Financial Inclusion, Financial Innovation and Poverty Levels among SACCO Members.
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Date
2024
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Abstract
Uganda government has put up a number of programs like Poverty Alleviation Project, Poverty Eradication Action Plan, and Project for Financial Inclusion in Rural Areas and the recent being Parish Development Model to reduce poverty levels through use of SACCOs. Despite all these efforts, there are still wide-regional disparities in attaining required poverty levels targets. In northern Uganda the people leaving below the poverty line remained unchanged and in Acholi sub region in particular, poverty levels deepened from 8.9% in 2016/17 to 11.3% in 2019/2020. The study focused on establishing relationship between financial inclusion and poverty level, financial innovation and poverty levels and predictive power of financial inclusion and financial innovation on poverty levels.
The study adopted a cross sectional research design which allowed for the collection of quantitative data using self-administered questionnaire. The study population consisted of 17,770 SACCOs in Gulu City northern Uganda (Gulu City Commercial Quarterly report, 2023). Krejcie & Morgan (1970) sample distribution table was used to determine the sample size of 376 SACCO members. The study used Pearson correlation to establish the association between variables and the linear regression model was used to establish the relationship between financial inclusion, financial innovation and poverty reduction levels. The quantitative data was analyzed using SPSS Version 25. The findings of the study revealed that there is a significant positive relationship between financial inclusion and poverty levels. The findings further revealed a positive significant relationship between financial innovation and poverty levels in Gulu city, northern Uganda. And finally, the study showed that overall financial inclusion and financial innovation explain variations in poverty levels. Predicted 20.5% (Adjusted R2 = .205) of the variance in poverty levels in Gulu city, northern Uganda.
The study recommends the following strategies would improve the poverty levels in Gulu city, northern Uganda; the government of Uganda should formulate a financial inclusion policy that would focus on ensuring that financial institutions like SACCOs make their products accessible, user friendly, available for the usage of the citizenry .Management of SACCOs should encourage financial innovation through innovating of their process and products, introduce new products and improve them regularly to match customer’s need for different purposes. The supervisors of SACCOs, that is, savings and credit cooperative should liaise with government and commercial banks to provide the necessary legislations to penetrate the market with an affordable financial product so that everyone will get included to attain an inclusion level that would stimulate positive poverty levels, specifically medium to high level of inclusion. This will help to achieve a uniform impact with regard to poverty levels. Management of SACCOs should introduce online mobile services or automated system for the members to perform their financial transactions 24 hours to promote accessibility and usage of Sacco product
Description
A Dissertation Submitted to Makerere University Business School (Faculty of Graduate Studies and Research) in Partial Fulfilment of the Requirements for the Award of Degree of Master of Business Administration of Makerere University. (PLAN A).
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Shantal, S . H (2024) Financial Inclusion, Financial Innovation and Poverty Levels among SACCO Members : The Case of SACCO Members of Gulu City, Northern Uganda. Unpublished Masters Dissertation Makerere University Business School. Kampala, Uganda.