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A pathway to financial inclusion: Mobile money and individual savings in Uganda

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  • Lwanga Mayanja, Musa
  • Adong, Annet

Abstract

This study provides a micro perspective on the impact that mobile money services have on an individual’s saving behavior using 2013 Uganda FinScope data. The results show that although saving through mobile phones is not a common practice in Uganda, being a registered mobile money user increases the likelihood of saving with mobile money. Using mobile money to save is more prevalent in urban areas and in the central region than in other regions. This can be explained by several factors. First, rural dwellers on average tend to have lower incomes and thus have a lower propensity to save compared with their urban counterparts. Second, poor infrastructure in rural areas in terms of the lack of electricity and poor telecommunication network coverage may limit the use of mobile phones and consequently the use of mobile money as a saving mechanism. Overall, the use of mobile money as a saving mechanism is still very low, which could be partly explained by legal limitations that do not incorporate mobile finance services into mobile money. The absence of interest payments on mobile money savings may also act as a disincentive to save through this mechanism. Given the emerging mobile banking services, there is need to create greater awareness and to enhance synergies between telecoms companies and commercial banks.

Suggested Citation

  • Lwanga Mayanja, Musa & Adong, Annet, 2016. "A pathway to financial inclusion: Mobile money and individual savings in Uganda," Research Reports 253557, Economic Policy Research Centre (EPRC).
    • Handle: RePEc:ags:eprcrr:253557
    DOI: 10.22004/ag.econ.253557
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    File URL: https://ageconsearch.umn.edu/record/253557/files/127%20A%20pathway%20to%20financial%20inclusion%20-%20Mobile%20money%20and%20individual%20savings%20in%20Uganda.pdf
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    References listed on IDEAS

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    Cited by:

    1. Khalid Lahrour & Latifa Horr, 2023. "The financial inclusion paradigm: the evolution of concepts in a historical and universal context [Le paradigme de l'inclusion financière : L'évolution des concepts dans un contexte historique et universel]," Post-Print hal-04346087, HAL.
    2. Mohammed Hersi Warsame & Yousif Abdelbagi Abdalla, 2024. "Impact of mobile financial services on financial inclusion: empirical insights from Kenya," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(3), pages 633-666, September.
    3. repec:jaf:journl:v:11:y:2020:i:1:n:265 is not listed on IDEAS
    4. Jean Francky Landry NGONO, 2020. "Index of financial inclusion at the time of mobile money," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 11(1), pages 33-44, June.
    5. Lorna Katusiime, 2021. "Mobile Money Use: The Impact of Macroeconomic Policy and Regulation," Economies, MDPI, vol. 9(2), pages 1-19, April.
    6. Dube, Thulani & Chummun, Bibi Zaheenah, 2019. "Mobile Money access and usage among the rural communities in Zimbabwe," MPRA Paper 97578, University Library of Munich, Germany, revised 05 Dec 2019.
    7. Lorna Katusiime, 2021. "COVID 19 and Bank Profitability in Low Income Countries: The Case of Uganda," JRFM, MDPI, vol. 14(12), pages 1-19, December.
    8. Dorothy Nampewo & Grace Ainomugisha Tinyinondi & Duncan Roy Kawooya & George Wilson Ssonko, 2016. "Determinants of private sector credit in Uganda: the role of mobile money," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-16, December.
    9. Khalid Lahrour & Latifa Horr, 2025. "Exploring the impact of fintech on financial inclusion: Literature review [Explorer l'impact de la fintech sur l'inclusion financière : Revue de littérature]," Post-Print hal-05137071, HAL.
    10. Emmanuel, Bukuwa Nambale, 2022. "The determinants of participation in savings groups and the impact on input investment among smallholder farmers in Sironko district, Uganda," Research Theses 334746, Collaborative Masters Program in Agricultural and Applied Economics.
    11. Aarakit, Sylvia Manjeri & Ntayi, Joseph M. & Wasswa, Francis & Buyinza, Faisal & Adaramola, Muyiwa S. & Ssennono, Vincent F., 2022. "The role of financial inclusion in adoption of solar photovoltaic systems: A case of Uganda," Renewable Energy, Elsevier, vol. 198(C), pages 984-998.

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