Isabirye Emmanuel2025-08-132025-08-132025-08-12https://hdl.handle.net/20.500.11951/1741This research tackles the pressing ethical concerns of using Artificial Intelligence (AI) in Uganda’s microcredit sector, namely to develop an Adaptive Sensitive Reweighting (ASR) model to mitigate algorithmic bias and promote equitable access to credit. Traditional credit scoring models - and AI algorithms trained on Western-biased data - discriminate against marginalized groups because they are based on formal financial records, reinforcing structural disadvantages. By iterative engagement with Ugandan policymakers, lenders, borrowers, and AI experts, we identify the most significant ethical concerns and specify context-specific fairness metrics. The ASR approach adaptively adjusts weights for sensitive features like collateral values and transaction history during model training to enhance fairness. Experimental outcomes on a typical credit scoring dataset demonstrate ASR’s success: the inclusion rate of disadvantaged borrowers is enhanced by 15% with predictive accuracy maintained, and significant improvements on key fairness metrics. The research provides actionable policy recommendations on implementing ASR-based AI systems in Uganda’s microfinance sector to drive financial inclusion and sustainable development. This study contributes to emerging Majority World scholarship on AI ethics by demonstrating the necessity of situating ethical frameworks and valuing stakeholder perspectives to develop equitable, inclusive AI systems. Our findings offer valuable insights for policymakers, microfinance institutions, and AI practitioners who aim to implement responsible AI in Uganda’s Microcredit sector.enAI ethicsAI governancemicrocreditfinancial inclusionbias mitigationfairnessUgandaThesis