Determinants of Financial Inclusion among Youth in Uganda: Evidence from Community-based Monitoring System Data

We used a quantitative approach to analyze the determinants of financial inclusion among young men and women in Uganda based on microdata from a CBMS census carried out in Katakwi District. Using a population of 3,398 youth, we used proportions and t-tests to analyze the barriers that financially excluded individuals face as well as saving mechanisms among youth. A binary regression model was used to identify socioeconomic and demographic characteristics that affected financial inclusion (or exclusion). The results showed that women, the uneducated, financial illiterates, and unemployed youth were more financially excluded than men, the educated, financial literates, and the employed. The main reason for the exclusion of youth was lack of an income, and their main saving mechanism was saving in their homes. The identification of individual characteristics that may affect financial inclusion can provide useful evidence for policies that promote a more inclusive financial system. We offer recommendations to local government for increasing the skills of youth that would allow them to sustain themselves and even join the formal banking/monetary sector.