Socioeconomic factors affecting banking penetration among university students in Uganda: case study, Makerere University

Abstract

This study investigates Socioeconomic Factors Affecting Banking Penetration among University Students in Uganda with major emphasis on Makerere University. The sampling frame was the students of Makerere University. A sample of 138 respondents was calculated using Cochran formula and a simple random sampling technique was used to draw samples. Data was collected using Kobo collect software and analyzed using STATA version 15.0. descriptive statistics, Chi-square test and binary logistic method were used to examine the relationship between socioeconomic factors and having bank account. From the findings, older age groups were 1.5 times more likely to own a bank account compared to younger students. Students with higher educational qualifications exhibit a 2.3 times higher likelihood of owning a bank account. Those with increased monthly incomes are 1.8 times more likely to have a bank account. Parental education levels positively correlate with students' likelihood of owning a bank account. The study concluded that, older age groups, higher educational qualifications, increased monthly incomes, and parental education levels were significant predictors of bank account ownership among university students. Moreover, the convenience of technology-based banking solutions and easy access to financial resources emerged as crucial factors driving students' utilization of formal banking services. The study’s recommendations were provided to enhance financial inclusion among university students, including the implementation of financial education programs, technology integration, income generation opportunities, parental engagement, accessibility improvements, and partnerships with community organizations.