Financial Intermediation by Microfinance Banks in Rural Sub-Saharan Africa: Financial Intermediation Theoretical Approach

PurposeDrawing from the fact that institutions act as incentives and disincentives to human behaviour in financial markets, the purpose of this study is to examine the moderating role of institutional pillars in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda.Design/methodology/approachThe study used cross-sectional research design and data were collected from the poor residing in rural Uganda. Statistical package for social sciences was used to analyse the data. Descriptive statistics, correlations and regression analyses were generated. Besides, ModGraph excel programme was adopted to graphically explain the moderating role of institutional pillars in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda.FindingsThe results revealed that institutional pillars of regulative (formal rules), normative (informal norms) and cultural cognitive (cognition) significantly moderate the relationship between financial intermediation and financial inclusion of the poor. Furthermore, the results also indicated that financial intermediation and institutional pillars have significant effects on financial inclusion of the poor in rural Uganda.Research limitations/implicationsThe study focuses on only cross-sectional design, thus, leaving out longitudinal study. Future research using longitudinal data that explore behaviours of the poor over time could be useful. In addition, only quantitative data were used to measure variables under study and use of qualitative data were ignored. Thus, further studies using qualitative data are feasible.Practical implicationsPolicymakers and advocates of financial inclusion in a developing country such as Uganda should adopt institutional pillars (regulative, normative and cultural-cognitive) in promoting financial intermediation in rural areas. The institutional pillars working in combination set the “rule of the game” or “humanly devise constraints” that guide economic exchange by promoting and limiting certain actions of actors in underdeveloped financial market as stipulated by North (1990) and Scott (1995).Originality/valueTo the best of the authors’ knowledge, this is the first attempt to examine the moderating role of institutional pillars under the theory of institutions in the relationship between financial intermediation and financial inclusion of the poor in a developing country setting. Indeed, institutions guide contract enforceability and information sharing in human interaction to lower transaction cost in the financial markets. This is missing in literature and theory of financial intermediation in promoting financial inclusion, especially in rural Uganda.

Purpose: Financial inclusion can considerably promote cocoa production and provide a buffer for the escape from poverty traps for cocoa-growing economies like Cameroon. However, the Southwest region of Cameroon still experiences a low level of cocoa production and poverty primarily due to financial exclusion. This article explores the drivers of financial inclusion in the region. Method: A stratified multistage sampling technique was used to survey 380 cocoa producers in the main cocoa-producing areas in the region through semi-structured questionnaires. Descriptive statistics were used to analyze the socio-economic variables and the probit model to analyze the drivers of financial inclusion, subject to the three major dimensions of financial inclusion; access to, use, and quality of financial services. Results: On average, the long distance of financial institutions (9.3 km), intermediate farm sizes (2.6 ha), and low annual income (1,125,863 FCFA) negatively influenced financial inclusion resulting in just 16.6% of farmers being financially included. The findings also revealed that financial inclusion is significantly enhanced by an increase in income, farm training, the closeness of formal financial institutions (FFIs), larger household size, and small-scale production at a 1% significance level, and more years of farming experience at 5%. Moreover, 51.3% of the major constraints to financial inclusion were accounted for by lack of collateral security, distant FFIs, and low income. Implications: Reducing the distance of FFIs by establishing more institutions with considerations on collateral, increasing income through extension services like farm training, and sound agronomic practices will enhance financial inclusion. Originality: The uniqueness of this study lies in the context of the socio-political crisis during which cocoa producers were interviewed and exploring how the crisis influenced financial inclusion through a host of factors. Moreover, besides just access to credit as considered by most studies in Cameroon, the current study considers the use and quality of formal financial services as well.

Financial inclusion has been recognized as a poverty reduction tool, and many economies have taken it up as a national agenda. To achieve the expected levels of financial inclusion, governments have worked with financial intermediaries to reach the expected target group, the unbanked poor. As per the financial intermediation theory, the role of financial intermediaries is to minimize the information asymmetry in the financial system. To enhance financial inclusion, many countries and financial institutions have embraced information and communication technology (ICT). ICT has been recognized as a tool that has worked greatly toward enhancing sharing of information at a low cost and that has thus helped in improving financial inclusion. Though many countries have achieved high levels of financial inclusion through ICT, the levels of poverty have not declined. It was thus important to establish the relationship between ICT, financial intermediation, and household investment. This study methodology was a review of the literature on financial inclusion, financial intermediation, ICT, and household investment. From this study, it was noted that ICT is helping in financial intermediation and thus more people can access financial services. Unfortunately, the levels of ICT capability among the poor are low, and in that case, the poor are not able to utilize financial services offered through ICT platforms to undertake household investment. This is the reason as to why, despite the high levels of financial inclusion, the poor still remain poor. This study recommends that the government should ensure that the levels of ICT among the populace are high. Financial institutions on the other hand should provide financial services with more user-friendly platforms.

PurposeThe main purpose of this study is to establish the mediating effect of social network in the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries.Design/methodology/approachThe study adopted a cross-sectional research design and data were collected from the poor who resides in rural Uganda. Structural equation modelling (SEM) through analysis of moment structures (AMOS) was used to analyze the data. Bootstrap approach with 5,000 samples was run to establish the mediating effect of social network in the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries.FindingsThe results showed that social network significantly and positively mediate the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries. In addition, financial literacy also has a direct significant and positive effect on financial inclusion. Overall, the findings suggest that the presence of social network fully mediate the effect of financial literacy on financial inclusion of the poor by microfinance banks in developing countries.Research limitations/implicationsThis study adopted a cross-sectional research design and data were collected using a semi-structured questionnaire. Future studies could adopt longitudinal research design to establish the dynamic characteristics of the samples under study over time. Besides, this study collected data from only poor households who were clients of microfinance banks located in rural Uganda. It ignored the other section of the population who were not the poor. Therefore, future studies could use the other section of the population who are clients of commercial banks.Practical implicationsThe advocates of financial literacy and managers of microfinance banks in developing countries should ensure using existing local structures such as community and village associations to conduct financial literacy training. The village associations help in mobilizing members who are close-knit based on the existing societal ties that can be used as a channel for disseminating vital financial literacy information. Indeed, financial literacy workshops, seminars, and business clinics can be easily conducted to individuals who are members of the village associations.Originality/valueThis paper integrates social network theory in the relationship between financial literacy and financial inclusion of the poor by microfinance banks in developing countries. Social network acts as a conduit through which financial knowledge and skills flow to increase the scope of financial inclusion of the poor in developing countries.

PurposeThe purpose of this paper is to establish the mediating role of social capital in the relationship between financial intermediation and financial inclusion in rural Uganda.Design/methodology/approachThe current study used cross-sectional research design and a semi-structured questionnaire was used to collect data for this study. The study applied structural equation modeling through bootstrap approach in AMOS to establish the mediating role of social capital in the relationship between financial intermediation and financial inclusion.FindingsThe results indicated that social capital significantly mediates the relationship between financial intermediation and financial inclusion in rural Uganda. Therefore, it can be deduced that social capital among the poor play an important role in promoting financial intermediation for improved financial inclusion in rural Uganda.Research limitations/implicationsAlthough the sample was large, it may not be generalized to other segments of the population. Data were collected from only poor households located in rural Uganda. Besides, the study was cross-sectional, thus, limiting efforts in investigating certain characteristics of the sample over time. Perhaps future studies could adopt the use of longitudinal research design.Practical implicationsFinancial institutions such as banks should rely on social capital as a substitute for physical collateral in order to promote financial inclusion, especially among the poor in rural Uganda.Originality/valueThis study provides empirical evidence on phenomenon not studied in rural areas in Sub-Saharan Africa where the poor use social capital embedded in customs and norms for doing business. The results highlight the importance of social capital in mediating the relationship between financial intermediation and financial inclusion of the poor in rural Uganda.

PurposeThe purpose of this paper is to establish the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda.Design/methodology/approachThe paper uses structural equation modeling (SEM) through bootstrap approach constructed using analysis of moment structures to test for the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. Besides, the paper adopts Baron and Kenny’s (1986) approach to establish whether conditions for mediation by collective action exist.FindingsThe results revealed that collective action significantly mediates the relationship between financial intermediation and financial inclusion of the poor in rural Uganda. The findings further indicated that the mediated model had better model fit indices than the non-mediated model under SEM bootstrap. Furthermore, the results showed that both collective action and financial intermediation have significant and direct impacts on financial inclusion of the poor in rural Uganda. Therefore, the findings suggest that the presence of collective action boost financial intermediation for improved financial inclusion of the poor in rural Uganda.Research limitations/implicationsThe study used quantitative data collected through cross-sectional research design. Further studies through the use of interviews could be adopted in future. Methodologically, the study adopted use of SEM bootstrap approach to establish the mediating effect of collective action. However, it ignored the Sobel’s test and MedGraph methods. Future studies could adopt the use of alternative methods of Sobel’s test and MedGraph. Additionally, the study focused only on semi-formal financial institutions. Hence, further studies may consider the use of data collected from formal and informal institutions.Practical implicationsPolicy makers and managers of financial institutions should consider the role of collective action in promoting economic development, especially in developing countries. They should create structures and design financial services and products that promote collective action among the poor in rural Uganda.Originality/valueAlthough several scholars have articulated financial inclusion based on both the supply and demand side factors, this is the first study to test the mediating role of collective action in the relationship between financial intermediation and financial inclusion of the poor in rural Uganda using SEM bootstrap approach. Theoretically, the study combines the role of collective action with financial intermediation to promote financial inclusion. Financial intermediation theory ignores the role played by collective action in the intermediation process between the surplus and deficit units.

This study aimed to explore financial inclusion in its various dimensions (utilization of financial services, quality of financial services, and access to financial services) and its impact on the financial performance of commercial banks in Iraq. To achieve the study objectives, the researcher prepared a questionnaire, which was distributed to a sample of 307 customers in Iraqi commercial banks. The study employed a descriptive-analytical approach, and data was collected, analyzed, and hypotheses were tested using the Statistical Package for the Social Sciences (SPSS Version 26). Among the key findings of the study was the significant impact of utilization of financial services, quality of financial services, and access to financial services on the financial performance of Iraqi commercial banks. One of the crucial recommendations of the study emphasized the necessity for these banks to focus on providing highly reliable, trustworthy, and secure financial services to customers to enhance their confidence and trust when dealing with the bank.REFERENCES: Alliance for financial inclusion AFI, (2013), Alliance for financial inclusion Policy Model: AFI Core Set of Financial Inclusion Indicators, https://www.financialinclusion.ps/cached_uploads /download/2019/10/24/fidwg-core-indicators-final-pdf-1571930032.pdf.Auwal Musa, Shafiu Abubakar Kurfi, and Haslinda Hassan, (2015), The Impact of Online Banking on the Performance of Nigerian Banking Sector”, International Conference on E-Commerce, 1-6.GPFI, (2014), Financial Inclusion Action Plan (FIAP).Barra, c, Zotti, R. (2017). Bank performance, financial stability and Market competition: Do cooperative and Non –Cooperative Banks Behave Differenity? CELPE Discussion papers 143, CELPECentre of Labor Economics and Economic policy, University of Salerno, Italy.Ben Moussa Mohamed Aymen, (2013),” Impact of capital on financial performance of banks: the case of Tunisia", Banks and Bank Systems, Volume 8, (4), 47-54.GPFI. (2014). Financial Inclusion Action Plan (FIAP). http://www.g20.utoronto.ca/2014/6%202014%20Financial%20Inclusion%20Action%20Plan.pdf.Mostak Ahamed, M., 2017. "Asset quality, non-interest income, and bank profitability: Evidence from Indian banks,"Economic Modelling, Elsevier, 63(5), 1-14.Peter Morgan and Victor Pontines, (2014).” Financial Inclusion and Financial Stability”, Working Paper, January.Sudipta Bose, Amitav Saha,Habib Zaman Khan and ShajulIslam, .(2017). ” Non-Financial Disclosure and Market-based Firm Performance: The Initiation of Financial Inclusion”, Journal of Contemporary Accounting &Economics, 13, 263-281.

Purpose This study explores the impact of financial inclusion and globalization on renewable energy consumption in Sub-Saharan Africa (SSA). Given the urgent need for sustainable energy solutions in the face of climate change, the research investigates how economic integration, social exchanges, political cooperation and improved financial services contribute to the adoption of renewable energy sources in the region. Design/methodology/approach The study utilizes a comprehensive dataset spanning from 1995 to 2022, employing a two-step system generalized method of moments to rigorously analyze the relationships. Both aggregated measures (overall financial inclusion and globalization indices) and disaggregated components (economic, social and political globalization; financial access, usage and quality) are examined to provide a nuanced understanding of the factors driving renewable energy consumption. Findings The analysis reveals a robust and significant positive relationship between renewable energy consumption and the indices of financial inclusion and globalization. Economic globalization enhances renewable energy adoption by facilitating trade and investment flows. Social globalization promotes knowledge transfer and cultural exchanges that support renewable energy technologies. Political globalization fosters international cooperation and policy alignment, which are crucial for renewable energy initiatives. Financial inclusion, through improved access, usage and quality of financial services, directly supports investments in renewable energy infrastructure and projects. Practical implications The findings underscore the need for Sub-Saharan African governments to implement policies that reduce trade barriers to facilitate the import of renewable energy technologies and attract foreign direct investment. Encouraging technology transfer and educational exchanges will build local expertise and capacity in renewable energy. Enhancing the accessibility, usage and quality of financial services through regulatory reforms and digital financial innovations will enable greater investment in renewable energy projects. Originality/value This study contributes to the existing literature by integrating Sustainable Development Theory and Diffusion of Innovation Theory to explain renewable energy adoption in SSA. It is among the first to empirically examine the combined and disaggregated effects of financial inclusion and globalization. The findings provide new theoretical insights and fill a significant empirical gap by demonstrating how local financial systems and global flows of technology and information can together foster a transition toward renewable energy in developing economies.

Currently the existence of PT. Pos Indonesia as a postal service provider is increasingly under threat because there are competitors who also provide similar services such as courier and logistics services and there are also quite a lot of assessments indicating dissatisfaction with the services provided. This fact encouraged PT. Post to continue to improve the quality of postal services, especially in financial services, Fund distribution and Bank channeling, so that it can continue to compete with competitors providing other courier and logistics services. The aim of the research is to describe the quality of Fund Distribution and Bank Channeling financial services at PT. Pos Indonesia (Persero) main branch Surabaya 60000. The type of research is descriptive qualitative. Data collection techniques through observation, interviews and documentation. Data analysis techniques include data collection, data reduction, data presentation and drawing conclusions or verification. The theory used is the service quality theory of Zeithaml, Parasuraman and Berry (1990) (Hendrayady et al., 2020) which consists of: Tangible, Reliability, Responsiveness, Assurance, and Empathy). The research results show that the quality of financial services, Fund distribution and Bank channeling at PT. Pos Indonesia (Persero) Main Branch Surabaya 60000 can be said to be good because it provides a sense of comfort and satisfaction to service users. However, there are still several shortcomings related to the fact that there are still employees who do not use identification cards and queue numbers that are rarely used at bank channeling service counters.

This research is motivated by the important role and features of Micro, Small and Medium Enterprises (MSMEs) in surviving the economic crisis and the high contribution to Gross Domestic Product (GDP) as well as when compared to large businesses. Even though it has a big role, MSMEs still have some problems, one of which is limitations on financial literacy. Limited literacy is a challenge in itself, considering that financial literacy can increase the ability to manage finances and access available financial products. In addition, this study also includes the used of digital finance variables because the 4.0 revolution has entered into everything that is digital-based. In addition, using these variables is also due to the emergence of optimism about the adopted telephone and internet. The used of digital finance in this study focuses more on payments produced by financial institutions and financial technology companies.The effects of these two variables on financial inclusion will then be examined considering their role in reducing the limited access to available financial services and thus encouraging economic growth. The city of Bandung is used as a research area. Bandung City was choosen because the large number of MSMEs and Bandung City MSMEs have their own characteristics. Based on the Dinas Koperasi dan UMKM Kota Bandung (2018), there are 5.242 micro businesses in Bandung City, 23 medium scale businesses, and 394 small-scale businesses so that the total number is 5.841 MSMEs. The research method used is explanative to explain the relationship between variables through purposive sampling so that 56 respondents were obtained. The purposive sampling technique using the following considerations: categorized micro, small and medium enterprises, business activities in Bandung city, and willing to provide the necessary information. In variable measurement, financial literacy is measured by knowledge related to finance and financial services, actions in making financial decisions, the ability to manage finances, tell financial concepts, and attitude in responding to financial related matters based on Bongomin, Munene, Ntayi, and Malinga (2017), Bongomin et al. (2016), Nkundabanyanga, Kasozi, Nalukenge, and Tauringana (2014), Kartawinata and Mubaraq (2018), and Sina (2017). Measurement the used of digital financial variable adapted based on Azam (2015), Zhou, Lu, and Wang (2010), and Qian, (2019) which consisted of perceptions of ease, benefits received, perceptions of used transfer activities, payments, and account management. Likewise financial inclusion, the measurement of which was adapted from Bongomin et al. (2017) and Bongomin et al. (2016) which consists of the ability to access financial services, using financial services, the quality of financial services, and the benefits obtained when using financial services.The data in this study are primary data with a questionnaire for further analysis using Partial Least Square (PLS). The Likert scale used in this study consists of 4 scales. The answer options strongly disagree are given value 1, disagree is given value 2, agree is given value 3, and strongly agree is given value 4 (Hermawan & Yusran, 2017; Martono, 2016). These four scales to reduce a neutral choice answers that do not show partiality towards positive or negative which results in a tendency not argue. PLS is used as a causality testing analysis tool due to the similarity of objectives with the research conducted and its used which can manage small amounts of samples. The minimum sample size in PLS is 10 samples on each line jalur (Abdillah & Hartono, 2015). In testing the hypothesis, a confidence level of 90 percent is used. Validity testing uses loading scores, AVE values, comparing indicator’s loading and cross loading, and comparison AVE roots with correlation. In this study also use reliability testing with composite reliability and KR-21 considering that the measurements carried out in the study were one measurement.The results show both variables have a positive influence and a very strong level of significance on financial inclusion. This result also supported by very strong evidence that can be seen through the p-value for each relationship. The results of the research prove that barriers to accessing these services can be minimized through increasing financial literacy so that can increase financial inclusion and be more developed. Therefore, a common problem experienced by MSME actors, namely low financial literacy, is a serious problem that can be overcome with training or coaching as consideration for solutions considering that financial literacy can open financial access to be more developed. Touching MSMEs with the used of digital finance will automatically open their ability to access available payment financial services and increasing financial inclusion.

PurposeWith reference to the global financial crisis and lessons learned, advocacy for distributing suitable financial products by financial intermediaries remain key if consumers, especially the illiterate in underdeveloped financial markets, are to be absorbed into the formal financial system. Financial intermediaries such as microfinance banks should provide suitable financial products, with full disclosure of information and customer protection relating to distribution of all financial products within the financial market to prevent financial vulnerability. The main purpose of this study is to establish the mediating role of financial product suitability in the relationship between access to microfinance products and survival of women micro-agribusinesses in rural Uganda.Design/methodology/approachSmartPLS with bootstrap based on 5,000 samples was used to test for the mediating role of financial product suitability in the relationship between access to microfinance products and survival of women micro-agribusinesses in rural Uganda.FindingsThe results revealed that financial product suitability improves access to microfinance products by 29 percentage points to promote survival of women micro-agribusinesses in rural Uganda. In reality, delivering suitable financial products that suit the economic condition of poor women micro-agribusiness borrowers, can allow them to use these products to generate income to meet timely repayment obligations and business demands.Research limitations/implicationsThe current study selected samples from only women micro-agribusinesses operating in rural Uganda, with a specific focus on the northern region. Thus, studies involving samples selected from other rural developing countries may be necessary in future. Additionally, while the findings are significant, the data were collected from only women microenterprises who are clients of microfinance banks. Future studies focusing on women microenterprises who are clients of other financial institutions may offer insightful comparative data.Practical implicationsThe findings from this study offer strategies for managers of microfinance banks to invent and design financial products that suit the economic status and condition of different microcredit clients, especially the women micro-agribusinesses. This can help them to solve the problem of defaults in loan repayment and delinquency common while lending to the rural poor. In fact, microfinance banks should adopt a customized loan pricing model that can promote the operational sustainability and commercial viability of women micro-agribusinesses in the current situation of mission adrift.Originality/valueThe current study uses the suitability rule and economic theory to elucidate the importance of microfinance product suitability to increase microfinance inclusion of women micro-agribusinesses in rural areas in developing countries. The novelty in this paper is in combining the suitability rule and economic theory with microfinance theory to promote access to microcredit by the women micro-agribusinesses in rural Uganda under the situation of mission adrift. This is limited in the existing microfinance literature and theory, especially in developing countries like Uganda.

PurposeThe purpose of this paper is to establish the relationship between institutional framework of regulative (formal rules), normative (informal norms) and cultural-cognitive (cognition), and their effects on financial intermediation by microfinance deposit taking institutions (MDIs) in developing economies like Uganda.Design/methodology/approachData collected from a total sample of 400 poor households and 40 relationship officers located in rural Uganda were processed using statistical package for social sciences and analysis of moment structures to establish the relationship between institutional framework of regulative, normative and cultural-cognitive, and their effects on financial intermediation by MDIs in developing economies.FindingsThe results showed that the three dimensions of regulative (formal rules), normative (informal norms) and cultural-cognitive (cognition) significantly affect financial intermediation by MDIs in developing economies like Uganda. In addition, as a unique finding, two new dimensions of procedural and declarative cognition emerged from cultural-cognitive framework to determine financial intermediation among MDIs in developing economies, specifically in Uganda.Research limitations/implicationsThe study collected data from only poor households and relationship officers located in rural Uganda. It ignored peri-urban and urban areas in Uganda. In addition, the study focused only on MDIs and ignored other financial institutions. Besides, the study was purely quantitative, therefore, further research through interviews may be useful in future. Furthermore, the study was carried out in rural Uganda as a developing economy. Thus, future research using the same variables in other developing economies may be useful.Practical implicationsManagers of financial institutions and policy makers should know that market functions of financial intermediaries in developing economies are promoted by institutional framework of regulative, normative and procedural and declarative cognition that lowers transaction cost and promotes information sharing. Therefore, more efforts should be directed towards strengthening the existing institutional framework of regulative, normative and cognition to promote financial intermediation by financial institutions such as MDIs.Originality/valueThis paper is the first to test the relationship between institutional framework and their effects on financial intermediation by MDIs in developing economies. The results revealed existence of two new factor structures of procedural and declarative cognition in explaining financial intermediation by MDIs in developing economies like Uganda. This is sparse in financial intermediation literature and theory.

Abstrak: Pengaruh Kemampuan Manajerial Pengurus dan Kualitas layanan Keuangan Terhadap Partisipasi Anggota Koperasi. Penelitian ini bertujuan untuk mengetahui: 1) Pengaruh Kemampuan Manajerial Pengurus terhadap Partisipasi Anggota Koperasi; 2) Pengaruh Kualitas Layanan Keuangan terhadap Partisipasi Anggota Koperasi; 3) Pengaruh Kemampuan Manajerial dan Kualitas Layanan Keuangan terhadap Partisipasi Anggota Koperasi. Metode penelitian yang digunakan adalah metode asosiasitif kasualitas serta menggunakan pendekatan kuantitatif. Penelitian dilaksanakan di Koperasi KPRI Sekar Indah Paliyan dengan populasi sebanyak 152 orang dan sampel sebesar 60 orang. Teknik pengumpulan data dilakukan dengan teknik kuesioner dan dokumentasi. Metode analisis data yang digunakan adalah regresi sederhana dan regresi ganda. Hasil penelitian menunjukan bahwa: 1)Terdapat pengaruh positif dan signifikan Kemampuan manajerial pengurus terhadap Partisipasi Anggota Koperasi, 2) Terdapat pengaruh positif dan signifikan Kualitas Layanan Keuangan terhadap Partisipasi Anggota Koperasi. 3) Terdapat pengaruh positif dan signifikan Kemampuan Manajerial pengurus dan Kualitas Layanan Keuangan terhadap Partisipasi Anggota Koperasi. Koefisien determinasi (R2) sebesar 0,478 diartikan bahwa 47,8% Partisipasi anggota koperasi dipengaruhi oleh persepsi anggota pada Kemampuan Manajerial pengurus dan Kualitas Layanan Keuangan. Kata kunci: kemampuan manajerial; kualitas layanan keuangan; partisipasi anggota koperasi. Abstract : The Effect of Managerial Ability and Quality of Financial Services on Cooperative Member Participation. This study aims to determine 1) the effect of management's managerial ability on the participation of cooperative members; 2) The Effect of Financial Service Quality on Cooperative Member Participation; 3) Effect of Managerial Ability and Quality of Financial Services on Cooperative Member Participation. The research method used in this study is the casual association method and uses a quantitative approach. The research was carried out at the KPRI Sekar Indah Paliyan Cooperative with a total population of 152 people with a total sample of 60 people. The data collection technique is done by using a questionnaire or questionnaire and documentation. The data analysis method used is multiple regression. The results of this study indicate that: 1) There is a positive and significant influence on the managerial ability of the management on the Participation of Cooperative Members, 2) There is a positive and significant influence on the Quality of Financial Services on the Participation of Cooperative Members. 3) There is a positive and significant influence of Managerial Ability and Quality of Financial Services on Cooperative Member Participation. The coefficient of determination (R2) of 0.478 can be interpreted that 47.8% Cooperative member participation is influenced by members' perceptions of the management's managerial ability and financial service quality. Keywords: managerial ability; service quality; cooperative member participation

The article is devoted to the study of key components of financial sector in Russia and key concepts related to them. The authors believe these key components are focused on achieving the strategic goals set by the Russian government in the national project “Digital economy” which include; increasing the availability and quality of financial services and services for citizens and businesses; creating a competitive environment; further development of competition in the financial market; increasing the availability, quality and range of financial services; reducing risks and costs in the financial sector; increasing the competitiveness of Russian technologies while ensuring cybersecurity and maintaining financial stability. The authors analyse the economic situation that is developing in the country under the influence of the spread of digital technologies pointing out that Russia is one of the world leaders of digitalization in the sphere of finance. Using diachronic approach, the authors traced the history of digitalization in the world in general and Russia in particular, which allowed them to determine major trends and priorities. Further analysis of the language means representing the key concepts conducted with the help of linguocognitive modelling revealed the nature of the process of digital transformation of financial sector.

PurposePremised on the argument that procedural and declarative cognitions help individuals to memorize, store and recall information to make informed decisions and choices in daily life, the purpose of this paper is to analyze the auxiliary psychosomatic roles of procedural and declarative cognitions in promoting financial literacy among clients of microfinance banks in developing countries.Design/methodology/approachThe study adopted a cross-sectional research design and a semi-structured questionnaire was used to collect responses from 400 poor households’ heads located in rural Uganda. Analysis of moment structures and structural equation modeling were used to test for the auxiliary psychosomatic roles of procedural and declarative cognitions in promoting financial literacy among the poor who are clients of promotion of rural initiatives development enterprises (PRIDE) microfinance bank in rural Uganda.FindingsThe results revealed that both procedural and declarative cognitions significantly and positively boost financial literacy among the poor who are clients of PRIDE microfinance bank in rural Uganda. Jointly, both types of cognitions explain 30 per cent of the variation in financial literacy among the poor who are clients of PRIDE microfinance bank. Accordingly, the results correspond to arguments by psychologists that the human mental models help individuals to process, encode, store and retrieve information at an appropriate time such as in articulating complex financial information.Research limitations/implicationsThe study focused majorly on cross-sectional research design. Thus, future studies may use longitudinal research design to explore the ability of the poor to memorize and retrieve financial information over time. Additionally, the study used only quantitative data collected using a semi-structured questionnaire. Further studies may use qualitative data collected by means of interviews. Besides, this study solely used poor households living in rural Uganda as the main source of data. Hence, future studies involving data from other section of the population may be necessary.Practical implicationsThe results from this study underpins the auxiliary psychosomatic roles of procedural and declarative cognitions in promoting financial literacy among clients of microfinance banks in developing countries. Indeed, the human mental models that revolve around cognition as individuals grow are critical in helping them make informed financial decisions when they are faced with difficult financial situations. Therefore, microfinance banks and financial literacy programs in developing countries should consider the roles of procedural and declarative cognitions while designing financial literacy modules. This is because they determine how individuals receive, encode, store and retrieve financial information in order to make informed and better financial decisions before consuming financial products offered by the microfinance banks.Originality/valueAt present, there is scanty extant literature and theory that explains the auxiliary psychosomatic roles of procedural and declarative cognitions in promoting financial literacy, especially in developing countries. The current study sheds more light on the deterministic roles of procedural and declarative cognitions in boosting financial literacy.