Assessment of financial inclusion and savings culture of households in Uganda, a case of Bank of Africa in Mukono district

Abstract

The study evaluated the assessment of financial inclusion and savings culture of households in Uganda using Bank of Africa in Mukono District as a case study. It was based on the following objectives; to assess the level of accessibility of banking services through agency banking for Bank of Africa, to assess the effect of low-cost banking services through agency banking channel for Bank of Africa and to determine the effects of increased customer transactions through agency banking for Bank of Africa in Mukono district. The study employed a descriptive research survey design based on a sample size of 97 out of 130 study population. Data was collected using questionnaires and the findings were as below; There was a weak significant positive relationship between financial accessibility and savings culture of households at Bank of Africa (r=0.484**Sig=0.000≤0.01). It was further revealed that financial accessibility affects savings culture of households by 22.4% (Adjusted R-square =0.224) which implied that financial accessibility is not effectively administered / executed at the bank. There was a strong significant positive relationship between increased customer transactions and savings culture of households in Bank of Africa (r=0.710**, Sig=0.000). It was revealed that increased customer transactions affect savings culture of households by 49.7% (Adjusted R-square = 0.497) which implied that increased customer transactions is not effectively administered/executed at the bank. There was a very strong significant positive relationship between low transaction cost and savings culture of households in Bank of Africa (r=0.850**, Sig=0.000). It was revealed that low transaction cost affects savings culture of households by 71.9% (Adjusted R-square = 0.719) which implied that low transaction cost is somehow effectively administered/executed at the bank. The study concludes that geographical coverage is the most important benefit and therefore the most significant driver of financial inclusion. Customers don’t have to travel far and then queue at ATMs and banking halls to make payments or withdrawals. The study recommends that Bank of Africa should adopt a risk – based approach to the supervision and regulation of agency banking. Enough agent security measures should be put in place as well.