Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Social network

Social network The purpose of this paper is to test for the predictive power of each of the dimensions of social network in explaining financial inclusion of the poor in rural Uganda.Design/methodology/approachThe study employed a cross-sectional research design and data were collected from a total of 400 poor households located in Northern, Eastern, Central and Western Uganda. The authors adopted ordinary least square hierarchical regression analysis to test for the predictive power of each of the dimensions of social network in explaining financial inclusion of the poor in rural Uganda. The effects were determined by calculating the significant change in coefficient of determination (R2) between the dimensions of social network in explaining financial inclusion. In addition, analysis of variance was also used to test for variation in perceptions of the poor about being financially included.FindingsThe findings revealed that the dimensions of ties and interaction significantly explain financial inclusion of the poor in rural Uganda. Contrary to previous studies, the results indicated that interdependence as a dimension of social network is not a significant predictor of financial inclusion of the poor in rural Uganda. Combined together, the dimensions of social network explains about 16.6 percent of the variation in financial inclusion of the poor in rural Uganda.Research limitations/implicationsThe study was purely cross-sectional, thus, ignoring longitudinal survey design, which could have investigated certain characteristics of the variable over time. Additionally, although a total sample amounting to 400 poor households was used in the study, the results cannot be generalized since other equally marginalized groups such as the disabled persons, refugees, and immigrants were not included in this study. Furthermore, the study used only the questionnaire to elicit responses from the respondents. The use of interview was ignored during data collection.Practical implicationsPolicy makers, managers of financial institutions, and financial inclusion advocates should consider social network dimensions of ties and interaction as conduits for information flow and sharing among the poor including the women and youth about scarce financial resources like loans. Advocacy towards creation of societal network that brings the poor together in strong and weak ties is very important in scaling up access to and use of scarce financial services for improving economic and social well-being.Originality/valueContrary to previous studies, this particular study test the predictive power of each of the dimensions of social network in explaining financial inclusion of the poor in rural Uganda. Thus, it methodologically isolates the individual contribution of each of the dimensions of social network in explaining financial inclusion of the poor. The authors found that only ties and interaction are significant predictors of financial inclusion of the poor in rural Uganda. Therefore, the findings suggest that not all dimensions of social network are significant predictors of financial inclusion as opposed to previous empirical findings. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png African Journal of Economic and Management Studies Emerald Publishing

Social network

Download PDF
19 pages

Loading next page...
 
/lp/emerald-publishing/social-network-MoR0O0VJRk
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2040-0705
DOI
10.1108/ajems-07-2017-0157
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to test for the predictive power of each of the dimensions of social network in explaining financial inclusion of the poor in rural Uganda.Design/methodology/approachThe study employed a cross-sectional research design and data were collected from a total of 400 poor households located in Northern, Eastern, Central and Western Uganda. The authors adopted ordinary least square hierarchical regression analysis to test for the predictive power of each of the dimensions of social network in explaining financial inclusion of the poor in rural Uganda. The effects were determined by calculating the significant change in coefficient of determination (R2) between the dimensions of social network in explaining financial inclusion. In addition, analysis of variance was also used to test for variation in perceptions of the poor about being financially included.FindingsThe findings revealed that the dimensions of ties and interaction significantly explain financial inclusion of the poor in rural Uganda. Contrary to previous studies, the results indicated that interdependence as a dimension of social network is not a significant predictor of financial inclusion of the poor in rural Uganda. Combined together, the dimensions of social network explains about 16.6 percent of the variation in financial inclusion of the poor in rural Uganda.Research limitations/implicationsThe study was purely cross-sectional, thus, ignoring longitudinal survey design, which could have investigated certain characteristics of the variable over time. Additionally, although a total sample amounting to 400 poor households was used in the study, the results cannot be generalized since other equally marginalized groups such as the disabled persons, refugees, and immigrants were not included in this study. Furthermore, the study used only the questionnaire to elicit responses from the respondents. The use of interview was ignored during data collection.Practical implicationsPolicy makers, managers of financial institutions, and financial inclusion advocates should consider social network dimensions of ties and interaction as conduits for information flow and sharing among the poor including the women and youth about scarce financial resources like loans. Advocacy towards creation of societal network that brings the poor together in strong and weak ties is very important in scaling up access to and use of scarce financial services for improving economic and social well-being.Originality/valueContrary to previous studies, this particular study test the predictive power of each of the dimensions of social network in explaining financial inclusion of the poor in rural Uganda. Thus, it methodologically isolates the individual contribution of each of the dimensions of social network in explaining financial inclusion of the poor. The authors found that only ties and interaction are significant predictors of financial inclusion of the poor in rural Uganda. Therefore, the findings suggest that not all dimensions of social network are significant predictors of financial inclusion as opposed to previous empirical findings.

Journal

African Journal of Economic and Management Studies – Emerald Publishing

Published: Aug 14, 2018

Keywords: Financial inclusion; Social network; Poor households; Rural Uganda; Information diffusion; Strength of weak ties

References

  • Changing economic power in the world economy research and information systems
    Agarwal, M.
  • Using repayment data to test across models of joint liability lending
    Ahlin, C.; Townsend, R.
  • Informal finance for private sector development in Sub Africa
    Aryeetey, E.
  • Communication patterns in task-oriented groups
    Bavelas, A.
  • Ethnic networks and access to credit: evidence from the manufacturing sector in Kenya
    Biggs, T.; Raturi, M.; Srivastava, P.
  • Potential power and power use: an investigation of structure and behavior
    Brass, D.J.; Burkhardt, M.E.
  • A note on sociometric order in the general social survey network data
    Burt, R.
  • Kinds of relations in American Discussion networks
    Burt, R.S.
  • Structural holes versus network closure as social capital
    Burt, R.S.
  • What determines financial inclusion in Sub-Saharan Africa?
    Chikalipah, S.
  • Social interdependence theory
    Colchester, J.
  • The locus of strong ties
    Ericksen, E.; Yancey, W.
  • Financial inclusion brief
  • Membership has its privileges: the effect of social capital and neighbourhood characteristics on the earnings of microfinance borrowers
    Gomez, R.; Santor, E.
  • The impact of social structure on economic outcomes
    Granovetter, M.
  • The strength of weak ties
    Granovetter, M.S.
  • ‘The strength of weak ties.’ A network theory revisited
    Granovetter, M.S.
  • Polanyi Symposium: a conversation on embeddedness
    Granovetter, M.S.
  • Social network analysis: introduction and resources
    Gretzel, U.
  • Does social capital help the poor? A synthesis of findings from the local level institutions studies in Bolivia, Burkina Faso and Indonesia
    Grootaert, C.
  • Social capital and access to credit: evidence from Uganda
    Heikkilä, A.; Kalmi, P.; Ruuskanen, O.P.
  • Geniuses together
    Homans, J.
  • Financial access and exclusion in Kenya and Uganda
    Johnson, S.; Nino-Zarazua, M.
  • Social connections and group banking
    Karlan, D.S.
  • The role of social capital to access to rural credit in Vietnam
    Khanh, H.L.P.
  • Effects of social capital on credit access among Cocoa Farming households in Osun State, Nigeria
    Lawal, J.O.; Omonona, B.T.; Ajani, O.I.Y.; Oni, A.O.
  • Structuralism versus individualism: part 1, shadowboxing in the dark
    Mayhew, B.H.
  • Cents and sociability: household income and social capital in rural Tanzania
    Narayan, D.; Pritchett, L.
  • Social networks and credit access in Indonesia
    Okten, C.; Osili, U.
  • Comment on Mark Granovetter’s ‘The Strength of Weak Ties: A Network Theory Revisited’
    Pool, I.
  • Interorganizational collaboration and the locus of innovation: networks of learning in biotechnology
    Powell, W.W; Koput, K.W; Smith-Doerr, L.
  • National Household Survey: National Household Statistical Forecast Brief
  • Imperfect information, social capital and the poor’s access to credit
    van Bastelaer, T.
  • Effects of social interaction in financial markets: ‘what are the effects of social interaction in financial markets?’
    Verweij, J.I.
  • Building institutions for markets
  • A survey on access to and use of financial services in 152 countries around the world
  • World Bank development indicators database
  • Social capital and farmer welfare in Malaysia
    Yokoyama, S.; Ali, A.K.