Financial Literacy, Self-efficacy and Financial Inclusion Among Working Women in Uganda

Abstract

The purpose of this study was to examine the effect of financial literacy and self-efficacy on financial inclusion among working women in Uganda. The mediating role of self-efficacy on the connexion between financial literacy and financial inclusion was also tested. In Uganda, women dominant the working population and live longer than men yet financial inclusion among women has stagnated for five years. No empirical study has linked financial literacy to financial inclusion in women where the mobile money indicator is incorporated in the financial inclusion index. Moreover, studies on the predictive power of the sociocognitive factor of self-efficacy in the financial domain are rare. A correlational cross-sectional design was embraced. A sample of 384 from a population of 327,930 working women from all the five divisions of Kampala, Uganda was used. The quantitative analysis used Analysis of Moments of Structures (AMOS) 21 and SPSS version 26 to answer the research objectives and hypotheses. Multiple Regression Analysis and Structural Equation Model (SEM) tested for dependence connexions while Sobel test and Medgraph, and Bootstrap method were utilised for the mediation test. The findings indicate that financial literacy among working women in Uganda has a positive significant effect on financial inclusion. Secondly, self-efficacy is positively and significantly affected by financial literacy. Thirdly, financial inclusion is positively and significantly affected by self-efficacy. Fourthly, the results indicate a full mediation effect of self-efficacy on financial literacy and financial inclusion. In conclusion, financial attitude, skills and behaviour are important for financial inclusion of Ugandan working women, but financial knowledge is not. Self-efficacy is a duct through which financial literacy predicts financial inclusion. The findings support the theoretical framework of the expectancy theory, social cognition theory, and empowerment theory. The study contributes to managerial policy and practice by suggesting that financial institutions should purposefully design financial products that meet the unique financial needs of working women. Also, using an appropriate language, working women need to be trained in on how to use the available technologies to successfully carry out financial transactions.