2014 | Uganda
Financial capability for rural households in Masindi, Uganda: An exploration of the impact of internal and external capabilities using multilevel modeling
RELATED INITIATIVES
Economic Security
Financial Inclusion
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In recent years, discussion about the financial capability of rural households has increased. Although studies have conceptualized what financial capability means, there is a dearth of empirical evidence that addresses how the different components of financial capability interact to improve savings outcomes, especially in rural households in sub-Saharan Africa. In this article, the authors use data from an asset-building project in Masindi, Uganda, and a multilevel logistic regression approach to model the likelihood of households contributing to a savings account in a bank. The advantage of a multilevel modeling approach is that it will allow for understanding how contextual factors, such as proximity to the bank and the presence of informal savings mechanisms, affect how households save. Findings suggest that community characteristics affect rural households’ financial capability. The study also shows that financial education and the existence of informal savings groups are associated with the households’ saving behaviors and that internal and external factors are important in shaping them. The implications of the findings and the importance of using the correct method of analysis are discussed.
Chowa, G., Ansong, D., & Despard, M. (2014). Financial capability for rural households in Masindi, Uganda: An exploration of the impact of internal and external capabilities using multilevel modeling. Social Work Research, 38(1), 19-35. doi: 10.1093/swr/svu002.