Asian Journal of Economics, Business and Accounting

Financial inclusion is essential for all individuals in the community reflecting affordability, accessibility and reliability of financial services particularly in Nsiika town council, Buhweju district, Uganda where the levels of financial inclusion are still very low with only 16% of the mature population keeping their funds at official deposit taking organizations and now with introduction of mobile money services, it is considered a major factor. The main purpose of the study is to investigate the relationship between mobile money services and financial inclusion. The study was guided by two objectives: to examine the extent to which mobile loans and mobile transfer services influence the financial inclusion of the Nsiika community. The study adopted three theories: dissatisfaction theory, credit rationing theory and transaction theory. A target population of 1020 and a sample size of 287 using the Sølvens formula and simple random sampling was used. A questionnaire, which was self-administered to the respondents, was used to collect data. a descriptive design and multiple regression were used in data analysis with the aid of the statistical package for Social Scientists (SPSS) version 27. The hypotheses were tested at a 0.5 confidence level, and thereafter the results were tabulated. The results indicated that there is an insignificant relationship between savings and financial inclusion (t=1.118, P=0.265, >0.05). The findings indicated an insignificant relationship between mobile loans and financial inclusion (t=0.304, p=0.031, <0.05). The results further indicated an insignificant relationship between mobile transfer services and financial inclusion (t=0.021, p=0.762,p>0.05). The researcher concluded that mobile money services, particularly savings and transfers, can have an insignificant impact on financial inclusion; therefore, more emphasis should be put on mobile loans, which has a significant impact on financial inclusion. The mobile transfer services were found to be ineffective in improving financial inclusion due to low wages and limited access to the service in the district. Low-income levels and restricted access to services hindered financial inclusion for the local population. More so, other financial products should be made available to the community, such as mobile banking, insurance so as to boost financial inclusion. It was recommended that loan services should be prioritised for improved financial inclusion because these factors were found to have a major impact on the financial inclusion of the residents of the Buhweju district, and that telecom carriers should continuously offer these services.