Reduction of global development cost caused by microfinance inefficiencies

Hes, Tomáš; Srnec, Karel

doi:10.1504/ijef.2011.043349

Cited by 3 publications

(1 citation statement)

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“…Despite internal control systems being vital elements of organizations, commercial banks in Kampala, Uganda, have often been characterized by ineffective and inefficient operations, noncompliance with laws and regulations, policies, and unreliable, inaccurate, and incomplete financial reports due to weak or non-existent internal control systems [4,5]. Research has revealed numerous cases of poor management and misuse of assets and resources, lack of transparency in procurement, inflated expenditures on goods and services, nonimplementation of auditors' reports, lack of adequate accounting records, poor budget utilization, funds manipulation, and sometimes direct embezzlement of funds [6,7]. These inefficiencies result from the increased level of funding channelled through microfinance, which has compromised autonomy and deflected developmental goals to suit donor requirements and the interests of founder members.…”

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Internal Control and Performance of Commercial Banks in Kampala, Uganda: A Case Study of UBA Bank, Kansanga-Kampala, Uganda

Scovia

2024

INOSRHSS

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This study explores the relationship between internal control mechanisms and the performance of commercial banks, focusing on UBA Bank located in Kansanga-Kampala, Uganda. The effectiveness of internal control systems is crucial for ensuring the stability and success of financial institutions, particularly in emerging economies like Uganda. By employing a case study methodology, data was collected through interviews, questionnaires, and document analysis to investigate the internal control practices implemented by UBA Bank and their impact on its performance indicators. The findings reveal a significant correlation between the strength of internal control measures and the financial performance of UBA Bank in Kampala. Through rigorous internal auditing, risk management, and compliance procedures, the bank has managed to mitigate operational risks, enhance transparency, and improve overall performance metrics such as profitability, asset quality, and operational efficiency. Moreover, the study identifies specific challenges and opportunities faced by UBA Bank in implementing effective internal control mechanisms within the unique context of the Ugandan banking sector. The study contributes to the existing literature by providing empirical insights into the role of internal control in shaping the performance of commercial banks in Uganda, particularly within the dynamic environment of Kampala. The findings underscore the importance of continuous evaluation and enhancement of internal control systems to adapt to evolving regulatory frameworks and emerging risks. Additionally, the study offers practical recommendations for UBA Bank and other commercial banks in Kampala to strengthen their internal control mechanisms and optimize performance outcomes in the competitive banking landscape of Uganda. Keywords: Commercial banks, UBA Bank, Kansanga-Kampala, SMEs

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