Analyzing the relationship between institutional frameworks and financial inclusion in rural Uganda: A social network perspective
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Date
2018
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Emerging Markets
Abstract
The purpose of this paper is to report the findings on the mediating
effect of social network in the relationship between institutional frameworks and
financial inclusion in rural Uganda.
Design/Methodology/Approach – The study adopts a cross-sectional research
design to collect data used to test for mediation under this study. Structural equation
model (SEM) through use of Bootstrap in AMOS (analysis of moment structures) was
adopted to establish existence and type of mediation by social network in the
relationship between institutional frameworks and financial inclusion.
Results – Social network had a partial mediating effect through institutional
frameworks on financial inclusion. In addition, institutional frameworks through its
regulative, normative, and cultural-cognitive pillars also have a significant direct
effect on financial inclusion. Besides, social networks had a significant effect on
financial inclusion. This suggests that there exist both a direct effect of institutional
frameworks on financial inclusion and an indirect effect of institutional frameworks
through social network on financial inclusion.
Research limitations/shortcomings – While the sample for this study was big
enough, it limited itself to only poor households in rural Uganda. Besides, the current
study adopted cross-sectional design, thus, leaving out longitudinal design to
investigate the characteristics in our sample over time.
Originality/Value – The study recommends that social network, which acts as a
conduit through which useful information flow and can be shared, play a critical role
in mediating in the relationship between institutional frameworks and financial
inclusion in rural Uganda. Therefore, our study contributes to existing body of
literature by highlighting the mediating influence of social network in the
relationship between institutional frameworks and financial inclusion, especially in
rural Uganda.
Contribution – The study makes significant empirical contribution and
implications to financial inclusion policy makers on evidence of the critical role
played by social network in indirectly enhancing the relationship between
institutional frameworks and financial inclusion of the poor who are vulnerable to
exclusion by main stream financial services providers.
Description
Keywords
Financial inclusion, Institutional pillars, Network ties, The poor, Confirmatory factor analysis, Structural equation model
Citation
George Candiya Bongomin Okello, John C Munene, Joseph Mpeera Ntayi, Charles Malinga Akol, "Analyzing the relationship between institutional frameworks and financial inclusion in rural Uganda: A social network perspective", International Journal of Emerging Markets, https://doi.org/10.1108/IJoEM-02-2017-0057