignificant relationship with gross domestic product. The result from the study validates the finance led growth hypothesis and established that finance is one of the factors that causes economic growth in Nigeria. The consequence of this findings is that policy makers should pay more attention on long run financial policies that can enhance effectiveness of the financial sector in promoting growth. In addition, the CBN should focus on reduction of interest rate of banks in other to increase financial intermediation.
Keywords: Financial Inclusion, Financial exclusion, Loan, economic growth, total bank deposit
National Identity Ownership and Financial Inclusion in Uganda (Published)
Ownership of a unique and legal identity is crucial for financial inclusion in Uganda as majority of financial service providers demand a national identity (ID) to satisfy the KYC (Know your customer) requirements. This study attempts to examine the effect of ownership of a national ID on financial inclusion in Uganda. The study utilizes the 2017 World Bank Global Findex data and finds that national ID ownership is statistically significant in predicting the likelihood of being financially included in Uganda. With 95% confidence, national ID ownership, phone ownership, education, income quintile, and employment status significantly predict the likelihood of being financially included in Uganda. The study further reveals that an individual who owns a national ID and owns a phone, has secondary school education, is in the richest 20% income quintile, and is in the workforce is more likely to be financially included compared to the same individual without a national ID although the result is not statistically significant. Generally, the study argues that Uganda can boost financial inclusion by harnessing ID ownership among the financially excluded. The study recommends that national ID ownership policies should be integrated with other policies such as human capital development, income equality, employment, and increasing phone ownership in order to achieve efficient outcomes.
Keywords: Financial Inclusion, Socio-Economic Factors, global findex database, identification for development global dataset, national identity ownership