Financial Inclusion and Financial Wellbeing among households: A case of Uganda

Abstract

The main purpose of this study is to examine the impact of financial inclusion on financial well-being among households in unindustrialized economies with data obtained from a sample size of 400 urban rich and urban poor in central Uganda. The study employed a cross-sectional design. Data were collected from 400 households drawn from three districts of Kampala, Wakiso and Mukono in the central region of Uganda. In addition, exploratory factor analysis (EFA) and confirmatory factor analysis were used to establish convergent validity between the items used to measure the different constructs under study. The results generated from the study designate a positive and significant relationship between financial inclusion and financial wellbeing (β=0.401, p values < 0.05). The study adopted only a cross-sectional study design, thus leaving out the longitudinal study. Therefore, future studies employing longitudinal research design are worth undertaking. The article indicates that researchers, policymakers, and advocates of financial inclusion should reconsider investigating the individual contributions of the different components of financial inclusion in promoting the financial well-being of households in urban Uganda. This article combines all the components (usage, accessibility, and affordability) measures of financial inclusion to explain the financial well-being of households in urban Uganda.