Agency banking practices, financial literacy, and financial inclusion in Pallisa district

Abstract

This study investigated the mediating role of financial literacy in the relationship between agency banking practices and financial inclusion in Pallisa district. Anchored on public good theory and dissatisfaction theory of financial inclusion (Ozili, 2020), the study investigated the relationship between agency banking practices, financial literacy, and financial inclusion. From a population of 300, the study derived a sample of 169 which yielded a response rate of 90.5%. Data was collected using a structured questionnaire and analyzed using SPSS v 27. The researcher used descriptive statistics, correlation, regression, and mediation analysis to analyse data. The findings revealed that there is a positive and significant relationship between agency banking practices and financial inclusion (r=0.631, p<0.01). Additionally, financial literacy was significantly associated with financial inclusion (r=0.681, p<0.01) and was positively influenced by agency baking practices (r=0.527, p<0.01). Furthermore, financial literacy mediated the relationship between agency banking practices and financial inclusion. Based on the findings, the study concluded that financial literacy is a mechanism that explains the relationship between agency banking practices and financial inclusion in Pallisa district. Therefore, the study recommends the expansion of the agency banking networks alongside robust financial literacy programs to enhance financial inclusion.