This study unravels trends and momentum in banking and mobile money channels and uptake of select services and thereafter draws implications for enhancing financial inclusion through Digital Financial Services (DFS). The Rate of Change (ROC) approach was applied to analyze the growth momentum in banking and mobile money channels in Uganda. Implications for growth momentum in banking and mobile money channels for DFS and financial inclusion was drawn from observing and making informed interpretation of such observed trends and momentum. The findings of this study imply that banks must innovate to increase their contribution towards enhancing financial inclusion. Additional channel innovations, which may infuse banking and mobile money channels, are needed for banking to leverage on growth of mobile money and regain its role in enhancing financial inclusion. Leveraging the application of digital innovations in services such as payments and digitizing alternative channels such as agent banking are likely to increase efficiencies in physical channels and the provision of banking services and thereby increase overall reach and penetration of banking. The fast pace of mobile money penetration is good for speeding up financial inclusion. However, this calls for better regulatory approaches for DFS risk reduction, consumer protection, and protecting mobile money against integrity and financial crimes.

This study sought to ascertain the factors that drive the demand for credit among businesses in the high-density markets in Kampala (Uganda) and its suburbs and draw implications for innovations and application of digital lending. A combination of qualitative and quantitative approaches was applied to profile end retailers and businesses in the high-density markets located in Kampala and its suburbs and to assess the demand for credit at these markets. The market for credit in the high-density market in Kampala and its suburbs can sufficiently support innovation and application of digital lending. Most business owners enthusiastically intended to grow their businesses and are looking for affordable financing opportunities. Drivers of demand for credit arise from the need for inventory management, debtor management and to pay for operating expenses. Short business cycles mean high turnover, hence opportunities for uptake of credits in small amounts and shorter repayment periods. It is recommended for fintechs to improve product features as well as shorten their delivery channels, thereby enhancing convenience in accessing credit. Further studies should explore business models and partnerships for providing affordable credit.

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