A digital finance model for financial inclusion of women in Makindye Division

Abstract

Financial inclusion is a key driver of economic growth, particularly in developing countries where large portions of the population, especially women, remain unbanked and underserved by formal financial institutions. In Uganda, over 54% of financially excluded adults are women, who face significant barriers to accessing digital financial services, including affordability, lack of digital literacy, and socio-cultural restrictions. These challenges limit their ability to save, access credit, and participate fully in the digital economy. Despite various initiatives, a significant gap remains in addressing the specific challenges women face in accessing and utilizing digital financial services. The purpose of this study was to develop a digital finance model aimed at enhancing the financial inclusion of women in Makindye Division, Uganda. The study sought to identify requirements for the digital finance model for financial inclusion of women, design a digital finance model for financial inclusion of women in Makindye division and test the effectiveness of the designed digital finance model. A mixed-method approach was employed, combining both quantitative and qualitative data collection. Survey questionnaires were administered to 362 women while in-depth interviews were conducted with 10 mobile money/banking agents within Makindye Division. The quantitative data was analyzed using IBM-SPSS for descriptive and inferential statistics, including correlation and regression analysis, to test the relationships between digital finance and financial inclusion. The results revealed significant positive correlations between digital finance and financial inclusion, with digital infrastructure access, digital literacy, affordability of digital financial services, perceived risk and privacy concerns being critical factors. The study found that women face several barriers, including limited access to digital devices, poor network quality, high costs of internet services, and lack of formal training. The developed digital finance model was tested as an effective tool for enhancing financial inclusion among women in Makindye division. The study has important implications for policymakers and financial service providers. It offers a practical model that can be adopted to address the financial inclusion gap among women, particularly by promoting digital literacy, expanding digital infrastructure, and reducing the cost of digital financial services. This research provides valuable insights for fostering a more inclusive financial ecosystem in Uganda and other similar developing context