The effect of commercial bank services on the welfare of the clients in Uganda :

Abstract

Commercial banks offer financial services to improve the welfare of its clients with the view towards achieving better welfare. Hence, this study sought to establish the effect that commercial bank services for example the financial savings mobilization, access to credit of finance and the challenges facing the commercial banks when delivering financial services to its clients and their possible solutions had on the welfare of the clients and the factors that affects the client’s welfare for example reduction in saving tendencies as a result of high interest rates, Bankruptcy, Repayment default, Increase in consumption pattern, Insecurity in Tororo Municipality-Uganda. The research study comprised of about four commercial banks operating within TMU. The researcher used the following criteria for selecting the commercial banks: date of publication, reliability of the source of information, the extent of contribution of the text to the development of the research area. Even if it was a government policy to ensure that all people should access the financial services but the four commercial banks (Stanbic bank, Centenary bank, House Finance Trust bank, and DFCU bank) in Tororo Municipality have continued to suffer from the challenges like defaulters, poor infrastructures, and inadequate capital which have led to moderately low rate of welfare improvement of its clients in TMU. The objectives were to investigate the effect of access to credit of finances on client’s welfare in Tororo municipality, to assess the effect of savings mobilization by Commercial banks on the welfare of clients in Tororo Municipality, and to find out the challenges facing the commercial banks and their possible solutions when they were to deliver financial services to its clients in Tororo Municipality. The study employed longitudinal-sectional research design. The data were collected from clients in different parts of Tororo Municipality and in all the four Commercial banks operating in TMU. A sample of 30 respondents were determined from 33 target population. The data was analyzed using frequencies, mean, standard deviation and percentages. The purpose of access to credit of financial services by the clients of commercial banks affect their welfare by 47.8% and this implied high effect, financial savings mobilization had a 56.5% effect on the client’s welfare improvement, and the challenges that affect the commercial banks were high. On the first objective, the researcher established high effect on the access to credit of financial services on the welfare improvement of the clients. This meant that access to credit of financial services was more significant to the client’s welfare. The effect on the second research objective that was established from financial saving mobilization on the welfare improvement was high, the researcher concluded that the level of operations through savings were high which indicates that welfare improvement can be attained through financial savings mobilization. From the third objective, the researcher concluded that there was a high challenge that affects the operation of commercial banks when they were to deliver financial services to its clients in TMU. The researcher recommended that there is need for government interventions to curb the challenges facing the commercial banks.