European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Uganda

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

Operational Budgeting and Procurement Performance among Manufacturing Firms within Jinja Industrial Hub in Uganda (Published)

Ineffective operational budget management negatively affects manufacturing firms’ procurement performance. This paper investigates the impact of operational budgeting on procurement performance among manufacturing firms within the Jinja industrial hub in Uganda. A self-administered research instrument was used to collect the data on the operational budgeting variables of budgeting approaches, budget reviews, budgeting ethics, and expense forecasts. The study adopted a survey-based approach and a stratified simple random sampling technique to collect the data from a sample of 97 manufacturing firms within the Jinja industrial hub in Uganda. The data quality control was ensured by establishing the research instrument’s internal consistency that yielded an overall Cronbach’s reliability coefficient of 0.80. Correlation analysis and regression analysis techniques were applied to analyze the data. The study revealed significant positive correlations (p < 0.01) between all the variables of operational budgeting and procurement performance of manufacturing firms within the Jinja industrial hub in Uganda. The multiple regression analysis results indicated that R2 = 29.5% and Adj.R2 = 25.9%. Furthermore, for the whole multiple regression analysis model F(4,80) = 8.357, p < 0.001, which signified that there was a significant impact of operational budgeting on procurement performance among manufacturing firms within the Jinja industrial hub in Uganda. The authors recommend that manufacturing firms should emphasize organizational goal attainment, practicability, cost reduction, and resource allocation efficiency when choosing budgeting approaches. Additionally, operational budgeting should be prioritized by manufacturing firms the same way as capital budgeting.

Keywords: Jinja industrial hub, Manufacturing Firms, Procurement Performance, Uganda, operational budgeting

Corporate Governance and Commercial Banks’ Performance in Uganda (Published)

More than ten commercial banks have collapsed in Uganda in the last two decades due to problems such as frauds, insider lending by dominant shareholders, weak boards of directors, non-performing loans portfolios, and managerial opportunism. This paper aims to investigate the impact of corporate governance on commercial banks’ performance in Uganda. The study adopted a survey-based approach to purposively collect data from the respondents of all licensed commercial banks in Uganda at the time of the study.  Data was collected using a self-administered research instrument on the most emphasized corporate governance variables of board composition, board size, capital adequacy ratio, and the independent audit committee for the performance of banks. The data quality control was ensured by establishing the internal consistency of the research instrument that resulted in an overall Cronbach’s reliability coefficient of 0.78. The data was analyzed using hierarchical multiple regression analysis statistical technique after controlling for bank size and leverage. Using an alpha level of 0.05, the study found that the change in R-squared was 27.9% with a non-significant change in F (4,14) = 1.64, p = 0.219. Secondly, for the whole model F (6,14) = 1.587, p = 0.223 which signified that was no significant impact of corporate governance on commercial banks’ performance in Uganda while controlling for bank size and leverage. In order to improve bank performance in Uganda, the central bank should step up the supervisory and regulatory policies. This would involve proactive strategies such as regular review of corporate governance instruments like the Financial Institutions Corporate Governance Regulations (2005) so as to counteract any new threats to the banking sector which could render these instruments ineffective.

Keywords: Commercial Banks, Corporate Governance, Performance, Uganda

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