Factors That Affect Rural Financial Inclusion: A Case of Gambella Town, Gambell Peoples National Regional State, Ethiopia
Abstract
The significance of an inclusive financial system is widely acknowledged in the policy community, and it is now a top priority in many nations, including Ethiopia. This study aimed to analyze the elements that affect financial inclusion in rural areas and how to increase it among customers and residents of Gambella People’s National Regional State in Ethiopia. The population was condensed to include only the staff of the Gambella Saving and Credit Institution in Gambella town. The study employed primary data, and STATA 13 and the Statistical Package of Social Science (SPSS) 23 were used to analyze the data. Data were collected in the form of descriptive and inferential statistics. The study discovered that characteristics that affect financial inclusion had statistically significant and positive relationships with sex, marital status, religion, degree of education, service quality, income, and trust in financial services. However, the proximity to a financial institution’s branch and a resident’s ID card had a detrimental impact on the characteristics that influence financial inclusion. The report also suggests managers and decision-makers at the Oromia Credit and Saving Association should take great care in how they carry out their duties and consistently seek to inspire and raise awareness among the people by emphasizing the value and benefits of being financially integrated.
Keywords: credit and saving institution, factors, financial inclusion, gambella, logit model
References
[1] Aportela F. Effects of Financial Access on Savings by Low-Income People. Banco Mex.
[2] Ibeachu EH. Comparative analysis of financial inclusion: A study of Nigeria and the UK Master Degree. Thesis Int Bus Leeds Metrop Univ Fac Bus Law.
[3] Rakesh M. Economic Growth, Financial Deepening and Financial Inclusion. Annual Bank Conference Hyderabad. 2006
[4] Honohan P. Making finance work for Africa. World Bank Publications; 2008.
[5] Marktanner G, M. The Growth Potential from Financial Inclusion. Atlanta Fed/GSU International Development Economics Workshop.
[6] Singh AB, Tandon P. Financial Inclusion in India: an Analysis. Int J Mark Financ Serv Manag Res. 2012;1:41–54.
[7] Boit JK. Factors influencing financial inclusion in rural Kenya: a case study of Kenya commercial bank agent outlets in Marakwet west sub county. 2015 [cited 2024 Feb 21]; Available from: http://erepository.uonbi.ac.ke/handle/11295/905238. World Bank. World Development Indicators.
[8] Wambua SM, Datche E. Innovative Factors That Affect Financial Inclusion in Banking Industry.A Case Study of Equity Bank Mombasa County, Kenya. Int J Sci Basic Appl Res. 2013;12:37–56.
[9] Allen F, Demirguc-Kunt A, Klapper L, Martinez Peria MS. The foundations of financial inclusion: Understanding ownership and use of formal accounts. J Financ Intermediation [Internet]. 2016;27:1–30. Available from: http://dx.doi.org/10.1016/j.jfi.2015.12.003
[10] Timbula MA, Mengesha T, Mekonnen Y, Kebede M. Financial inclusion and its determinants among households in Jimma zone of oromia regional state, Ethiopia. Int J Commer Fin [Internet]. 2019. 5(2):106–19. Available from: https://ijcf.ticaret.edu.tr/index.php/ijcf/article/view/124
[11] Aliyu U, Bashar AU, Usman U. Predictors for risk factors of diabetes: binary logistic regression model approach. Int J Stat Distrib Appl. 2021;7(4):89–94.
[12] Eisenberg MA. The duty of good faith in American corporate law. Eur Co Fin Law Rev [Internet]. 2006;3(1):1–44. Available from: http://dx.doi.org/10.1515/ecfr.2006.001
[13] OECD. Improving Financial Literacy: Analysis of Issues and Policies: OECD.
[14] Sirken. Ministry of Finance audit findings on M-PESA money transfer services.
[15] Gitonga CN, Njeru A. Assessment of Factors Influencing Adoption of Agency Banking in Kenya: The Case of Kajiado North Sub County. Int J Bus Commer. 2014;3:91–111.
[16] Abreu, A.G., & Greenstein RK. Defining Income. 2011.
[17] Demirgüç-Kunt A, Singer D. Financial inclusion and inclusive growth: A review of recent empirical evidence. Political Economy - Development: International Development Efforts & Strategies eJournal [Internet]. 2017. Available from: https://papers.ssrn.com/abstract=2958542
[18] Arnold J. Inclusive financial market: is a transformation way under Kenya, development policy review. 2012;30:719–748.
[19] S L. Financial Exclusion and Access to Credit.
[20] Moges F, Senapathy M, Alves P. Determinants of Urban Households Saving: The Case of Wolaita Sodo Town, Southern Ethiopia. 2021.
[21] The global findex data base.
[22] Kumar N. Financial Inclusion and its Determinants: evidence from India. J Financ Econ Policy. 2013;5(1):4–19.
[23] Laha A, Kuri PK. Determinants of financial inclusion: A study of some selected districts of West Bengal, India. Indian Journal of Finance. 2011;5:29–36.
[24] Somure I, Tchana T, Kengne T. Analysis of the determinants of financial inclusion in central and West African. Journal of Transactional Corporations Review. 2016;8:231– 249.
[25] Zins A, Weill L. The determinants of financial inclusion in Africa. Rev Dev Financ. 2016;6(1):46–57.
[26] Kenya CB. Guidelines on Agent Banking. 2011.
[27] Leedy PD, Ormrod J. Practical Research, Planning and Design. New York: Pearson; 2010.
[28] Potrich ACG, Vieira KM, Kirch G. Determinants of financial literacy analysis of the influence of socio economic, demographic. Revista contabilidade and finance. 2015; 26: 362–377.
[29] D G. Econometria. 4th ed. Rio Janeiro: Elsevier.
[30] A AM. The Determinants Of Financial Inclusion In Western Africa: Insights From Ghana Research Journal Of Finance And Accounting. 2013;4:1–10.
[31] Tabachnick BG, Fidell L. Using multivariate statistics. 6th ed. 2013.
[32] Kline RB. Principles and practice of structural equation modeling. New York: The Guildford Press.
[33] Park HA. An introduction to logistic regression: from basic concepts to interpretation with particular attention to nursing domain. J Korean Acad Nurs. 2013 Apr;43(2):154– 64.
[34] Chan YH. Biostatistics 202: logistic regression analysis. Singapore Med J. 2004 Apr;45(4):149–53.
[35] Midi SKS and H. Importance of assessing the model adequacy of binary logistic regression. J Appl Sci. 2010;10:479–86.