Factors Influencing Saving Mobilization in Saccos. A Study of Financial Literacy, Social Factors and Mobile Technology in Mukono District, Uganda.

Abstract

This study explores the factors influencing saving mobilization within Savings and Credit Cooperative Organizations (SACCOs) in Mukono District, Uganda, focusing on financial literacy, social factors, and mobile technology. While SACCOs have been instrumental in fostering financial inclusion, particularly in underserved communities, their performance in mobilizing savings remains suboptimal. The research investigates how factors such as financial literacy, peer influence, societal pressure, and mobile technology shape saving behaviors among SACCO members. Despite the potential of these elements to improve savings, Uganda's SACCOs continue to struggle with low deposit levels, pointing to the need for a deeper understanding of these influences and strategies for improvement. The study employed a mixed-methods approach, combining both qualitative and quantitative techniques to gather data from 214 respondents across 16 registered SACCOs in Mukono District. The research findings revealed that while many respondents displayed confidence in their financial literacy, a significant portion lacked a full understanding of key financial concepts. Social factors, including family and peer influence, were identified as strong motivators for saving, with 68.3% of respondents acknowledging their role in shaping saving behaviors. Additionally, mobile technologies, particularly mobile money services, played a significant role in facilitating saving mobilization, with 65.2% of respondents using these services for SACCO transactions. The study concluded that financial literacy, social dynamics, and mobile technology are crucial to improving saving mobilization within SACCOs. It highlighted the need for improved governance structures, targeted financial education programs, and better access to mobile services to enhance saving behaviors. By addressing gaps in financial literacy and leveraging mobile technologies, SACCOs can foster greater economic growth and financial inclusion in Uganda. The research offers practical recommendations for SACCOs to enhance their effectiveness and sustainability, ultimately contributing to the financial empowerment of their members.