ENHANCING THE EFFECTIVENESS OF FINANCIAL INCLUSION IN KANUNGU DISTRICT, UGANDA (KEY IJP************568)

• Kaggwa Andrew

Abstract

The purpose of this study was to explore the current state of financial inclusion in Kanungu District, guided by the following specific objectives: 1) to examine the benefits of financial inclusion in the district, 2) to identify challenges faced by residents in accessing formal financial services, and 3) to propose potential solutions to enhance financial inclusion. The study employed a cross-sectional design, well-suited for this research, with a sample size of 384 residents. Simple random sampling ensured that each individual had an equal chance of being selected. Primary data was collected using a self-administered survey questionnaire, which included a significant level of female participation. The study findings revealed that respondents acknowledged the potential of financial inclusion to enhance access to essential services, promote savings and investments, support financial risk management, and foster informed decision-making. However, many respondents were neutral or uncertain about its impact on reducing income inequality, poverty, and local economic development, suggesting that existing initiatives may fall short of fully addressing community needs. Key challenges identified included limited financial literacy, inadequate infrastructure, high transaction costs, mistrust in formal institutions, barriers in digital literacy, and gender-specific social norms that hindered residentsengagement with financial services. Proposed solutions emphasized the integration of AI and ICT in financial services, developing gender-tailored products, simplifying Know Your Customer (KYC) processes, and improving financial and digital literacy. The study recommended that policymakers and financial institutions adopt a targeted, community-driven approach to enhance financial inclusion, with policies addressing local barriers and enhancing financial literacy, infrastructure, and trust in formal financial systems.