Credit Information Asymmetry, Financial Literacy and Access to Finance Among Entrepreneurs in Bakaro Market, Mogadishu, Somalia.

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dc.contributor.authorAbdishakur Mohamed Ali
dc.date.accessioned2026-07-21T11:54:47Z
dc.date.available2026-07-21T11:54:47Z
dc.date.issued2025-07-21
dc.descriptionThis is a master's thesis.
dc.description.abstractThis study investigates the complex interplay between credit information asymmetry, financial literacy, and access to finance among entrepreneurs in Bakaro Market, Mogadishu, Somalia. The primary objectives were to evaluate the relationship between credit information asymmetry and access to finance, assess the impact of financial literacy on entrepreneurs’ access to financial resources, and examine how financial literacy mediates the relationship between credit information asymmetry and access to finance. Drawing on Galbraith’s Organizational Information Processing (OIP) theory, the study emphasizes the essential role of information in enabling entrepreneurs to make informed financial decisions. Using a cross-sectional research design, data was quantitatively collected from 167 respondents selected through random sampling, ensuring a representative sample of the entrepreneurial community in the market. The analysis revealed several significant findings. A strong positive correlation was identified between credit information asymmetry and access to finance, with a correlation coefficient of 0.603, suggesting that as entrepreneurs have better access to accurate and timely credit information, their chances of securing financing increase. Additionally, financial literacy was found to significantly enhance access to finance, with a correlation coefficient of 0.502, indicating that entrepreneurs with higher levels of financial knowledge are better equipped to navigate complex financial systems and engage with financial institutions effectively. Moreover, financial literacy was shown to mediate the relationship between credit information asymmetry and access to finance, illustrating that entrepreneurs with strong financial skills can leverage available credit information to secure funding more effectively. These findings highlight the critical need for initiatives aimed at improving credit information systems and fostering financial literacy among entrepreneurs. Specifically, the study recommends that financial institutions and policymakers work collaboratively to enhance credit information sharing mechanisms, such as establishing or strengthening credit bureaus to provide comprehensive credit histories that facilitate better risk assessment by lenders. Furthermore, targeted financial literacy programs should be developed to educate entrepreneurs on essential financial concepts, budgeting, and effective management of financial resources. By equipping entrepreneurs with the necessary knowledge and tools, these programs can significantly improve their ability to access financing, ultimately fostering entrepreneurship and contributing to sustainable economic growth in Somalia. The study’s insights underscore the importance of addressing both credit information asymmetry and financial literacy as integral components in promoting financial inclusion and supporting the entrepreneurial ecosystem in the region.
dc.description.sponsorshipDr. Isaac Nkote Nabeta, (Makerere University Business School) & Mr. Moses Okumu, (Makerere University Business School)
dc.identifier.citationAbdishakur, M. A. (2025) Credit Information Asymmetry, Financial Literacy and Access to Finance Among Entrepreneurs in Bakaro Market, Mogadishu, Somalia. (Unpublished master’s dissertation). Makerere University Business School, Kampala, Uganda.
dc.identifier.urihttp://hdl.handle.net/20.500.12282/6063
dc.language.isoen
dc.publisherMakerere University Business School
dc.rightsAttribution-NonCommercial-NoDerivs 3.0 United Statesen
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/us/
dc.titleCredit Information Asymmetry, Financial Literacy and Access to Finance Among Entrepreneurs in Bakaro Market, Mogadishu, Somalia.
dc.typeThesis
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