Analyzing the Relationship between Mobile Money Adoption and Usage and Financial Inclusion of MSMEs in Developing Countries: Mediating Role of Cultural Norms in Uganda

2019 ◽  
pp. 1-20 ◽  
Author(s):  
George Okello Candiya Bongomin ◽  
John C. Munene
Keyword(s):  
Developing Countries ◽  
Financial Inclusion ◽  
Cultural Norms ◽  
Mobile Money ◽  
Mediating Role ◽  
The Relationship

Trust: mediator between mobile money adoption and usage and financial inclusion

2019 ◽  
Vol 16 (8) ◽  
pp. 1215-1237
Author(s):  
George Okello Candiya Bongomin ◽  
Joseph Ntayi
Keyword(s):  
Developing Countries ◽  
Mobile Network ◽  
Mobile Telephone ◽  
Partial Least Square ◽  
Financial Inclusion ◽  
Mediating Effect ◽  
Content Type ◽  
Mobile Money ◽  
The Relationship

Purpose Recently, a large body of research has been devoted on the role of trust in shaping different types of transactions, especially in rural financial development. Trust is a set of expectations shared by all those who engage in an exchange. Indeed, the “rule of the game” suggests that no trusting party in a transaction should act opportunistically. Consequently, this study aims to establish the mediating effect of trust in the relationship between mobile money adoption and usage and financial inclusion of MSMEs in developing countries with a specific focus on rural Uganda. Design/methodology/approach A quantitative survey-based study was used and responses obtained from 379 MSMEs located in northern Uganda were analysed using partial least square-PLS version 3.0. A semi-structured questionnaire was developed from scales and items used in previous studies referenced in internationally recognised journals to elicit responses from the MSMEs. Structural equation modelling was used to test the models to arrive at a final empirical model derived from the data. Findings The authors found evidence that trust enhances mobile money adoption and usage to increase the scope of financial inclusion of MSMEs in developing countries. Moreover, when individual effect was determined, trust also had significant and positive effect on financial inclusion. Thus, the study results imply that trust enhances mobile money adoption and usage to improve the level of financial inclusion of MSMEs in developing countries. Research limitations/implications The study used cross-sectional data to document the relationship between mobile money adoption and usage and financial inclusion and to establish the mediating effect of trust in the relationship. Future research could use relevant longitudinal data to verify other benefits of trust. Practical implications The results present trust as a significant factor for FINTECH financial services marketing and growth. Specifically, data privacy and effectiveness of the mobile telephone network is more likely to help consumers to bridge the gap between participation and non-participation on the mobile money platform. Customers’ data sent over the mobile network of providers should be protected from unnecessary access and usage by Mobile Network Operators (MNOs) staff and unauthorised persons and agents. Data protection protocols should be set by the MNOs to avoid unnecessary access and use of customers’ data. Originality/value Globally, Fintech scholars have examined the role of mobile money in promoting financial inclusion. However, there is insufficient evidence on the mediating effect of trust in the relationship between mobile money adoption and usage and financial inclusion, especially among rural MSMEs. This study invents a novel direction on the importance of trust in creating transaction efficiency by eliminating opportunism and fraud with in the Fintech ecosystem.

Collective action among rural poor

2019 ◽  
Vol 37 (1) ◽  
pp. 20-43
Author(s):  
George Okello Candiya Bongomin ◽  
John C. Munene ◽  
Joseph Mpeera Ntayi ◽  
Charles Akol Malinga
Keyword(s):  
Collective Action ◽  
Financial Institutions ◽  
Financial Intermediation ◽  
Financial Inclusion ◽  
Content Type ◽  
Mediating Role ◽  
The Poor ◽  
Bootstrap Approach ◽  
The Relationship

PurposeThe 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/approachThe 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.FindingsThe 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/implicationsThe 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 implicationsPolicy 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/valueAlthough 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.

Exploring the mediating role of social capital in the relationship between financial intermediation and financial inclusion in rural Uganda

2018 ◽  
Vol 45 (5) ◽  
pp. 829-847 ◽  
Author(s):  
George Okello Candiya Bongomin ◽  
John C. Munene ◽  
Joseph Mpeera Ntayi ◽  
Charles Akol Malinga
Keyword(s):  
Social Capital ◽  
Research Design ◽  
Financial Intermediation ◽  
Financial Inclusion ◽  
Cross Sectional ◽  
Content Type ◽  
Mediating Role ◽  
The Poor ◽  
The Relationship

Purpose 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.

scholarly journals The Mediating Role of Job Satisfaction in the Relationship between Compensation and Work Environment on Performance

2021 ◽  
Vol 6 (2) ◽  
pp. 110-116
Author(s):  
Ilzar Daud ◽  
Nur Afifah
Keyword(s):  
Job Satisfaction ◽  
Developing Countries ◽  
Work Environment ◽  
Significant Relationship ◽  
Jel Classification ◽  
Mediating Role ◽  
Census Techniques ◽  
And Performance ◽  
The Relationship

Objective - The purpose of this study is to identify the relationship between compensation and work environment on performance through job satisfaction. Methodology/Technique - The population in this study is 150 employees from a State-Owned Bank. The sampling method uses census techniques so that the number of samples used is 150 employees. The research data was collected using a questionnaire, which is then analyzed using a path analysis technique (SPSS software) to examine the relationships among the constructs, which are: compensation, work environment, job satisfaction and performance. Findings –The results of this study indicate that compensation has a significant relationship between job satisfaction, and the work environment has a significant relationship on job satisfaction. The results also prove that compensation has no relationship on performance, work environment has a significant relationship on performance, and job satisfaction has a significant relationship on performance. The results of this study also indicate that as an indirect effect, compensation has a significant relationship on performance through job satisfaction and the work environment has a significant relationship on performance through job satisfaction. Novelty - Previous studies have been carried out in many western countries, raising doubts about generalizations in the same research results in developing countries such as Indonesia. Therefore, the novelty in this study is carried out in the context of developing countries, especially in State-Owned Banks in West Kalimantan, Indonesia. Type of Paper: Empirical. JEL Classification: L22, M12, M19. Keywords: Compensation; Work Environment; Job Satisfaction; Performance Reference to this paper should be made as follows: Daud, I; Afifah, N. (2021). The Mediating Role of Job Satisfaction in the Relationship between Compensation and Work Environment on Performance, Journal of Management and Marketing Review, 6(2) 110 – 116. https://doi.org/10.35609/jmmr.2021.6.2(2)

scholarly journals THE MEDIATING ROLE OF SOCIAL CAPITAL IN THE RELATIONSHIP BETWEEN FINANCIAL LITERACY AND FINANCIAL INCLUSION

2021 ◽  
Vol 19 (4) ◽  
pp. 782-790
Author(s):  
Moh. Agung Setiawan ◽  
◽  
Ubud Salim ◽  
Nur Khusniyah ◽  
◽  
...  
Keyword(s):  
Social Capital ◽  
Financial Literacy ◽  
Predictor Variable ◽  
Partial Least Square ◽  
Financial Inclusion ◽  
Least Square ◽  
Mediating Role ◽  
The People ◽  
The Relationship

The purpose of this study is to examine the mediating role of social capital in the relationship between financial literacy and financial inclusion in the Malang Raya region. The unit of analysis used in this study is the people in Malang City, Malang Regency, and Batu City. The sampling technique used was proportionate stratified random sampling. Data analysis in this study used Partial Least Square (PLS). The results of this study indicate that financial literacy has a significant effect on financial inclusion. Financial literacy has a significant effect on social capital, social capital significantly affects financial inclusion, and social capital mediates the relationship between financial literacy and financial inclusion. This result shows that social capital has a partial mediating role, meaning that the effect on financial inclusion goes through the main predictor variable, financial literacy and social capital. Therefore, the local government can take advantage of policies related to social capital to impact efforts to improve financial inclusion in the community and regional economic conditions. This study also explained that, in general, the people in the Malang Raya region had good financial literacy. Future studies should use qualitative exploration by conducting interviews with respondents to explain other phenomena, especially for people geographically unbankable.

scholarly journals Mediating Effects of Financial Innovations between Behavioral Factors and Financial Inclusion of Micro Enterprises in Kenya

2019 ◽  
Vol 2 (6) ◽  
pp. 49-64
Author(s):  
Gladys Byegon ◽  
Josephat Cheboi ◽  
Ronald Bonuke
Keyword(s):  
Financial Services ◽  
Financial Inclusion ◽  
Self Control ◽  
Behavioral Factors ◽  
Mediating Role ◽  
Financial Innovations ◽  
Social Proof ◽  
The Relationship ◽  
Micro Enterprises

Purpose: Understanding the mediating role of the adoption of financial innovations on the relationship behavioral factors and utilization of formal financial services was the main aim of this research.   The behavioral factors examined were self-control, confidence and social proof. The study is premised on behavioral finance theories. Design/Methodology: The positivist approach and explanatory research designs were adopted to understand the relationships between the variables under investigation. A sample of 486 owners/managers of licensed micro-enterprises in Nairobi, Kenya were selected using stratified random sampling technique. Primary data was collected through a structured questionnaire. Hypotheses were tested using Hayes and Zhao approach for mediation analysis. Findings: The results showed that financial innovations mediated the relationship between each of the behavioral factors and financial inclusion, that is; self- control (β =.0941, ρ= .00), confidence; (β = .1019, ρ = .00) and social proof (β = .1036, ρ = .00).  Practical implications: The study has brought into fore the mediating role of financial innovations on the relationship between the three behavioral factors and financial inclusion. Thus, practitioners are encouraged give due attention to behavioral factors and financial innovations in policy formulation and programs geared towards optimal utilization of financial services.

scholarly journals The Mediating Effect of Eco-Innovation between Motivation and Organization Performance in Jordan Industrial Estates Company in Jordan

2018 ◽  
Vol 7 (4.35) ◽  
pp. 414 ◽  
Author(s):  
Waleed Mohammad Kayed Alhyasat ◽  
Zainon Mat Sharif ◽  
Khaled Mohammad Alhyasat
Keyword(s):  
Developing Countries ◽  
Simple Random Sampling ◽  
Mediating Effect ◽  
P Value ◽  
Organization Performance ◽  
Industrial Estates ◽  
Mediating Role ◽  
The Relationship ◽  
Mediator Variable

The main aim of this paper is to evaluate the effect of motivation on organization performance in Jordan Industrial Estate Company (JIEC) in Jordan, the mediating role of eco-innovation. Resource Based View theory (RBV) highlighted the role of Motivation in achieving the high organization performance. A quantitative approach and simple random sampling were used to obtain data via questionnaire from 381 employees from different level of JIEC, the response rate was 74.8%. SEM was employed to analyses the study variables. The results shows that the direct effect of motivation and eco-innovation on organization performance are significant at a p-value 0.050 and 0.000 for motivation and eco-innovation respectively and eco-innovation mediates the relationship between motivation and organization performance, with a partial mediating effect. This paper contribute to theory by filling the gap of eco-innovation literature in developing countries, validate eco-innovation as a mediator variable between motivation and organization performance. This study recommended for further studies about eco-innovation in developing countries particularly in Jordan, and repeat the same study to ensure the validate the study model.

Social capital: mediator of financial literacy and financial inclusion in rural Uganda

2016 ◽  
Vol 26 (2) ◽  
pp. 291-312 ◽  
Author(s):  
George Okello Candiya Bongomin ◽  
Joseph Mpeera Ntayi ◽  
John C. Munene ◽  
Isaac Nkote Nabeta
Keyword(s):  
Social Capital ◽  
Financial Literacy ◽  
Financial Inclusion ◽  
Research Approach ◽  
Rural Poor ◽  
Content Type ◽  
Mediating Role ◽  
Poor Households ◽  
The Relationship

Purpose The purpose of this paper is to examine the mediating role of social capital in financial literacy and financial inclusion relationship in rural Uganda. The major aim is to establish the role of social capital in the relationship between financial literacy and financial inclusion. Design/methodology/approach The paper adopts and uses MedGraph programme (Excel version 3.0), Sobel and Kenny and Baron tests to test the mediation effect of social capital in the relationship between financial literacy and financial inclusion. Findings The results reveals that social capital is a significant mediator in the relationship between financial literacy and financial inclusion of rural poor in Uganda. Financial literacy did not have a direct effect on financial inclusion, but through full mediation of social capital. Existence of social capital into the relationship boosts the relationship between financial literacy and financial inclusion by 61.6 per cent among rural poor households in Uganda. Thus, the finding suggests that with the absence of social capital, financial literacy may fail to enhance the level of financial inclusion among rural poor households in Uganda. Research limitations/implications This study adopted only single research approach using a questionnaire. However, future research through interview may be of importance. Besides, for the purpose of triangulation, a study involving financial institutions’ staff may be viable. Moreover this study was limited by the fact that it was cross-sectional. Furthermore, a longitudinal study may be useful in future to investigate the mediating impact of social capital spanning over a long period of time. Practical implications Managers, policymakers and financial inclusion practitioners should advocate and embark on building social capital among rural communities, so as to improve on the level of financial inclusion. Originality/value While a large body of research has been carried out on financial literacy, this paper is the first to test the mediating role of social capital in the relationship between financial literacy and financial inclusion, especially in rural Uganda. This study generates evidence and contributes to the powerful influence of social capital in enhancing the level of financial inclusion based on financial literacy.

scholarly journals Role Of Banking-Sector To Inclusive Growth Through Inclusive Finance In Bangladesh

2015 ◽  
Vol 10 (2) ◽  
pp. 145-159 ◽  
Author(s):  
Sandip Sarker ◽  
Sujan Kumar Ghosh ◽  
Mollika Palit
Keyword(s):  
Developing Countries ◽  
Linear Regression ◽  
Banking Sector ◽  
National Level ◽  
Financial Inclusion ◽  
Inclusive Growth ◽  
Simple Linear Regression ◽  
Policy Measures ◽  
The Relationship

Abstract The study attempts to identify the relationship between the banking sector’s financing in agriculture and total agricultural output at national level. To assist the study, a simple linear regression model has been developed. The results suggest that there is a strong correlation between banking sectors’ financing in agriculture and agriculture output in Bangladesh. It is also evident that banking sector’s credits are significantly facilitating financial inclusion in Bangladesh. The model can be instrumental for developing countries that are seeking ways of inclusive growth. In addition; the study recommends some policy measures to overcome the challenges of financial inclusion with regards to the banking sector’s initiatives in financing agriculture in Bangladesh.

Digital financial innovations in the twenty-first century

2019 ◽  
Vol 36 (3) ◽  
pp. 185-203 ◽  
Author(s):  
George Okello Candiya Bongomin ◽  
Pierre Yourougou ◽  
John C. Munene
Keyword(s):  
Developing Countries ◽  
Moderating Effect ◽  
Financial Inclusion ◽  
Content Type ◽  
Mobile Money ◽  
Financial Innovations ◽  
Tax Exemptions ◽  
Transaction Taxes ◽  
Transaction Tax ◽  
The Relationship

Purpose Premised on the assertion that financial digitalization is currently the panacea and game changer in delivering progress towards the sustainable development goals (SDGs) through universal financial inclusion, especially in developing countries, the purpose of this paper is to establish the moderating effect of transaction tax exemptions in the relationship between mobile money adoption and usage and financial inclusion. Design/methodology/approach A semi-structured questionnaire was used to collect data from 379 micro, small and medium enterprises (MSMEs), which use mobile money services drawn from the Northern District of Gulu in Uganda to provide responses for this study. The predictive relevancy and the effect size of the model were determined by running partial least square algorithm through structural equation model (SEM) with 5,000 bootstrap samples in SmartPLS-SEM 3.0. Findings The findings indicated that all the latent variables of transaction tax exemptions showed significant and positive impact on mobile money adoption and usage to advance financial inclusion in developing countries. Moreover, when combined together, the overall SEM predictive model revealed a significant moderating effect of transaction tax exemptions in the relationship between mobile money adoption and usage and financial inclusion. This implies that transaction tax exemptions on digital financial innovations such as the mobile money services can stimulate economic growth through increased level of financial inclusion labeled as the main enabler in achieving the SDGs by the year 2030. Research limitations/implications Whereas data were collected from users of mobile money services, the samples were drawn specifically from MSMEs’ owners located in the Northern District of Gulu in Uganda. Thus, users located in other districts were not included in the sample for this study. Similarly, this study limited itself to only financial services offered through the mobile money platform. It ignored other digital financial channels such as the internet and electronic banking. Practical implications Going forward, in order to improve the economic well-being of households at the “bottom of the pyramid,” governments in developing countries should embrace the significant role of transaction tax exemptions in promoting digital financial innovations such as the mobile money services for increased level of financial inclusion. The governments in developing countries where mobile money has greatly spurred financial inclusion should not only reduce the existing transaction taxes on mobile money services but scrap it off in order to champion progressive increase in the level of universal financial inclusion prescribed as a key enabler in eliminating global poverty, especially in developing countries. Originality/value This study hints on the moderating effect of transaction tax exemptions in the relationship between mobile money adoption and usage and financial inclusion. The paradox in the current trends on transaction taxes on mobile money services, especially in developing countries remain a dearth in the nascent global FINTECH ecosystem.

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