Social networks and subjective norms: The Mediating effect of financial self efficacy on financial Inclusion

Abstract

Purpose: The purpose of this study was to examine the mediating effect of financial self- efficacy on the relationship between social networks, subjective norms and financial inclusion among individuals in Uganda.Design/Methodology/Approach: We used a quantitative approach and cross sectional research design with a sample of 400 individuals from urban Central and rural Northern Uganda. Structural equation modeling was used to establish and test the hypothesized rlationships and mediation effects between social networks, subjective norms and financial inclusion.Findings: The results suggest that financial self-efficacy is a mediator of the relationship between social networks, subjective norms and financial inclusion. Furthermore, significant relationships between social networks, subjective norms and financial inclusion were found. Research Limitations: The study was assessed using both potential and actual consumers of financial services collectively. However, if separately assessed, possibly there would be a variation in perceptions or behavioral responses towards financial inclusion.Practical Implications: There is a need to develop and sustain high levels of financial confidence among individuals to enable them use formal financial services through the social networks and subjective norms in which they are embedded and social values they uphold. Originality/Value: The results contribute towards the limited empirical and theoretical evidence regarding the mediating role of financial self-efficacy in explaining financial behaviour.