Financial literacy and financial inclusion: an analysis of women owned micro and small enterprises in Namugongo division, Kira municipality

Abstract

The study investigated the influence of financial literacy on financial inclusion among women-owned Micro and Small Enterprises (MSEs) in Namugongo Division, Kira Municipality. The study objectives were to investigate the influence of financial knowledge, skills and attitudes on the financial inclusion of Micro and Small Enterprises owned by women in the Namugongo Division. The study employed a cross-sectional quantitative survey design to obtain information from women operating MSEs. A sample size of 293 research respondents was considered in this research, selected using a stratified and simple random sampling method. The findings highlighted that financial knowledge and financial Attitudes significantly and positively predict financial inclusion at a significance level of 5%. However, financial skills had no significant relationship with the financial inclusion of women-owned MSEs in the Namugongo Division (P-value>0.05). The findings also showed that financial knowledge, financial attitudes, and financial skills account for only 57.1% of the variations in financial inclusion. The study further revealed that firm size partially mediated the relationship between financial literacy and financial inclusion. The study concluded that financial knowledge and financial attitudes play an instrumental role in enhancing the financial inclusion of MSEs owned by women in the Namugongo Division. The study therefore recommends that the government should draw a lot of emphasis on financial literacy by providing practical learning tools to women operating MSEs, it should also develop a collaborative national strategy for financial literacy which works with small and micro enterprises to increase protection for women seeking financial products and services from financial scammers. This is imperative in enhancing the intensity of financial inclusion activities in the country.