Browsing by Author "Akol Malinga, Charles"

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    Analyzing the relationship between financial literacy and financial inclusion by microfinance banks in developing countries: social network theoretical approach
    (International Journal of Sociology and Social Policy, 2020) Okello Candiya Bongomin, George; Mpeera Ntayi, Joseph; Akol Malinga, Charles
    The main purpose of this study is to establish the mediating effect of social network in the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries. Design/methodology/approach – The study adopted a cross-sectional research design and data were collected from the poor who resides in rural Uganda. Structural equation modelling (SEM) through analysis of moment structures (AMOS) was used to analyze the data. Bootstrap approach with 5,000 samples was run to establish the mediating effect of social network in the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries. Findings – The results showed that social network significantly and positively mediate the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries. In addition, financial literacy also has a direct significant and positive effect on financial inclusion. Overall, the findings suggest that the presence of social network fully mediate the effect of financial literacy on financial inclusion of the poor by microfinance banks in developing countries. Research limitations/implications – This study adopted a cross-sectional research design and data were collected using a semi-structured questionnaire. Future studies could adopt longitudinal research design to establish the dynamic characteristics of the samples under study over time. Besides, this study collected data from only poor households who were clients of microfinance banks located in rural Uganda. It ignored the other section of the population who were not the poor. Therefore, future studies could use the other section of the population who are clients of commercial banks. Practical implications – The advocates of financial literacy and managers of microfinance banks in developing countries should ensure using existing local structures such as community and village associations to conduct financial literacy training. The village associations help in mobilizing members who are close-knit based on the existing societal ties that can be used as a channel for disseminating vital financial literacy information. Indeed, financial literacy workshops, seminars, and business clinics can be easily conducted to individuals who are members of the village associations. Originality/value – This paper integrates social network theory in the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries. Social network acts as a conduit through which financial knowledge and skills flow to increase the scope of financial inclusion of the poor in developing countries.
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    Collective action among rural poor: Does it enhance financial intermediation by banks for financial inclusion in developing economies?
    (International Journal of Bank Marketing, 2018) Okello Candiya Bongomin, George; Munene, John C.; Mpeera Ntayi, Joseph; Akol Malinga, Charles
    The purpose of this paper is to establish the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. Design/methodology/approach – The paper uses structural equation modeling (SEM) through bootstrap approach constructed using analysis of moment structures to test for the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. Besides, the paper adopts Baron and Kenny’s (1986) approach to establish whether conditions for mediation by collective action exist. Findings – The results revealed that collective action significantly mediates the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. The findings further indicated that the mediated model had better model fit indices than the non-mediated model under SEM bootstrap. Furthermore, the results showed that both collective action and financial intermediation have significant and direct impacts on financial inclusion of the poor in rural Uganda. Therefore, the findings suggest that the presence of collective action boost financial intermediation for improved financial inclusion of the poor in rural Uganda. Research limitations/implications – The study used quantitative data collected through cross-sectional research design. Further studies through the use of interviews could be adopted in future. Methodologically, the study adopted use of SEM bootstrap approach to establish the mediating effect of collective action. However, it ignored the Sobel’s test and MedGraph methods. Future studies could adopt the use of alternative methods of Sobel’s test and MedGraph. Additionally, the study focused only on semi-formal financial institutions. Hence, further studies may consider the use of data collected from formal and informal institutions. Practical implications – Policy makers and managers of financial institutions should consider the role of collective action in promoting economic development, especially in developing countries. They should create structures and design financial services and products that promote collective action among the poor in rural Uganda. Originality/value – Although several scholars have articulated financial inclusion based on both the supply and demand side factors, this is the first study to test the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda using SEM bootstrap approach. Theoretically, the study combines the role of collective action with financial intermediation to promote financial inclusion. Financial intermediation theory ignores the role played by collective action in the intermediation process between the surplus and deficit units.
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    Determinants of SMMEs Survival in post-war communities in developing countries: testing the interaction effect of government support
    (World Journal of Entrepreneurship, Management and Sustainable Development, 2017) Candiya Bongomin Okello, George; Munene, John C.; Mpeera Ntayi, Joseph; Akol Malinga, Charles
    The main purpose of the study is to test the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and Small Medium and Micro-enterprises (SMMEs) survival in post-war communities in northern Uganda. Design/methodology/approach – cross sectional research design was used in the study and quantitative data were collected from 304 SMMEs located in Gulu District using a semi-structured questionnaire. Structural equation modelling (SEM) through use of Analysis of Moment Structures was adopted to establish the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education and SMMEs survival in post-war communities in northern Uganda. Further, Pearson’s correlation analysis was used to show the association between the variables under study. Findings – the results revealed that there is a significant interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education and SMMEs survival in post-war communities in northern Uganda. Besides, the results indicated that business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and government support have significant and positive impacts on SMMEs survival in post war communities in northern Uganda. Research limitations/implications – the study employed cross-sectional research design, thus, ignoring longitudinal study approach. Besides, the sample was selected from only Gulu District, therefore, leaving out other Districts located in northern Uganda. Practical implications – advocates of recovery programmes and interventions in developing countries should consider government support as a vital factor in promoting business skill, capital adequacy, access to finance, access to market, and entrepreneurial education in order to promote SMMEs survival in post-war communities. In addition, governments in developing countries should offer investment incentives and tax waivers to infant SMMEs in post-war communities like in northern Uganda. Originality/value – the study examined the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education and SMMEs survival in post-war communities in developing countries. Thus, to the best of our knowledge, this is the first attempt to test the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education and SMMEs survival in post-war communities in northern Uganda. The use of government support as a moderator in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education and SMMEs survival is scarce in entrepreneurship literature and theory. This creates uniqueness in this study.
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    Exploring the mediating role of social capital in the relationship between financial intermediation and financial inclusion in rural Uganda
    (International Journal of Social Economics, 2018) Okello Candiya Bongomin, George; Munene, John C.; Mpeera Ntayi, Joseph; Akol Malinga, Charles
    The purpose of this paper is to establish the mediating role of social capital in the relationship between financial intermediation and financial inclusion in rural Uganda. Design/methodology/approach – The current study used cross-sectional research design and a semi-structured questionnaire was used to collect data for this study. The study applied structural equation modeling through bootstrap approach in AMOS to establish the mediating role of social capital in the relationship between financial intermediation and financial inclusion. Findings – The results indicated that social capital significantly mediates the relationship between financial intermediation and financial inclusion in rural Uganda. Therefore, it can be deduced that social capital among the poor play an important role in promoting financial intermediation for improved financial inclusion in rural Uganda. Research limitations/implications – Although the sample was large, it may not be generalized to other segments of the population. Data were collected from only poor households located in rural Uganda. Besides, the study was cross-sectional, thus, limiting efforts in investigating certain characteristics of the sample over time. Perhaps future studies could adopt the use of longitudinal research design. Practical implications – Financial institutions such as banks should rely on social capital as a substitute for physical collateral in order to promote financial inclusion, especially among the poor in rural Uganda. Originality/value – This study provides empirical evidence on phenomenon not studied in rural areas in Sub-Saharan Africa where the poor use social capital embedded in customs and norms for doing business. The results highlight the importance of social capital in mediating the relationship between financial intermediation and financial inclusion of the poor in rural Uganda.
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    Financial intermediation and financial inclusion of the poor: Testing the moderating role of institutional pillars in rural Uganda
    (International Journal of Ethics and Systems, 2018) Okello Candiya Bongomin, George; Munene, John C.; Mpeera Ntayi, Joseph; Akol Malinga, Charles
    Drawing from the fact that institutions act as incentives and disincentives to human behaviour in financial markets, the purpose of this study is to examine the moderating role of institutional pillars in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. Design/methodology/approach – The study used cross-sectional research design and data were collected from the poor residing in rural Uganda. Statistical package for social sciences was used to analyse the data. Descriptive statistics, correlations and regression analyses were generated. Besides, ModGraph excel programme was adopted to graphically explain the moderating role of institutional pillars in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. Findings – The results revealed that institutional pillars of regulative (formal rules), normative (informal norms) and cultural cognitive (cognition) significantly moderate the relationship between financial intermediation and financial inclusion of the poor. Furthermore, the results also indicated that financial intermediation and institutional pillars have significant effects on financial inclusion of the poor in rural Uganda. Research limitations/implications – The study focuses on only cross-sectional design, thus, leaving out longitudinal study. Future research using longitudinal data that explore behaviours of the poor over time could be useful. In addition, only quantitative data were used to measure variables under study and use of qualitative data were ignored. Thus, further studies using qualitative data are feasible. Practical implications – Policymakers and advocates of financial inclusion in a developing country such as Uganda should adopt institutional pillars (regulative, normative and cultural-cognitive) in promoting financial intermediation in rural areas. The institutional pillars working in combination set the “rule of the game” or “humanly devise constraints” that guide economic exchange by promoting and limiting certain actions of actors in underdeveloped financial market as stipulated by North (1990) and Scott (1995). Originality/value – To the best of the authors’ knowledge, this is the first attempt to examine the moderating role of institutional pillars under the theory of institutions in the relationship between financial intermediation and financial inclusion of the poor in a developing country setting. Indeed, institutions guide contract enforceability and information sharing in human interaction to lower transaction cost in the financial markets. This is missing in literature and theory of financial intermediation in promoting financial inclusion, especially in rural Uganda.
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    Institutions and Financial Inclusion in Rural Uganda: the Mediating Role of Social Capital
    (Journal of African Business, 2018) Okello Candiya Bongomin, George; Ntayi, Joseph M.; Munene, John C.; Akol Malinga, Charles
    The study examined the mediating role of social capital in the relationship between institutions and financial inclusion of poor households in rural Uganda. Cross-sectional design was adopted and data were collected and analyzed using SPSS/20, MedGraph and Sobel-z test. The findings indicated that social capital partially mediates the relationship between institutions and financial inclusion. Besides, institutions and financial inclusion are significantly related. Thus, managers of financial institutions, financial inclusion working groups, and policy makers should pay more attention to the role of social capital in promoting cooperative behavior among the poor in accessing scarce resources such as financial services.
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    Mobile Money and Financial Inclusion in Sub- Saharan Africa: the Moderating Role of Social Networks
    (Journal of African Business, 2018) Okello Candiya Bongomin, George; Ntayi, Joseph M.; Munene, John C.; Akol Malinga, Charles
    The purpose of this article is to test the moderating effect of social networks in the relationship between mobile money usage and financial inclusion in rural Uganda. The results revealed that there is a significant and positive moderating effect of social networks in the relationship between mobile money usage and financial inclusion in rural Uganda. Besides, mobile money usage and social networks have direct and significant effects on financial inclusion in rural Uganda. Thus, the findings suggest that existence of social networks of strong and weak ties among mobile money users promote financial inclusion in rural Uganda. Previous studies have concentrated only on investigating the impact of mobile money in promoting financial inclusion in developing economies, especially in Sub-Saharan Africa. However, this particular study introduces the moderating effect of social networks in the relationship between mobile money usage and financial inclusion in rural Uganda, which seems to be sparse and lacking in literature.
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    Nexus between financial literacy and financial inclusion: Examining the moderating role of cognition from a developing country perspective
    (International Journal of Bank Marketing, 2018) Okello Candiya Bongomin, George; Munene, John C.; Mpeera Ntayi, Joseph; Akol Malinga, Charles
    Premised on the argument that cognition structures the way how individuals think and make decisions, the purpose of this paper is to test the interaction effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda. Design/methodology/approach – The study used cross-sectional research design and quantitative data were collected and analyzed using Statistical Package for Social Sciences. Baron and Kenny guidelines were adopted to test for existence of moderating effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda. Furthermore, ModGraph excel software was used to establish the magnitude of moderating effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda. Findings – The results revealed that cognition significantly moderate the relationship between financial literacy and financial inclusion of the poor in rural Uganda. In addition, both cognition and financial literacy also have direct effects on financial inclusion of the poor in rural Uganda. Research limitations/implications – The study adopted cross-sectional research design and data were collected by use of only questionnaires. Future studies through longitudinal research design may be employed. Besides, further studies using interviews may be adopted. Furthermore, this study collected data from only tier 3 financial institutions, thus, ignoring the other financial institutions. Future studies could focus on financial institutions under the other tiers. Practical implications – The findings from the study enlightens policy-makers, managers of financial institutions, and financial inclusion advocates on the importance of cognition in enhancing financial literacy among the poor, especially in rural Uganda. Cognition combined with financial literacy helps the poor to make wise financial decisions and choices toward consuming financial services and products provided by formal financial institutions. This leads to increased scope of financial inclusion of the poor in rural Uganda. Therefore, advocates of financial literacy should assess community cultural cognition and utilize them to design and fashion effective financial literacy interventions that can promote financial inclusion. Originality/value – The study uses Baron and Kenny and ModGraph excel software to test for the interaction effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural Uganda. While several studies exist worldwide on financial inclusion, this study is the first to test the interaction effect of cognition in the relationship between financial literacy and financial inclusion of the poor in rural areas in a developing country context.