Examining the levels of financial literacy and outreach of microfinance institutions in Uganda

Abstract

Issues in Business Management and Economics
Vol.1 (7), pp. 193-199, November 2013
ISSN 2350-157X
Article ID JPR048, 07 pages
Copyright © 2014 Author(s) retain the copyright of this article. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 3.0 International License

Original Research Paper

Examining the levels of financial literacy and outreach of microfinance institutions in Uganda

Accepted 5 October 2013

Kakande Ashe Robert, Bazinzi Natamba, Nakabuye Zulaika, Brendah Akankunda and Agasha Esther

Faculty of Commerce, Makerere University Business School, Kampala, Uganda.

*Corresponding Author E-Mail: bnatamba(at)mubs.ac.ug
Tel.: +256782170980

 Abstract

Microfinance Institutions (MFIs) have become a major player in the Ugandan economy through provision jobs and most important, bringing financial services close to the people. However, there are challenges such as low levels of literacy among clients of MFIs. MFIs also have problems in running of their outreach programs. This study was conducted to establish the relationship between financial literacy of clients and outreach of microfinance institutions in Uganda. A total of 286 employees of the microfinance institutions from eastern Uganda participated in this study through filling-in questionnaires. Data were analyzed using descriptive statistics, correlation and regression methods. Findings reveal that there is no significant relationship between financial literacy of clients and outreach of microfinance institutions in Uganda (r=.0.85, P>05). The study recommends that microfinance institutions should increase on their outreach to cover further areas. This will enable them to increase on their breadth, depth and number of clients.

Key words: Financial literacy, outreach, microfinance, financial knowledge

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