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EFFECTS OF MOBILE MONEY ON MOBILE MONEY OPERATORS IN MAKINDYE
DIVISION KAMPALA, UGANDA; A CASE STUDY OF
AIRTEL, KABALAGALA BRANCH
BY
KANSIIME HARRIET
1163-05014-06333
A RESEARCH REPORT SUBMITTED TO COLLEGE OF ECONOMICS
AND MANAGEMENT IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF A BACHELOR’S
DEGREE IN BUSINESS ADMINISTRATION
OF KAMPALA INTERNATIONAL
UNIVERSITY
JULY, 2019
DECLARATIONI, Kansiime Harriet heart fully declare that this report is in its original status through the field
work and data analysis I undertook. It has never been produced and presented anywhere for the
academic awards in this university or elsewhere including other higher institutions of learning.
SIGNATURE ~. DATE . .~ I0~ /~KANS TIME HARRIET
1163-05014-06333
APPROVAL
I, certify that the research report has been submitted by Kansiime Harriet with my approval and
it’s ready for submission in the college of economic and management.
SIGNATU~ ~ DATES ~4i/.~DR.KIRABO KYEYUI’JE B. JOSEPH
(SUPERVISOR)
DEDICATION
I dedicate this piece of work to my parents Mrs. Kabaloodi Oliver sisters Christine, Irene, Dorren
and my brothers Christopher and Godwine who have fought their deliberations to have courage
and fortitude and kept struggling in spite of odds in seeing my dreams of education fully
realized.
III
ACKNOWLEDGEMENT
First and foremost, I pass a word of thanks to the almighty God for being there for me always in
my academic career for this success I count on today.
I extend a vote of thanks to a number of people who unreservedly, contributed towards the
accomplishment of this research work.
I also would like to acknowledge the assistance and role played by the following personalities to
the successful completion of this study.
I cannot say exactly how grateful I am to my supervisor, Dr.Kirabo Kyeyune B. Joseph; his
guidance in this study was beyond measure. Thank you also for providing me with professional
advice, encouragement and your time that has spurred me to success.
In the same way, I would like to thank the management and staff of Makindye Division Airtel,
Kabalagala Branch and the proprietors of the selected businesses for the time they gave me most
especially in evenings after the long day’s work. They honestly filled the questionnaires, surely,
without their input; this study would not have come to fruition.
I cannot forget the efforts of the staff of Kampala International University main campus
especially the lecturers and the management department and my friends at large, the BBA for
their input and effort that made me acquire the invaluable knowledge.
Your contribution can never be quantified but will always be reminiscent whenever I look
through this book.
Lastly, I thank my parents for sacrificing the little they had, in thick and thin and invested in my
education. This sacrifice that you made failed in other peoples’ homes.
Thank you for looking after me and enabling me to acquire a lifelong investment.
iv
LIST OF TABLES
Table: 3.1 Showing sample size 22
Table: 4.1 Response rate 27
Table : 4.2 Findings on the gender of respondents 28
Table : 4.3 Findings on the age of respondents 29
Table : 4.4 Findings on the level of education 30
Table : 4.5 Shows the distribution by Marital Status 31
Table : 4.6 shows the effect of mobile money tax to the Airtel Company 32
Table : 4.8 showing the effect of mobile money tax to the mobile money customers 34
Table: 4.9 Shows the effect of mobile money tax to mobile money Agents 36
V
LIST OF FIGURES
Figure: 2.1 Conceptual Frame work 10
Figure :4.1 showing the response rate 28
Figure : 4.3 Age of the respondents 29
Figure :4.4 showing the level of education 30
Figure :4.5 Shows the distribution by Marital Status 31
vi
LIST OF ACRONYMS
IT Information Technology
KACITA: Kampala City Traders Association
LED Local Excise Duty
MMOs Mobile money operators
MMT Mobile Money Transfers
IvfNOs Mobile Money Operators
PEOU Perceived Ease of Use
PU Usefulness
TAM Theory of Technology Acceptance Model
LICC, Uganda Communications Commission
URA Uganda Revenue Authority
VAT Value Added Tax
VII
TABLE OF CONTENTS
DECLARATION
APPROVAL
DEDICATION
ACKNOWLEDGEMENT iv
LIST OF ACRONYMS vii
TABLE OF CONTENTS
ABSTRACT
CHAPTER ONE 1
[NTRODUCTION 1
1.0 Introduction 1
1.1 Background to the study 1
1.1.1 Historical background Perspective 1
1.1.2 Theoretical perspective 2
1.1.3 Conceptual Perspective 3
1.1.4 Contextual Perspective 4
1.2 Problem statement
1.3 Purpose of the study 6
1.4 Specific objectives 6
1.5 Research Questions 6
1.6 Research Hypotheses 6
1.7 Scope of the Study 6
1.7.1 Geographical scope 7
1.7.2 Content scope! theoretical scope 7
1.7.3 Time scope 7
VII
1.8 Significance of the Study .~
1.9 Operational definition of key terms 8
CHAPTER TWO 9
LITERATURE REVIEW 9
2.0 Introduction 9
2.1 Theoretical Review 9
2.1.1 Technology Acceptance Model 9
2.2 Conceptual Framework 10
2.2.1 Review of related literature 11
2.2.1.1 Financial Inclusion 11
2.2.2 Empirical review of literature 11
2.2.3 Research gaps 13
2.3 Mobile Money Taxation 13
2.3.1 Negative effects of Mobile Money Services Usage 16
2,4 Effect of mobile money tax to the mobile money customers 17
2.5 Effect of mobile money tax to the mobile money agents 18
~HAPTER THREE 21
VIETIIODOLOGY 21
3.0 Introduction 21
3.1 Research Design 21
3.2 Population of the Study 21
3.3 Sample Size 21
3.4 Sampling Techniques 23
3.5 Sources of data 23
3.5.1 Secondary data Collection 23
ix
3.5.2 Primary Data collection 23
3.6 Data Collection Methods 23
3.6.lQuestionnaire Method 24
3.6.2 Response rate 24
3.7 Measurement of Variables 24
3.7.1 Validity of Instruments 24
3.7.2 Reliability of Instruments 25
3.7.3 Data Validity 25
3.8 Data Analysis 25
3.9 Ethical considerations 25
3.10 Limitation of the study 26
CHAPTER FOUR 27
DATA PRESENTATION, ANALYSIS AND INTERPRETATION 27
4.Olntroduction 27
4.1 Response rate 27
4.1.1 Background Information 28
4.1.2 Age of the respondents 29
4.1.3 Response on the level of education of the respondents 30
4.1.4: Distribution by Marital Status 31
4.2 To determine the effect of mobile money tax to the Airtel Company 32
4.3 To examine the effect of mobile money tax to the mobile money customers in Kabalagala.
4.4 To establish the effect of mobile money tax to mobile money Agents in Kabalagala 36
4.5: Data analysis and findings 38
x
CHAPTER FIVE .39
SUMMARY, CONCLUSION AND RECOMMENDATIONS 39
5.0 Introduction 39
5.1 Summary of findings and interpretation 39
5.1.1 Objective one 39
5.1.2 Objective two 39
5.1.3 Objective three 40
5.2 Conclusion 40
5.3 Recommendations 41
5.4 Limitation of the study 42
5.5 Areas for further research 43
REFERENCES 44
APPENDICES 49
APPENDIX I 49
QUESTIONNAIRE 49
APPENDIX II: BUDGET 53
APPENDIX III: WORK PLAN AND TIMEFRAME 54
xi
ABSTRACT
The purpose of the study was to assess the effect ofmobile money tax to mobile money users inUganda in accordance to Airtel Uganda Kabbalagala perspective.The study was based on three specific objectives; to determine the effect of mobile money tax to‘he Airtel Company, to examine the effect ofmobile money tax to the mobile money customers in~(abalagala and to establish the effect of mobile money tax to mobile money Agents in~abalagala It was based on a cross sectional descrz~tive survey design basing on the use ofiualitative and quantitative approaches those mobile money operators in Makindye division,4irtel Uganda Kabbalagala. Simple random sampling and purposive sampling techniques wereised in the study. Questionnaires were used to collect primary and secondary sources of data‘I~om 50 out of 60 respondents, using simple random sampling. Data analysis was done using~‘FSS~frequencies, Finally the report looked at the study results and gave the discussion ofeach?nding. Therefore, here, data analysis, procedures and response rate are focused on.
~hen the findings according to objective one revealed that high taxes paid by mobile moneyperators reduce their profits which had a negative effect on the Mobile money company in~.‘Iakindye division Kabalagala branch with 68% of respondents who strongly agreed and 20%igreed. According objective two, the positive effect ofMobile money reduces financial pains andlifficulties in making payment indicate that customers are convinced with Cash flow~ianagement thus the credit management and have greatly increased overtime by response of~8% and there are suggestions with mobile money, the poor have a simple and safe way to save“money for future healthcare costs and has greatly increased overtime by 59%.According to~bjective three, on average of the effect ofmobile money to agents is that they face the problemffraud by the customers in Airtel money Kabalagala branch in Makindye Division Kampala)istrict a negative effect that mobile money agents have no security in their operation of theirervices to customers and the findings over 73% levels of agreement on the areas provided /tudied or selected and those who agreed with 15%. Having gone through this topic, it waseasonable to conclude that mobile money is increasingly becoming a critical part of theation ‘s economy. It also serves as a source ofgovernment revenue and as such any tax imposedhould not inhibit or limit the development of the industry. As it is applied today, the tax remainsmbiguous leading to points of revenue leakage however it does not appear to sign~Icantiy7istort the industry.
~ecommnendation, Based on the findings made from this research study, the followingecommendations are therefore made: From the findings it is recommended that consultationsetween the revenue authority and stakeholders should be fostered and encouragec~~onsultations with regulatory authorities, telecom companies and subscribers should be made
norm prior and subsequent to the introduction ofany tax in the telecommunications industry.therefore welcome you to have a humble time in reading this work. There are new and
nowledge buildingfindings in the work, a lot of inspirations.
XI
CHAPTER ONE
INTRODUCTION
1.0 Introduction
In this study, the researcher intends to explore how mobile money services affect MMOs in
Makindye division Kampala of Airtel, Kabalagala branch. This chapter of the proposal is
composed the background to the study, statement of the problem, purpose of the study,
objectives of the study, research questions, scope of the study, significance of the study,
conceptual framework, , operational.
1.1 Background to the study
1.1.1 Historical background Perspective
Over the last decade, mobile phones increased around the developing world. New services are
~rnerging as Mobile Network Operators (IVINOs) diversify services to compliment voice and
SMS in a progressively competitive environment, where the goal is improving customer
retention and reducing churn (Ali Ndiwalana, Olga Morawczynski, & Popov, 2007).This is the
reason why Mobile money operators MMOs in the developing world are increasingly deploying
the use of mobile payments to enhance the quality of their services and increase growth (Mbogo,
2010)
Mobile money is novel: it was barely heard of a decade ago. The first service for the unbanked
became active in 2001, but it is probably the phenomenal growth since 2007 of Kenya’s M-Pesa
system that has brought mobile money to international prominence (Aron, 2016) Mobile money
transfer services emerged in Kenya with Safaricom’s M-pesa service and M-kesho in 2010. The
usage of the service is common in the country among subscribers and also among the unbanked
populations in the rural areas. On the other hand in Uganda the small business sector, like in
others parts of the world, is seen as a vital contributor in the evolution to a market economy,
through job creation and income generation among other factors (Hisrich & Ozturk, 1999)With
80 % of MMOs located in urban areas such as Makindye division Kampala, Aitrel , Kabalagala
branch (Hatega, 2007)they contribute approximately 75 percent of the gross domestic product
(GDP) and employ approximately 2.5 million people (Osunsan, 2012). This signifies their
undisputed role in the economic development of Uganda.
1
On Friday the 1st of June, 2018, the Parliament of Uganda passed a 32.4 trillion shilling
2018/2019 budget (The new vision 31st May 2018),
[t included a new 200 shilling a (-~-0.05 USD) tax “per user per day of access” on “over the top
services”2(OTT5) previously known by the general public as social media. The same budget
introduced an additional tax on mobile money transactions “of receiving, payments and
withdrawals” valued at 1% of the value of these transactions
These taxes came into effect at 1 2am on the ~ of July, 2018. Many Ugandans found themselves
instantly blocked from accessing what’s App, Facebook, Twitter, Linkedln and other OTT
services, and others were shocked to realize that increasingly popular mobile money payments
had increased in price (The new vision dated 31st May 2018).
These developments were followed by countless public statements in opposition and in favor of
the new taxes, including one opposing the taxes by the ICT Association of Uganda (ICTAU)
released on July 4th, and two missives released by President Museveni on July 4th and 12th A
group of activists filed a petition in the Constitutional Court seeking nullification of the OTT tax
and a reduction in the mobile money tax the following Monday 5. A campaign using the hash tag
This Tax Must Go held a demonstration against the taxes on July 11th. This series of events
dominated the headlines and talk shows in Uganda and attracted the attention of international
media, as well as industry stakeholders and policy makers around the world. On July 11th,
Ugandan Prime Minister Ruhakana Rugunda announced that the Government of Uganda would
review these taxes. Later as the year advanced, the mobile money tax was reduced to 0.5% and it
was to be charged only on withdrawals. However, the over the top tax remained intact to date
Whitehead Communications released a survey to gather public opinion on the impact of the
taxes in order to contribute a resource for evidence-based research in their review. The survey
was closed at 5pm on July 16th, collecting 2,918 responses (afier data clean) and generating the
following data for free use by the public at large. You are welcome to build on these findings,
which we have released quickly (The new vision dated 3l~~ May 2018).
1.1.2 Theoretical perspective
Theory of Technology Acceptance Model (TAM).
Theoretically, mobile payment procedures are essentially Information Technology (IT)
procedures and channels through which users make various payment transactions. Studies show
2
that the acceptance to use the mobile payments varies with the context in which users are able to
use a mobile payment procedure. Moreover, the mobile payment procedures are functional
services adopted for utilitarian reasons (Pousttchi, Giaglis, Weerthner, Tschammer, & Foeschi.K,
2003)This study focuses on mobile money services on MBEs market performance in Makindye
division Kampala-Uganda Kabalagala Branch. The Theory of Technology Acceptance Model
(TAM).is applicable to the study, given the fact that, it has received praises from earlier
researchers on its contribution towards our understanding into consumer behavior. (Steve Baron,
Anthony Patterson, & Harris, 2008) State that: “Throughout the years, TAM has received
extensive empirical support through validations, applications and replications for its power to
predict use of information systems” Also, (Legris., John Ingham, & Collereette., 2003) conclude
that “TAM has proven to be a useful theoretical model in helping to understand and explain user
behavior in information system implementation.
1.1.3 Conceptual Perspective
Mobile Money operators
Mobile Money operators is an enterprise employing maximum 4 people; annual sales/revenue
turnover of maximum Ugandan Shillings 12 million and total assets of maximum Ugandan
Shillings 12 million.
Mobile Money
Mobile Money is a platform which allows people to use their mobile phones like wallets to
transfer money, pay for goods and services and conducts banking services, has started to have a
transformative effect at a faster pace as previously envisaged (Nyenje, 2010). This platform
offers the new services to move money from place to place and present an alternative to the
payment systems offered by banks, remittance firms, pawn shops, and others
Mobile Transaction
This refers to transactions carried out through mobile technologies and devices. In addition to
mobile payments, it includes every kind of mobile transaction offered by technology, whether it
involves financial values or not.
3
LVIobiIe payments include payments made or enabled through digital mobility Mobile
technologies, via handheld devices, with or without the use of mobile telecommunications
payments networks. These payments are digital 1 financial 1 transactions, although not
necessarily linked to financial institutions or banks. There are several models of mobile
payments that are currently employed worldwide.
Performance
Performance is an encompassing concept and can be defined in terms of job generation, growth,
profitability, sustainability, survival and stability (Reynolds, 1994).Limited literature related to
small business has tended to focus on the linking of planning to performance. Planning involves
decision making. For the purpose of this study, business performance is defined as the growth,
stagnation or decline of a business entity.
Growth will be defined as successful performance, and decline as unsuccessful performance or
failure. Stagnation can be defined as successful performance due to the fact that some business
owners have no motive and/or intention to grow (Tambwe, 2015).
Small Enterprise is defined as an enterprise employing maximum 50 people; annual sales/
revenue turnover of maximum Ugandan Shillings 360 million and total assets of maximum
Ugandan Shillings 360 million.
Retail Businesses are businesses that sell commodities in small quantities to consumers operated
individually or by families.
1.1.4 Contextual Perspective
Contextually since mobile money was established in Uganda, the number of subscribers has been
steadily increasing. By the end of 2012, Uganda had over 9 million mobile money users all over
the country. Currently, according to that figures has grown to about 19.5 million, due to the fact
that mobile money services have deepened financial inclusion in Uganda where bank accounts
are six million (Kiyingi, 2016).
Kansanga is bordered by Kabalagala and Kisugu to the north, Muyenga to the north-east, Kiwafu
to the east, Bbunga to the south-east, Konge to the south, Lukuli to the south-west, Kibuye to the
4
west, and Nsambya to the north-west. The road distance between Kampala’s central business
iistrict and Kansanga is approximately 6 kilometers (3.7 mile).
~Namatovu, 2010), Observed that majority of the enterprises in Uganda are found in restaurants
~nd food processing, garages for motorcars and motorcycles, retail and whole sale trade, metal
[abrication, furniture assembling, schools and transport services. On top of the surging subscriber
aumbers, mobile money transactions have grown from Shs 962.7 billion to Shs 24 trillion by the
~nd of 2015. The bulk of these stransactions are through the market leader, MTN Uganda
(Herman Kasekende, 2015).
N4any studies have been undertaken on mobile money services focusing on consumer adoption,
Lechnology design improvements and business-driven models. However, to the best of my
knowledge, the effects of this innovation in the context of MMOs market performance are not
yet well understood and require exploration to further reflect better the subsistence level and
informal economy setting like that of Uganda. This study intends to respond to the call for rich,
qualitative and quantitative research that might extend the conceptual understanding of the
effects of mobile money on mobile money operators in Makindye Division particularly Airtel,
Kabalagala branch.
1.2 Problem statement
The introduction of mobile money tax has seen the country experience much more problems
including resentment from different stakeholders both in and outside the country (Uganda).
This has as well been accelerated by Telecommunication companies like MTN and Airtel
meeting the parliamentary committee on finance to have the tax withdrawn or scrapped due to its
massive negative effects on the economy.
According to Vanhelleputte, (2018), the mobile money transactions have reduced by 33%
following the introduction of mobile money tax, In the same way, according to the analysis of
mobile money reports, it’s seen or evident that the mobile money supports over 5,000 savings
and credit cooperative societies meaning that taxing the mobile money business is a big risk.
This tax is seen as a discriminative and unfair hence it violates many canons of taxation for
example the canon of equity is abused. In my own view also, this tax is not easy to understand
especially to my illiterate people because it is a percentage tax. Imagine a student receiving
money for school fees through mobile money and it’s being subjected to the tax; the issue is that
5
the student will remain with less money which might also not be enough to cater for his total
amount of fees due because the tax reduces the amount that was initially sent.
1.3 Purpose of the study
The main objective of the study was to assess the effect of mobile money tax to mobile money
asers in Uganda in accordance to Airtel Uganda Kabbalagala perspective.
1.4 Specific objectives
L). To determine the effect of mobile money tax to the Airtel company.
[i). To examine the effect of mobile money tax to the mobile money customers in Kabalagala.
ii). To establish the effect of mobile money tax to mobile money Agents in Kabalagala.
[.5 Research Questions
Phe research questions focused on the effect of mobile money tax to mobile money users in
iganda a perspective of Kabalagala.
i. The research questions are as follows.
ii. What is the effect of mobile money tax to the Airtel company at Kabalagala Branch?
iii. What is the effect of mobile money tax to mobile money agents at Kabalagala?
iv. What is the effect of mobile money tax to the clients! public individuals at Kabalagala?
[.6 Research Hypotheses
i. There is an effect of mobile money tax to Airtel Company at Kabalagala branch.
ii. There is an effect of mobile money tax to the mobile money agents at Kabalagala.
iii. There is an effect of mobile money tax to the clients! public individuals at Kabalagala.
[.7 Scope of the Study
since a research paper of this kind cannot cover all aspects related to the effects of mobile
noney tax to mobile money users at all time and space, its scope ought to be pointed out. The
;tudy will confine itself to the effects of mobile money tax to mobile money users in Kabalagala.
~abalaga1a has been chosen as a case study not only because of its closeness to the researcher
ut also Airtel Kabalagala Branch presents a perfect choice in studying the impact of mobile
noney tax to mobile money users due to a mass population served.
6
1.7.1 Geographical scope
Kansanga is bordered by Kabalagala and Kisugu to the north, Muyenga to the north-east,
Kiwafu to the east, Bbunga to the south-east, Konge to the south, Lukuli to the south-west,
Kibuye to the west, and Nsambya to the north-west. The road distance between Kampala’s
central business district and Kansanga is approximately 6 kilometers (3.7 mi).
1.7.2 Content scope! theoretical scope
Several theories of taxation exist in public economics. Governments at all levels (national,
regional and local) need to raise revenue from a variety of sources to finance public-sector
expenditures
1.7.3 Time scope
The researcher considered a period of three years that was 2016 to 2019 in the organization in
order to achieve the purpose of the study. This was because the researcher believed that the
period stated was sufficient enough to carry out the research in the organization
1.8 Significance of the Study
To mobile money Agents and Telecommunication companies, the findings of this study will be
useful as it will help to determine the impact of mobile money tax on mobile money users and
To the researcher: the researcher obtained deep knowledge on the impact of mobile money tax to
mobile money users at Kabbalagala and Uganda as at large.
Also the findings of the study will be useful in building up ground work for further desk research
on the same area or other related fields.
To the policy makers; the study may help in making better policies as regards mobile money tax
operations.
Ugandan Context: The findings of this study will be important to Ugandan Ministry of Trade,
Industry, and cooperatives in making policies regarding Mobile money services , Kampala City
Traders Association (KACITA) in supporting the respective Mobile money operators in
Makindye Division particularly Airtel, Kabalagala branch in terms to advocating for their rights,
Uganda Investment Authority to interest both local and foreign investors in the MMOs Industry
since it is the back bone of the growing Economy like Uganda.
7
lus other managers and regulators elsewhere in the region particular the dilemma of
nderstanding the effect of Mobile money service use, mediated by cash management system
eared to achieving the required market performance standards of MMOs.
cholars: The findings of this study would benefit to economists as it is a contribution to the
ody of knowledge in this broad and yet not fully exploited area of Entrepreneurship as well as
4arketing strategy. This would help to enhance understanding and development of relevant
Eieories as well as extensive areas of interest.
.9 Operational definition of key terms
Vlobile money
\~ccording to the researcher, mobile money can simply be defined as cash stored using SIM cards
is a form of identification as it is done in the operation of an account with a given account
iumber in a normal banking system.
n more simple terms mobile money is basically financial transactions undertaken largely
hrough the use of mobile phone.
~‘IobiIe payments: it may refer to bill payments, acquisition payments, or a transfer of financial
~esources or money between economic agents, and still come into the banking domain.
~v1obile money operators
Viobile money operators is defined as an enterprise employing maximum 50 people; annual
3ales/ revenue turnover of maximum Ugandan Shillings 360 million and total assets of maximum
Ugandan Shillings 360 million.
8
CHAPTER TWO
LITERATURE REVIEW
.0 Introduction
~his chapter looks at the Effects of mobile money on mobile money operators in Makindye
)ivision Kampala, Uganda; A case study of Airtel, Kabalagala Branch. It consists of existing
~terature on mobile money users by different scholars/research studies from magazines, text
ooks, journals and newspapers.
~.1 Theoretical Review
~.1.l Technology Acceptance Model
)ver the years TAM has been tested and applied in the prediction of future consumer behavior
he premises that the contracts, perceived usefulness and perceived ease of use are fundamental
leterminants of system adoption and use (Davis, 1989). These two beliefs create a favorable
lisposition or intention toward using the IT that consequently affects its use. Perceived
Jsefulness (PU) is said to be the degree to which person thinks that using a particular system
Nih enhance his or her performance. Whereas Perceived Ease of Use (PEOU) is “the degree to
~vhich a person believes that using a particular system will be free of effort” (Davis, 1989).
fAM has received praises from earlier researchers on its contribution towards our understanding
[nto consumer behavior. Lu et al (2003), states that: “Throughout the years, TAM has received
extensive empirical support through validations, applications and replications for its power to
predict use of information systems”.
Also, (Sun, 2006) conclude that “TAM has proven to be a useful theoretical model in helping to
understand and explain user behavior in information system implementation “TAM is related to
the study; Mobile money services and Mobile money operators MMOs, in such a way that;
people living in the developing countries perceived usefulness and ease of use of mobile money
services to a certain extent determine Mobile money operators.
9
.2 Conceptual Framework
‘igure: 2.1 Conceptual Frame work
;ource: Adopted and modified by (Paul Walela Wanyonyi & Bwisa, 2011)
• Business growth• Sales volumeo Market expansiono Customer
satisfactiono Repeated
purchases
‘he study seeks to determine the effect of Mobile Money services on the performance of MMOs
i Kampala-Makindye division, Airtel Kabalagala branch. Mobile money services are the
~dependent variable; with mobile commerce and mobile payments as the dimensions, whose
.~dicators are; mobile access to financial services, and Peer to Business respectively, while
iobile money operators (MMOs) performance as the dependent variable will be measured using
hanges in sales volume and market share, market expansion, and customer satisfaction. The
onceptual framework can be summarized in figure 1 below.
Independent variable
MOBILE MONEY SERVICES I [ Mediating variables IC Dependent variables
MOBILE MONEY I(
~-
Mobile commerce
o Buying productsand services
o Access to finance
~,~
Mobile payments
e Peer to peer
• Peer to business
‘-~
(~Cash flow rnanagement~”~
o Creditmanagement
(payables)
o Debt management
(receivables)
10
.2.1 Review of related literature
.2.1.1 Financial Inclusion
~ccess to affordable financial services is linked with overcoming poverty, reducing income
[isparities and increasing economic growth. Despite our understanding of the benefits of
inancial inclusion, an estimated 2.5 billion people in lower to middle income countries remain
inbanked. This means they lack access to the financial services needed to invest in their
ivelihoods and protect their assets to enable them to move out of poverty or prevent falling
leeper into poverty. Not surprisingly, the poor, women, youth and rural residents tend to face
even greater barriers to access.
~mong firms, the younger and smaller ones are confronted by more binding constraints to
[kance as compared to larger firms (Global Financial Development Report 2014).
Traditional bricks-and-mortar banking infrastructure is too expensive to serve the poor,
particularly in rural areas. Innovations in technology, such as mobile payments, mobile banking,
and digital identities makes it easier and less expensive for people to use financial services, while
increasing financial security (Donovan, 2012).
More than one billion underserved people in middle and low-income countries have access to a
mobile phone, providing existing infrastructure that can be used to sustainably offer financial
services such as payments, transfers, insurance, savings and credit The Mobile Economy 2013,
GSMA.
This thereby provides an opportunity with mobile money services to create greater financial
inclusion through which to increase economic prosperity for all people, but especially low-
income households with microenterprises.
2.2.2 Empirical review of literatureIn a study of small and micro enterprises in the manufacturing industry in Canada, the
introduction of e-business methods was found to explain 4% of sales growth and 5% of export
performance (Raymond, Bergeon & Bill, 2005). They argue that whichever way one looks at it,
whether profits are stepped up due to cost savings or profits are realized as a result of increased
sales, the effect is notable. (Nyaga, 2013) examined the impact of mobile money services on the
11
erformance of mobile money operators, and found out that use of mobile money has made a
ignificant contribution to the mobile money operators.
First, majority of traders relies on it as opposed to the formal banking sector for their day-to-day
ransactions. Secondly, mobile money operators have a clear understanding of the basic functions
f mobile money services. Banking services assist both customers and businesses to settle their
ransactions. As opposed to traditional banking services, mobile banking is a new innovation,
vhere banking services done through a network referred to as branchless banking. Mobile money
)perators obtain both transactional and informational services through this new technology.
nformation relating to account balance and notification on transactions is also accessible easily.
n addition, processing of loan proceeds, withdrawals, and depositing of funds are also doable
lshengoma, 2011). Traditional banking exposes mobile money operators to risk associated with
~ash transactions but use of mobile banking reduces such risk, save them time and reduce cost of
:ransport. Since the services are accessible within the premise, mobile money operators can
ledicate their time to manage the business well thus reducing operational cost (Otiso et al.,
2013); (Jagun, et al., 2008).The use of mobile payments also provides economies of scale in
procuring of materials and reduces the supply chain (Donner & Escobari, 2010). (Wanyonyi &
Bwisa, 2013), determined the influence of mobile money transfer services on the performance of
MBEs. They found that mobile money operators use mobile money transfer for: transfer when
making purchases from suppliers and transfers when customers buy from the business and for
debt collection for credit sales contributes to improved performance of the micro enterprises.
However, (Wamuyu, et al, 2011), reported a limited use of mobile money transfer for
transactions as opposed to e-comrnerce transactions though mobile money transfer, and that
mobile internet services have a positive significant effect on the performance of mobile money
operators. Financial performance of MMOs is a critical issue since the revenue earned by mobile
money operators determines its sustainability. The frequent sales made improve the profitability
of an enterprise whereas few sales indicate little or no profits at all. Similarly, mobile money
operators are able to receive payments from customers on due dates without spending much
monitoring cost. This cost reduction is beneficial to the MMOs since they are able to create long
term relations to their customers and suppliers (Otis et al. 2013).
12
Vlbogo, 2010) has established the success factors attributable to the use of mobile payments by
4icro-business operators and revealed that the convenience of the money transfer technology
lus its accessibility, cost, support and security factors relate to the behavioral intention to use
nd actual usage of the mobile payment services by the micro businesses to enhance their
uccess and growth.
.2.3 Research gaps
~ll the above literature review by the respective authors presents a more complete picture of
aobile use by MMOs than was previously available to ICTD researchers, and also identifies
riorities for future research, including comparisons of the effect of mobile use across subsectors
f MMOs and assessments of use of advanced services such as mobile Micro-banking and
~iobi1e commerce in developing economies like Uganda. Many studies have been undertaken on
nobile money services focusing on consumer adoption, technology design improvements and
~usiness-driven models. However, to the best of my knowledge, the effects of this advanced
nnovation in the context of Ugandan MMOs performance are not yet well understood and still
equire exploration to further reflect better the subsistence level and informal economy setting
ike that of Uganda. This study intends to respond to the call for rich, qualitative and quantitative
esearch that might extend the conceptual understanding of the effects of mobile money services
~n the MMOs performance particularly in Kampala Makindye Division Airtel Kablagala Branch.
~.3 Mobile Money Taxation
~cross the sub-Saharan region specific taxation of mobile money has been adopted. In Kenya, a
0 percent tax applies on fees for mobile money transfers and other financial transactions. In
Fanzania, an excise tax of 10 percent is levied on mobile money transaction fees. In Zimbabwe,
here is a US$ 0.05 tax on each mobile money transaction (OSMA, 2016).In Uganda, a 10
ercent excise duty rate is levied on fees for all money transfers except those done by banks.
fhis is the mobile money tax.
Lt has been argued that mobile money tax is distortionary Waverman, L., Meschi, M., & Fuss, M.
~2005). High taxes on communications services frustrate efforts to increase telecommunications
3ervice deployment by raising consumer prices and reducing demand for these services
ICCCDE, 2012). It has also been argued that the tax will weaken mobile money’s low cost
banking yet Uganda’s formal banking culture is still quite undeveloped (Daily Monitor, 2014).
13
4obile money tax is thus viewed as regressive because it makes mobile money service costly
nd inaccessible to the poor who need it the most (GSMA, 2016). Mobile money tax is also said
o reduce the economic rewards and therefore discourage innovation in mobile applications
GSMA, 2016). This research seeks to assess the distortionary effect of mobile money taxation
n the industry and the economy.
~ocal Excise Duty (LED) is a tax levied on goods and services of a luxurious nature. The
‘ationale behind this tax is therefore that mobile money use is a form of luxury and not a
~ecessity. However, it is argued that mobile money is not a luxury but rather a necessity. A
‘umber of economic theorists equate the innovation to regular currency arguing that the ubiquity
md utility of mobile money makes it as necessary to the economy as traditional currency. Diniz
mud Albuquerque (2011) differentiate mobile money from other means of electronic payment
~such as credit cards, debit cards, smart cards, etc.) because of its ability to replicate the essential
attributes of traditional money, such as:
Liquidity, acceptability and anonymity. Similarly, (Madise, 2015), argues that mobile money is a
form of digital currency as it is backed by a one-to-one ratio with fiat money. He notes that
mobile money meets the most of the accepted standards and qualities of money such as utility
and value, portability, indestructibility, homogeneity, divisibility and stability of value. The only
qualities it lacks are tangibility and cognizability. He notes that mobile money is even safer to
carry around than fiat money arguing that ‘When one produces a wallet full of notes, one attracts
attention. When one produces a mobile phone, no one really pays attention, unless to admire (or
covet for) the phone’. The only drawbacks he notes regarding the use of mobile money as a full
currency are that it is intangible and is not legal tender. This affects its cognizability as one can
opt out of receiving mobile money and demand payment in fiat money (Madise, 2015). Further,
research has shown that use of mobile money services increases household per capita
consumption by 72 percent. This is because user households are more likely to receive
remittances and at a greater frequency with a greater total value than non-user households
(Munyegera & Tomoya, 2014). This research seeks to determine the extent to which mobile
money is indeed an essential medium of exchange and the impact the tax is having on its
functionality as such.
14
‘elecommunications executives also claim that taxing mobile money uses the service as a proxy
r taxing the hard to reach informal sector. The informal sector generally refers to small and
iicroenterprises that are outside the purview of government regulation and taxation (Heady,
oshi, & Prichard, 2013). The informal sector is the fastest growing segment of the Ugandan
conomy currently accounting for approximately 43 percent of the total economy (UB0S, 2014).
~he informal sector is notoriously difficult to tax. Direct taxation of the informal sector carries
vith it various challenges such as the difficulty of bringing such firms into the tax net, the
~mited revenue potential compared to the high costs of collection and enforcement and the
otentially deleterious impact such a tax could have on small firms (Heady, Joshi, & Prichard,
013). Inevitably, the simplest way to tax the informal sector is indirectly, that is by taxing the
;oods and services that it buys and sells. This is conveniently and productively done through
IAT, import and export duties (Heady, Joshi, & Prichard, 2013) and now through mobile money
axation. This research seeks to confirm whether that was in fact the goal of the tax and assess
he extent to which it is effective in that respect.
vlobile money taxation is however justified by the indirect impact it is apparently having on
egular taxation. Mobile money is indirectly reducing the taxes paid because when consumers
litch banking halls for roadside kiosks and transact from the comfort of their living rooms over
he phone the revenue collected inevitably reduces (Mwesigwa, 2013). The emerging mobile
~ommerce or m-commerce leads to the gradual elimination of intermediaries, such as
vholesalers or local retailers, who are critical for identifying taxpayers. Taxpayers are also more
ikely to evade taxes undetected when the money is received and spent in an informal manner
hrough mobile money with its relatively weaker regulation as opposed to banks. URA has noted
hat ‘the dynamic innovations in the telecommunications industry like the mobile money
latform that enables voice telephony clients to load airtime other than using the conventional
ax point associated with phone talk time coupled with the growth of a vibrant e-comrnerce
sector... seems to be a challenge in fully exploiting these tax lines. This may point to a gap in the
;ax structure for which tax policy reform needs to be undertaken to keep pace with the
:echnological revolution’ (URA, 2016). Therefore creating tax points at the transfer and
withdrawal of mobile money allows URA to tap into otherwise revenue which would easily have
gone unaccounted for.
15
.3.1 Negative effects of Mobile Money Services Usage
is obvious that the use and operation of the mobile money services can be seriously affected
nd customers may also begin to lost trust and confidence in the system if then perception of the
isk that are associated with its usage is high. Hence the trust of the consumers need to be built
nd maintained in the long run, and the understanding of consumers perception of risk level is
nostly high is very helpful in the financial institutions and the mobile money services in pointing
)ut risks and its adverse effect on the performance of the mobile money services.
With regards to the mobile money services and the mobile banking, studies have indicated that
he lack of trust and credibility in the system has been phenomenon or significant concern to the
3ervices providers of the mobile money services, the customers are also of the view that personal
[nformation can be easily made available to third parties either through transferring cash to
unknown numbers without the knowledge of the user are issues that have some impact on the
patronage of the services (Luarn & Lin, 2005). There is a perception that mobile money is been
seen as the more riskier than the non-mobile banking services or mobile money operation and the
first trust of customers in the service is the most important factor in achieving success of the
service operation. Meanwhile from a customer’s opinion it usually difficult to assess and bring
out the difference on the various risk level very meaningfully (Zhao et al., 2008).
And as it is customers may find very tedious to realize and identify potential risks that are related
to the online banking and the network use in operating the mobile money services. Due to the
intangibility of the mobile money operation, it is therefore difficult for customers to evaluate and
weight the services in advance to identify and shortfalls in the services. Research has shown that
in the context of internet banking and mobile moneys, consumers are often anxious about
security issues and their privacy (Gerrard et al., 2006).
The fear by potential customers of losing their investment or monies put in their mobile money
wallet can equally discourage the subscribers from saving with the mobile money merchant or
can adversely affect the smooth implementation and operation of the operations. Certainly fraud
is what occurred or risk that cause the some stakeholders or have exposed them to have loss
money that are held in the system due to a deliberate deception, cheating by other individuals to
deprived them of their rightful belongings or cash in the system. Meanwhile legal risk has to do
with the kind of risk which occurred as result of unexpected lawsuit or judgment or business that
16
ould easily disrupt or cause or have some negative impact on the mobile money operation or
usiness operation practices. Again the liquidity issues are the associated risk that reduced the
~bility of the merchant and the mobile money operators to effectively provide the agents in
fleeting the cash obligation of the customers upon demand or meeting their request on timely
nanner.
~s the emergence of mobile money has brought about tremendous benefit to both the customers
md the mobile money merchant, there exists some associated level of risk especially the
~nerchant most often than not encounter. However, one other issue that has been notice to be
~rucial in consumer decision making is the extent of perception that customers have towards a
particular products or services with respect to its purchasing and the subsequent use (Luarn &
Lin, 2005). The following are the risks involved in mobile money operation. Merchant in most
cases face risk such as financial loss during service delivery process and this risk seriously pose a
risk to and further hinder the effectively mobile money operation among merchant. The buying
situation of customers is critically checked based on the level of risk perceived and subscribers
of mobile money are of no exception and therefore encounter similar risk. Culnan (1999) are of
the view that risk perception by the consumer is the basic predicament or obstacle that hinders
the future growth and prosperity of the mobile money operation in recent time. Likewise the
growth and effective operation of the 3G network would adversely be affected if the risk
perception continually increases overtime as well as the mobile banking due to the analogue
characteristics.
2.4 Effect of mobile money tax to the mobile money customers
As mobile money users dominate in sub-Saharan Africa and liquidity/cash-flow management are
key bottlenecks for mobile money operations, the fast diffusion of mobile money transfer was
viewed as a potential key tool for facilitating financial transactions. Research shows that most
business owners have mobile phones; over 80% and the difference between formal and informal
businesses is small (Esselaaretal, 2008). Although the technology is accessible to mobile money
operators in many sub-Saharan countries, little is known to date of the scope, direction and
impact on the businesses. There is thus scant empirical data on the phenomenon (Lennart
Bângens & Björn Soderberg, 2011).
17
he Effect of Cash flow management on Mobile payments Microenterprises obtains both
ransactional and informational services through this new technology. Information relating to
ccount balance and notification on transactions is also accessible easily. In addition, processing
f loan proceeds, withdrawals, and depositing of funds are also doable (Ishengorna, 201 1).
~‘raditional banking exposes mobile money customers to risk associated with cash transactions
ut use of mobile banking reduces such risk, save them time and reduce cost of transport. Since
he services are accessible within the premise, mobile money customers can dedicate their time
o manage the business well thus reducing operational cost (Otiso et al., 2013); (Jagun, et al.,
~008).
~he use of mobile payments also provides economies of scale in procuring of materials and
educes the supply chain (Donner & Escobari, 2010). (Wanyonyi & Bwisa, 2013) determined the
nfluence of mobile money transfer services on the performance of mobile money customers.
rhey found that MMOs use mobile money transfer for:(Mobile payments) transfer when making
)urchases from suppliers and (customer to the business) transfers when customers buy from the
)usiness and for debt collection for credit sales contributes to improved performance of the
nobile money customers. However, Wamuyu, et al. (2011) reported a limited use of mobile
noney transfer for transactions as opposed to e-commerce transactions though mobile money
ransfer, and that mobile internet services have a positive significant effect on the performance of
nobile money customers.
~‘inancial performance of mobile money customers is a critical issue since the revenue earned by
riobile money operators determines its sustainability. The frequent sales made improve the
Drofitability of an enterprise whereas few sales indicate little or no profits at all. Similarly,
xiobile money operators are able to receive payments from customers on due dates without
;pending much monitoring cost. This cost reduction is beneficial to the mobile money operators
since they are able to create long-term relations to their customers and suppliers (Otis et al.
2013).
2.5 Effect of mobile money tax to the mobile money agents
~ number of papers have documented the impacts of mobile phones causing reduced price
variation in markets. (Jensen, 2007) and (Aker, 2010) find that the introduction of mobile phones
reduced price dispersion in fish markets in Uganda and grain markets overseas respectively. In
18
hese instances the mobile phone technology has increased information flows, which has resulted
ri price reductions.
vlobile finance services such as premiums and asset accruals do have a positive effect on the
ales of mobile money customers. Similarly, mobile banking services including withdrawals,
naking deposits and getting loans through the phone increases the liquidity position of the
nobile money operators. They can increase sale due to availability of funds to settle suppliers
tnd pay for other obligations, with mobile money services. The use of mobile payment services
~ontributes much on mobile money operator’s sales. However, the other services contribute to
he effect, mobile payment contribute much. Mobile money services therefore have a significant
ositive effect on sales of mobile money operators.
Viobile phones provide technological services that reduce costs; increase income and increases
each ability and mobility. They can help to extend social and business networks and they clearly
mbstitute for journeys and, for brokers, traders and other business intermediaries (Donner 2005),
~Hughes & Lonie, 2007). It is therefore important to note that the adoption, usage and the
influence mobile phones have an effect on the mobile money operators of Uganda (Mukami
~vIunyange, 2012).
The uses can be categorized as social, business/economic and political. For mobile money
operators entrepreneurs, just like all other users use mobile phones same device for both business
and social purposes, as a result there were increased profits in business, and enhanced social
networks (Chogi, 2006). The emergence of mobile money service, a Text messaging (SMS)
provide the solution to small businesses banking needs for the majority of the Ugandan
population, because the majority don’t hold bank accounts but they do have the services of a
mobile phone, hence they could settle bills by building up credit on the mobile phones and then
sending a text (SMS) to make a payment. The leading mobile service providers in Uganda like
Airtel have introduced some money transfer services whose objective is to enable Ugandan to
make ‘micro payments’ using their mobile phones. These services are supposed to provide an e~
commerce platform of choice in a country where credit cards have struggled to reach most the
population without the bank accounts. Mobile money transaction, an innovative new mobile
payment solution that enables customers to complete simple financial transactions by use of
mobile phone (Hughes & Lonie, 2007), (Chogi, 2005).
19
the study by (Muriuki, 2011) and (Mbogo,2010), factors that were found to make the use of
/Iobile money services to be high were low transaction costs, the costs associated with the
ending of money using the mobile payment services is also very low as compared to those from
he commercial banks and other money transferring companies (Omwansa, 2009); ease of
peration of the money transfer process; easy accessibility of the money transfer service, today
\irtel has over 35,000 agents countrywide within easy reach of Ugandan , and about 70% of
inancial transactions are now handled by Airtel company (Sullivan, 2011); speed of transaction,
noney is sent and received by the recipient immediately; efficiency in use of the Airtel services;
md Support from the Mobile Payments Provider is essential. Payment systems exhibit network
~xterna1ities as the value of a payment system to a single user increases when more users begin
.o use it (Mallat, 2007).
~Jso, (Davies, 2007), evaluating the multiplier effect of a cash transfer programme in Malawi
~iotes that when cash is injected in a region from outside and used to make purchases of goods
rnd services produced in the region, will stimulate local sales hence better performance for local
businesses.
[n their study on Mobile Money transfer use among mobile money operators in Makindye
division Kabalagala branch, (Bângens and Soderberg, 2011), focused on business usage such as
paying suppliers or receiving payments from customers. The results were based on mobile
money operators mainly located in Makindye division Kabalagala branch but partly in Kampala
Uganda, the impact was mainly seen in time saved and improved logistics though there were
indirect effects on liquidity; (Pagani, 2004), states that accessibility (ability to reach the required
services) is one of the main advantages of mobile payment services. The micro-business
operators go to the bank less often and spend more time running their businesses. Equally, many
unbanked Ugandans can now receive or send money wherever they are in the country
(Omwansa, 2009). Majority of the mobile money operators are familiar with the use of the
mobile payment services as they are easy to use and require no formal training before use. With
more time in the business, more customers are served leading to increased sales and therefore
growth of the business.
20
CHAPTER THREE
METHODOLOGY
.O Introduction
[‘his chapter dealt with how data was to be collected, managed and analyzed. It focused on
esearch design, area of study, population, sample size and selection method, data collection
:ools, data management and the limitations that the researcher will face while doing this study.
3.1 Research Design
Sekeran (2009) defines research design as the scheme, outline or plan that is used to generate
answers to research problem. It can also be defined as the master plan specifying the methods
and procedures for collecting and analyzing the needed information.
The study employed a descriptive survey design basing on the use of qualitative and quantitative
approaches that were to be adopted. This design was used for profiling, defining, segmentation,
estimating, predicting, and examining associative relationships. Descriptive survey design
studies easily provide a quick snapshot of what’s going on with the variables for the research
problem. A random sampling system was used in the study.
3.2 Population of the Study
Sekeran (2009), defined population as basically, the universe of units from which the sample is
to be selected. The term ‘Units’ is employed because it is not necessarily people alone who are
sampled. It can also be defined as the entire group of people, events, or things of interest that the
researcher wishes to investigate. The research constituted from the study population of 60
comprising of clients of mobile money operators in Airtel, Kabalagala branch and these included
the students, civil servants and business menlwomen who were part of the mobile money users.
3.3 Sample Size
This refers to the number of respondent to who you obtain the required information of the study.
The sampling frame work will be drawn from the list of clients of mobile money operators at
random sample where all the members of the study population had equal and independent chance
of selection in a sample. For example 60 respondents were chosen to represent the total
population and this comprised of 50 as the sample size; 10 students, 20 civil servants and 10
business men and 20 women.
21
N1=
1 + N (e2)
NLl+N~zWhere;1= the required sample size
the known population sizethe level of significance, which is fixed at 0.05
[able : 3.1 Showing sample size
60— 1 + 60(0.05)2
601 + 60 (0.0025)
60— 1 + 0.195
5860— 1.195
n = 50
ategory of respondents Population size Sample Techniques
;tudents 10 6 Simple random
~ivi1 servants 20 18 Simple random
3usiness men 10 16 Simple random
3usiness women 20 10 Simple random
[otal 60 50
~ource: Primary Data 2019
22
~.4 Sampling Techniques
Vith regards to the selection of respondents for the conduct of the survey, the study employed
)urposive and convenient sampling techniques. Convenient sampling which is also called the
udgement sampling includes the selection of the samples haphazardly the respondents that are
~ery easy to obtain for your sample since the process of the sample selection continues up to the
ime the your required sample size selected has been realized (Saunders et al 2009).This method
vas adopted with regards to the selection of respondent who can actually provide the correct data
‘or the study, Purposively, the researcher knows most of the customers who use mobile money
ervices.
L5 Sources of data
)ata is defined as facts, opinion, and statistics that have been collected together and recorded for
eference or for analysis (Saunders et al. 2009).The source of data is from primary source that is
he use of questionnaires.
~. combination of primary and secondary data sources will be used to extract data in an attempt
o assess the effect of mobile money tax to mobile money users in Uganda in accordance to
~drtel Uganda Kabbalagala perspective.
.5.1 Secondary data Collection
l’he secondary sources of data will come from published articles related to success of projects, a
ody of existing literature from records of projects will be undertaken, textbooks, internet but
iiost especially Airtel Uganda Kabbalagala.
3.5.2 Primary Data collection
Fhe primary source of data will come from questionnaires (structured and unstructured) from the
:elevant people. This will be done after the pretest of the questionnaire. The organization
~ontinues to grow into a center of academic excellence. Primary data will give detailed
definitions of terms and statistical units used in the study. Questionnaires, observations will be
used to extract primary data.
3.6 Data Collection Methods
According to (Mugenda 2003), the successful completion of a sampling procedure connects the
research with the respondent and specifies the kind and number of respondents who will be
23
nvolved. The investigator knows at this stage not only what was studied, but also who to
Lpproach for the required information. The information was available, provided that the right
connection’ between the researcher and the respondents was made. This connection was made
hrough the methods of data collection.
.6.lQuestionnaire Method
[his method was convenient and easy to tabulate and the answers could be expected within short
ime, this involved oral written questionnaires for the respondents to read and interpret what was
~xpected of them (Williams, 2003).
3.6.2 Response rate
~espondents were given two weeks to complete the questionnaires. The researcher submitted 50
4uestionnaires at Airtel Kabalagala Branch mobile money services. However, by the end of the
lata collection process, 41 questionnaires were returned posing a respondent rate of 82% and
aon- respondent rate of 18% as shown in the table 2 below. It implied that more than half of the
~arget population participated in the process giving high level of precision to the findings.
3.7 Measurement of Variables
3.7.1 Validity of Instruments
Validity is the efficiency or the degree to which a method, a test or a research tool actually
measures what is supposed to be measured. It refers to the accuracy of the research data. For this
case, the validity of the questionnaires was tested using the Content Validity Index test (CVI).
(Carole, Kimberlin and Almut,Winterstein 2008), this involved item analysis to be carried out by
the supervisors and an expert who were knowledgeable about the study. This process involved
examining each item in the questionnaire to establish whether the items bought out are the ones
expected. Item analysis is conducted using the scale that runs from Relevant (R), Neutral (N), to
Irrelevant (I).The instrument was refined based on experts’ advice. The following formula was
used to test validity index.
CVI = No. of items regarded relevant by judges
Total No. of items
41/50x100
=82%
24
L7.2 Reliability of Instruments
~eliability means the degree of consistency of the items, the instruments or the extent to which a
est, a method, or a tool gives consistent results across a range of settings or when it was
~dministered to the same group on different occasions.
;.7.3 Data Validity
3efore the final data was analyzed, the collected data was re-tested as part of the pilot study to
ensure that the right data was made available. Any other missing data was corrected and made
eady for final analysis.
~.8 Data Analysis
~fter collecting the question, data was analyzed either manually or computerized both qualitative
md quantitative form primary recorded data and interview guides for the quantitative data,
~omputer was employed to analyze data by use of graphs, frequencies and cross tabulation Field,
A~. (2005).
3.9 Ethical considerations
The following activities were implemented by the researcher to ensure confidentiality of the
[nformation provided by the respondents and to ascertain the practice of ethics in this study.
Saunders, Lewis, and Thornhill, (2009).
The selected effects of mobile money on mobile money operators in Makindye Division
Kampala, Uganda of Airtel, Kabalagala Branch respondents were coded instead of reflecting the
names.
Soliciting permission was done through a written request to the concerned mobile money on
mobile money operators in Makindye Division Kampala, Uganda of Airtel, Kabalagala Branch
and customers included in the steady.
Agreement was reached with the organization’s Human Resource Manager that no information
would be made public without his prior consent, and after he had been provided with the
opportunity to view the findings of this research.
25
)ne of the biggest concerns in research was the protection of the respondents’ interests and well
eing through the protection of their identity. If revealing their survey responses would injure
hem in any way, adherence to this norm becomes all the more important.
~ respondent may be considered anonymous when the researcher cannot identify a given
response with a given respondent.
Another ethical consideration was that of confidentiality. The participants must be assured that
the data was only used for the stated purposes of the research and that no other person would
have access to the research data.
Confidentiality can identify a given person’s responses but essentially promises not to do so
publicly. In an effort to ensure this, all names and addresses should not be written on the
questionnaires but with identification numbers. All completed questionnaires were coded and
names of respondents did not appear to ensure this.
3.10 Limitation of the study
The researcher in carrying out the research work was limited in the following ways; the research
was limited by time period. The researcher had only six months to carry out the research.
Due to limited time frame, the study could not cover all the components of effect of mobile
money on mobile money operators in Makindye Division Kampala, Uganda of Airtel,
Kabalagala Branch and posed difficulties to compile all the necessary information about the
money on mobile money operators in Makindye Division due to time limit.
Most operators of the mobile money operators were uneducated and this made it difficult to get
valid information from them about money on mobile money operators in Makindye Division in
of their businesses.
Worse still, the leaders in the mobile money services were busy attending to their material affairs
and rarely spared time for the researcher. Financing the research study was too costly in terms of
transport costs, feeding and processing of the proposal and research report.
26
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.Olntroductionfhis chapter presents the findings of the study on. The findings serve to reinforce the existing
knowledge proven about the Effects of mobile money on mobile money operators in Makindye
Division Kampala, Uganda. A case study of Airtel, Kabalagala Branch. This chapter covers
presentation, analysis and interpretation of the study findings. The findings are presented in the
gist of the three objectives that the study was set to achieve; to determine the effect of mobile
money tax to the Airtel Company, to examine the effect of mobile money tax to the mobile
money customers in Kabalagala and to establish the effect of mobile money tax to mobile money
Agents in Kabalagala.
The interpretation of the data is intended to enable the researcher make appropriate conclusions
and recommendations for better understanding of the research problem.
This chapter presents and discusses the findings of the study on the Effects of mobile money on
mobile money operators at Airtel, Kabalagala Branch.
The analysis is based on the objectives of the study and the presentation and the interpretationdone with the help of tables, pie charts and narrative text as follows;
4.1 Response rateThe researcher submitted 50 questionnaires at Airtel Kabalagala Branch. However, by the end of
the data collection process, 41 questionnaires were returned posing a respondent rate of 82% and
non- respondent rate of 18% as shown in the table below. It implied that more than half of the
target population participated in the process giving high level of precision to the findings.
Table: 4.1 Response rate
Questionnaires Frequency Percentagedistributed
Respondents 41 82%
Non response 9 18%
Total 50 100
Source: Primary Data 2019
27
The feedback received from the pilot study showed that more respondents took time to fill in the
questionnaires and the discrepancy of 18% could be caused by the respondents who failed to get
time to fill the questionnaires.
Figure:4.1 showing the response rate
4.1.1 Background InformationGender of the respondents
Table: 4.2 Findings on the gender of respondents
Response Frequency Percentage Cumulative %Male 20 49 49Female 21 51 100.0Total 41 100.0
Source: Primary Data 2019
Table 4.2 results indicate that most of the respondents were females 21 (51%) and females are 20
(49%). This indicates that females dominated in the sample.
Response rate
Non Returnedquestionnaires
~ Returned questionnaires
Source: Primary Data 2019
28
bracket has potential to make wise decisions hence prevention of barriers to education and
promote education to primary education.
4.1.3 Response on the level of education of the respondents
Here respondents were asked about their highest level of education that is; those with
Certificates, Degree, Diploma and others. The results were as follows;
Table: 4.4 Findings on the level of education
Response Frequency PercentageCertificate 08 20Diploma 17 41Degree 13 32Masters 02 5None 01 2
Total 41 100Source: Primary Data 2019
As regards the level of education, 08 (20%) were certificate holders, 17 (41%) were diploma
holders, 13 (32%) were degree holders, 02(5%) were masters and 01 (2%) never had any
qualification. Most of the respondents have a diploma 21(42%) and the minorities were master’s
holders. This means that they need also to improve on their education so that they can prevent
the barriers to primary education in conflicts.
Figure:4.4 showing the level of education
50
40
30
20
10
0
Series 1
~ficate Diploma Masters None
Source: Primary Data 2019
Figure 4.4 as regards the level of education, 08 (20%) were certificate holders, 17 (4 1%) were
diploma holders, 13 (32%) were degree holders, 02(5%) were masters and 01(2%) never had
any qualification. Most of the respondents have a diploma 21 (42%) and the minorities were
30
master’s holders. This means that they need also to improve on their education so that they can
prevent the barriers to primary education in conflicts.
4.1.4: Distribution by Marital StatusThe respondents were asked to state their marital status.
Table: 4.5 Shows the distribution by Marital Status
I Response Frequency Percentage Cumulative%
Single 15 36.6 36.6Married 19 46.3 82.9Widow/er 3 7.3 90.2Separated /divorced 4 9.8 100.0
Total 41 100.0Source: Primary Data 2019
Figure:4.5 Shows the distribution by Marital Status
5045
40
35
30
25
20
15
10
5
0
E~~
I~
Married Single Divorced Widow~
Series 1
Source: Primary Data 2019
Table 4.5 and figure 4 above shows the following analysis as regard the marital status of the 41
respondents, 15 respondents representing 37% of the sample were single,19(46%)were married,
3 (7%)were window/er while 4 (10%) were divorced.
This implies that most of the mobile money operator’s in in Airtel Kabalagala branch was
operated by married people and singles. This finding is related to the pressing domestic
responsibilities that compel people to find out more responsibility.
31
4.2 To determine the effect of mobile money tax to the Airtel Company.SECTION B: To determine the effect of mobile money tax to the Airtel Company.
Please evaluate the following statements by ticking under the appropriate figure basing on the
scale below:
Table: 4.6 Shows the effect of mobile money tax to the Airtel Company.
Effect of mobile money Strongly Agree Not sure Disagree Strongly Totaltax to the Airtel Agree DisagreeCompany
F %F %F % F % F % F %
Mobile Money provides 18 44 15 37 02 5 03 7 03 7 41 100reliable networkservices to enhanceservice deliveryprocesses?Mobile Money provides 21 51 14 34 00 0 02 5 04 10 41 100available cash to pay thesubscribers as and whenthe need arise?Mobile money reduces 49 10 24 00 0 05 12 06 15 41 100the difficulties involvedin searching forfinancial premises totransact any business?
23 56 9 22 04 10 02 5 03 7 41 100The high operationalcosts affect the profit ofmobile moneyoperators?
28 68 8 20 00 0 01 2 04 10 41Taxes paid by mobilemoney operators reducetheir profits? I
Source: Primary Data 2019
32
Table 4.7 above present’s findings on the effect of mobile money tax to the Airtel Company.
The table presents information regarding mobile money tax to the Airtel Company. The data
collected was based on the Likert scale of strongly agreed, agreed, disagreed and strongly
disagreed.
The table presented a mechanism through regarding the effect of mobile money tax to the Airtel
Company.
Mobile Money provides reliable network services to enhance service delivery processes used
according to the findings the 44% of the respondents strongly agreed, 37% agreed while 7% of
the respondents disagreed while 7% of the respondents strongly disagreed with the findings of
the study.
The findings indicated that mobile money provides available cash to pay the subscribers as and
when the need arise as indicated by responses 51% of the respondents who strongly agreed, 34%
agreed while 5% disagreed and 10% of the respondents strongly disagreed.
The findings indicate that; Mobile money reduces the difficulties involved in searching for
financial premises to transact any business as indicated by responses 49% of the respondents
strongly agreed, 24% agreed with the findings, 12% disagreed while 15% of the respondents
strongly disagreed.
The study findings also indicated that the high operational costs affect the profit of mobile
money operators with 23(56%) of the respondents who strongly agreed while 9(22%) of the
respondents agreed while 2(5%) of the respondents disagreed and 3(7%) of the respondents
strongly disagreed.
The study findings also indicated that high taxes paid by mobile money operators reduce their
profits with 28(68%) of the respondents who strongly agreed while 8(20%) of the respondents
agreed while 1(2%) of the respondents disagreed and 4(10%) of the respondents strongly
disagreed.
The study findings reveal that high taxes paid by mobile money operators reduce their profits
which had a negative effect on the Mobile money company in Makindye division Kabalagala
branch with 68% of respondents who strongly agreed and 20% agreed.
33
~cording to Ndii, D. (2016, July 15), Mobile money has been one of the biggest revolutions in
~rica and particularly in Uganda’s money markets in the last six years.
~e would therefore understand why the Central Bank would leverage on it to attain a cashless
~onomy. However, the industry has been disrupted in the last three months and continues to be
~der pressure because of excessive taxation.
i July government implemented a 1 per cent tax on every mobile money transaction in addition
an increase in Excise Duty from 10 to 15 per cent. The new demands threw the industry in a
ear crisis that would later see mobile money transactions decline by Shs67Ob in only two weeks
f implementation.
1.3 To examine the effect of mobile money tax to the mobile money customers in~(abaIagaIa.fhe second research objective was to examine the effect of mobile money tax to the mobile
inoney customers in Kabalagala.
The study was presented based on the findings from the field as presented in the values assessed
below.
I withdraw frequently from themobile money services?Mobile Money is a cheaperalternative for transferring
~ückl~Mobile money reducesfinancial pains and difficultiesin makiiMobile money provides acashless method for facilitatingbusinesses?With mobile money, the poorhave a simple and safe way tosave money for futurehealthcare costs?
Table: 4.8 showing the effect of mobile money tax to the mobile money customers
~ D~agree To~lthe mobile money customers
Source: Primary Data 2019
34
The study findings in table 4.7 provided that the effect of mobile money tax to the mobile money
~ustomers in Airtel mobile money customers at Kabalagala branch Makindye division. The
[indings in the table provided that the effect of mobile money tax to the mobile money customers
were prevailing.
The findings indicated that I withdraw frequently from the mobile money services as indicated
y responses 23(56%) of the respondents who strongly agreed, 9 (22%) agreed while 2(5%)
disagreed while 7(17%) strongly disagreed in that regard.
The study findings also indicated that Mobile Money was a cheaper alternative for transferring
~noney quickly as indicated by responses 21(51%) of the respondents who strongly agreed while
14(34%) of the respondents, 2(5%) of the respondents while 4(10%) of the respondents who
strongly disagreed.
The findings revealed that, Mobile money reduces financial pains and difficulties in making
payment as indicated by responses 28(68%) of the respondents strongly agreed while 8(20%)
iisagreed while 1(2%) of the respondents of disagreed while 4(10%) of the respondents strongly
agreed on the study provided.
The findings revealed that Mobile money provides a cashless method for facilitating businesses
as indicated by responses 17(41%) of the respondents who strongly agreed, 15(37%) agreed
while (7%) disagreed while 6(15%) strongly disagreed in that regard.
The findings revealed that with mobile money, the poor have a simple and safe way to save
money for future healthcare costs as indicated by responses 24(59%) of the respondents who
strongly agreed, 12(29%) agreed while 2(5%) disagreed while 3(7%) strongly disagreed in that
regard.
The positive effect of Mobile money reduces financial pains and difficulties in making payment
indicate that customers are convinced with Cash flow management thus the credit management
and have greatly increased overtime by response of 68% and there are suggestions with mobile
money, the poor have a simple and safe way to save money for future healthcare costs and has
greatly increased overtime by 59%.
35
According to Inter Media. (2012), Mobile money is still not widely used for payment for goods
and services. This is mainly due to the high withdraw charges which the payer would have to
include in any payment as stated by other others user that, Mobile money provides a cashless
method for facilitating businesses.
4.4 To establish the effect of mobile money tax to mobile money Agents in KabalagalaThe third research objective was to establish the effect of mobile money tax to mobile money
Agents in Kabalagala.
Table: 4.9 Shows the effect of mobile money tax to mobile money Agents.
Effect of mobile money tax Strongly Agree Not sure Disagre Strongly Totalto mobile money Agents Agree e Disagree
F % F %F %F %F %F %
Mobile money agents face 30 73 6 15 00 0 02 5 03 7 41 100the problem of fraud by thecustomers?
Mobile money tax affects the 24 58 11 27 00 0 02 5 04 10 41 100growth of businesses for theagents?
Mobile money agents face 20 49 10 24 00 0 05 12 06 15 41 100the problem ofnetwork/connectivityproblems?
Repeated purchased affect 24 58 1 1 27 00 0 02 5 04 10 41 100both the customer and theoperator of the mobilemoney in reducing the salesvolume?
The effect of mobile money 18 44 15 37 02 5 03 7 03 7 41 100tax is simply shifted to theconsumer by increasing theircharges.
Source: Primary Data 2019
36
The study findings also revealed that Mobile money agents are faced with the problem of fraud
by the customers as indicated by responses 30(73%) of the respondents strongly agreed, 6(15%)
of the respondents agreed while 2(5%) disagreed and 3(7%) strongly disagreed.
The study findings indicated that, Mobile money tax affects the growth of businesses for the
agents the result revealed that 24(58%) of the respondents strongly agreed, 11(27%) of the
respondents agreed while 2(5%) disagreed while 4(10%) of the respondents strongly disagreed
according to the respondents.
The study findings revealed that, Mobile money agents are faced with the problem of
networklconnectivity problems which indicated 9(35%) of the respondents strongly agreed,
20(49%) of the respondents agreed, 10(24%) of the respondents who disagreed 6(15%) who
strongly disagreed were 5(12%).
The findings indicated that, repeated purchased affect both the customer and the operator of the
mobile money in reducing the sales volume as indicated by the responses 24(58%) of the
respondents strongly agreed while 11(27%) of the respondents agreed while 2(5%) disagreed and
4(10%) strongly disagreed.
The study findings also revealed that, the effect of mobile money tax was simply shifted to the
consumer by increasing their charges.as indicated by responses 18(44%) of the respondents
strongly agreed, 15(37%) of the respondents agreed while 3 (7%) disagreed and 3(7%) strongly
disagreed.
On average of the effect of mobile money to agents is that they face the problem of fraud by the
customers in Airtel money Kabalagala branch in Makindye Division Kampala District a
negative effect that mobile mobey agents have no security in their operation of their services to
customers and the findings over 73% levels of agreement on the areas provided / studied or
selected and those who agreed with 15%.
According to Kaweesi, C. K. (2004), the MNOs all unanimously reported that there is very low
cost in setting up the compliance structure. All Mobile Money Operators MNOs stated that it
simply involved a one-off reconfiguration of their systems. As analyzed, though these agents are
affected by theft customers, others from the interpretation argued that, the effect of mobile
money tax is simply shifted to the consumer by increasing their charges.
37
4.5: Data analysis and findingsTaxation is not likely to influence demand for mobile money transfers. As it is currently applied,
the taxation of mobile money appears to have little direct influence on demand for
telecommunication companies. This is chiefly due to the significant comparative advantage
associated with the mobile money payment channel.
According to Vanhelleputte, (2018), the mobile money transactions have reduced by 33%
following the introduction of mobile money tax. In the same way, according to the analysis of
mobile money reports, it’s seen or evident that the mobile money supports over 5,000 savings
and credit cooperative societies meaning that taxing the mobile money business is a big risk.
This tax is seen as a discriminative and unfair hence it violates many canons of taxation for
example the canon of equity is abused.
The study found out that there exist mobile money taxes to customers according to Inter Media.
(2012), Mobile money is still not widely used for payment for goods and services. This is mainly
due to the high withdraw charges which the payer would have included in any payment as stated
by other others user that, Mobile money provides a cashless method for facilitating businesses.
Despite the clamour over the high mobile money charges to operators are negatively affected by
theft customers, others from the interpretation argued that, the effect of mobile money tax is
simply shifted to the consumer by increasing their charges.
The LED at 10% clearly makes up the smallest proportion of the costs to the MNOs in
comparison to agent commissions which range between 30-40%.It should however be noted that
tax is not the only determinant of the rates. For example in May 2013 telecommunication
companies like Airtel increased the mobile money charges citing cumulative inflation and other
economic affairs.
38
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.0 Introduction
In this section we discuss the main findings, draw a summary, conclusion and make
recommendations.
5.1 Summary of findings and interpretation
The objective of the study was to assess the effect of mobile money tax to mobile money users in
Uganda in accordance to Airtel Uganda Kabbalagala perspective. From the analysis, the mobile
money operators have employed mobile money tax.
5.1.1 Objective one
The first research objective was to determine the effect of mobile money tax to the Airtel
Company.
The study findings reveal that high taxes paid by mobile money operators reduce their profits
which had a negative effect on the Mobile money company in Makindye division Kabalagala
branch with 68% of respondents who strongly agreed and 20% agreed. Mobile money has been
one of the biggest revolutions in Africa and particularly in Uganda’s money markets in the last
six years.
5.1.2 Objective two
The second research objective was to examine the effect of mobile money tax to the mobile
money customers in Kabalagala.
The study findings revealed that there is a positive effect of Mobile money which reduces
financial pains and difficulties in making payment indicated that customers are convinced with
Cash flow management thus the credit management and have greatly increased overtime by
response of 68% and there are suggestions with mobile money, the poor have a simple and safe
way to save money for future healthcare costs and has greatly increased overtime by 59%.
39
5.1.3 Objective three
The third research objective was to establish the effect of mobile money tax to mobile money
Agents in Kabalagala
On average of the effect of mobile money to agents, face the problem of fraud by the customers
in Airtel money Kabalagala branch in Makindye Division Kampala District a negative effect
that mobile mobey agents have no security in their operation of their services to customers and
the findings over 73% levels of agreement on the areas provided / studied or selected and those
who agreed with 15%.
5.2 Conclusion
Having gone through this topic, it was reasonable to conclude that mobile money is increasingly
becoming a critical part of the nation’s economy.
The results generally show that mobile money usage has played a very critical and significantly
role in assisting customers or subscribers of the mobile money services to effectively enjoy the
mobile money services such as the cash withdrawal, cash deposit and purchase of recharge cards
and transfer of cash among various subscribers.
The mobile money services has served as a means through which the customers and the
subscribers of mobile money have turned to look for alternative ways and means for either
engaging in any form of financial transactions ranging from cash deposit to transfer of cash to
relatives and business partners.
The mobile money usage has tremendously affected the behavioral intention of customers to
save with banks, in that the services have greatly provided an alternative means of transferring,
depositing cash, purchasing of recharge cards and above all enhanced easy and comfortable
means through which the subscribers or customers can effectively withdraw cash as and when
the need arises.
The implication is that, withdrawal from mobile money by means of financial transactions has an
impact on customer intention to save and customers care when it comes to withdrawal of money
from mobile money.
40
Again, withdrawal assist customers of meeting daily financial obligation with regards to any
transaction, hence have much impact on the mobile money services.
Briefly, cash withdrawal and cash deposit is specifically relevant and largely making a
significant contribution to the prediction of customer behavioral intension to save.
It also serves as a source of government revenue and as such any tax imposed should not inhibit
or limit the development of the industry.
As it is applied today, the tax remains ambiguous leading to points of revenue leakage however
it does not appear to significantly distort the industry.
5.3 Recommendations
The researcher made the following recommendations as a way of the introduction of mobile
money tax has seen the country experience much more problems including resentment from
different stakeholders both in and outside the country (Uganda).
This has as well been accelerated by Telecommunication companies like MTN and Airtel
meeting the parliamentary committee on finance to have the tax withdrawn or scrapped due to its
massive negative effects on the economy.
Based on the findings made from this research study, the following recommendations are
therefore made:
From the findings it is recommended that consultations between the revenue authority and
stakeholders should be fostered and encouraged. Consultations with regulatory authorities,
telecom companies and subscribers should be made the norm prior and subsequent to the
introduction of any tax in the telecommunications industry.
The consultations would clarify ambiguities prior to the introduction of the tax and subsequent.
It should be noted that the telecom sector is an industry that evolves constantly and therefore any
provisions targeting a specific aspect can quickly become obsolete.
The current ambiguity leading to tax leakage and conflicting applications of the tax should be
eliminated. URA should begin with harmonizing the apparent conflicting views on the tax so that
it can be applied uniformly.
41
Alternatives to Local Excise Duty (LED) should be considered. Despite URA’ s claim that the
LED can be used as any other fiscal tool its use to tax a service that is neither a luxury nor a vice
clearly remains an anomaly. One possible alternative is a Value Added Tax which is applied to
the transaction fees in Uganda.
The Value Added Tax (VAT) could be applied after the costs of the service to the Mobile Money
Operators (MNO) such as agent commissions have been deducted. Admittedly such a tax would
require a better understanding of the Ml\TO services therefore collaboration with Uganda
Communications Commission (UCC), would be necessary.
More collaboration with regulatory bodies is necessary. URA should seek to collaborate more
with BoU and UCC in ensuring that the tax is properly administered. This can be done by
comparing data submitted to the different agencies.
Joint audits can also be arranged so that the different expertise of the organizations can be used
in ensuring accurate reporting by MThJOs.
Finally the law should be amended so as to require MNOs to set up subsidiaries to handle mobile
money as a separate service.
These subsidiaries would be full-fledged Financial Institutions that Bank of Uganda can regulate.
This would allow BoU to exercise strict regulatory and reporting requirements including control
over mobile money charges.
5.4 Limitation of the study
In attaining its objective, the study was limited to mobile money operators in Makindye Division
Kampala, Airtel, Kabalagala Branch. The study was also limited to the degree of precision of the
data obtained from the respondents hence it could be prone to shortcomings since it is not
verifiable.
Another limitation was the confidentiality of respondents. Some of the respondents considered
their savings and loans details to be confidential information hence they could not disclose such
information. Others were unwilling to disclose the correct value of their investments.
42
The third limitation non-response, owners of businesses were busy attending to their customers
and rarely spared time for the researcher. Some respondents were unable to return questionnaire
within the given time frame.
5.5 Areas for further research
The researcher carried out this study, “The effects of mobile money on mobile money operators
in Makindye Division Kampala, Airtel, Kabalagala Branch” but it was not exhaustive owing to
constraints in terms of scope, time and finance. Further research is therefore needed in areas such
as;
Future research should evaluate relationships between mobile money services and mobile money
operators in other emerging or developing economies.
Future studies using mobile money services and mobile money operators should be looked at
from the service providers perspectives so as to deepen understanding on how the emergence of
Mobile Money services affect mobile money operators.
43
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48
APPENDICES
APPENDIX I:
QUESTIONNAIRE
Dear respondent,
I Kansiime Harriet Reg. No. 1163-05014--06333 a student of Kampala International University
undertaking a Bachelor’s Degree of Business Administration. Currently am carrying out a
research study on Effects of mobile money on mobile money operators in Makindye Division
Kampala, Uganda; A case study of Airtel, Kabalagala Branch as part of the requirements for a
ward of Bachelor’s Degree of Business Administration. This questionnaire is therefore intended
to seek information on the above subject matter. The information is purely for academic
purposes and all the answers will be handled with utmost confidentiality. I therefore humbly
request that you complete this questionnaire correctly in the spaces provided or options given.
(Please, tick the appropriate answers where options are given).
SECTION A
Demographic characteristics of respondents
1. Sex of respondents
Male
Female
2. Age of respondent
18-29 years
30-39 years
40-49 years
49 & above years
3. Highest Level of education
O’Level & Below
A’ Level LZDiploma
Degree
Postgraduate
49
4. Marital Status.
Married
Single
Divorced
Widow
Widower
SECTION B: To determine the effect of mobile money tax to the Airtel Company.
Please evaluate the following statements by ticking under the appropriate figure basing on the
scale below:
Neither. Strongly Strongly
Questions Agree agree nor . Disagreeagree . disagree
disagreeEffect of mobile money tax tothe Airtel Company
Mobile Money provides reliablenetwork services to enhanceservice delivery processes?
Mobile Money provides availablecash to pay the subscribers as andwhen the need arise?
Mobile money reduces thedifficulties involved in searchingfor financial premises to transactany business?Mobile money Tax affects boththe customers and the mobilecompany at large?High mobile money tax chargedby the government reduces theprofits_of the_company.
50
SECTION C: To examine the effect of mobile money tax to the mobile money customers in
Kabalagala
Evaluate the following statement by circling the appropriate response basing on the scale below.
Please do not leave any item unanswered.
Code 1 2 3 4 5
Status Strongly Disagree Not Agree Strongly 1 2 3 4 5
disagree sure agree
A Effect of mobile money tax to the mobile
money customers
1. I withdraw frequently from the mobile money
services?
2. Mobile Money is a cheaper alternative for
transferring money quickly?
3. Mobile money reduces financial pains and
difficulties in making payment?
4. Mobile money provides a cashless method for
facilitating businesses?
5. With mobile money, the poor have a simple
and safe way to save money for future
healthcare costs?
51
SECTION D: To establish the effect of mobile money tax to mobile money Agents in
Kabalagala
Please evaluate the following statements by ticking under the appropriate figure basing on the
scale below:
Effect of mobile money tax to mobile Strongly Neither StronglyAgree Disagree
money Agents agree of all disagree
Questions to bank
Mobile money agents face the problem of
fraud by the their customers?
Mobile money tax affects the growth of
businesses for the agents?
Mobile money agents face the problem of
networklconnectivity problems?
Repeated purchased affect both the
customer and the operator of the mobile
money in reducing the sales volume?
The effect of mobile money tax is simply
shifted to the consumer by increasing their
charges.
52
APPENDIX II: BUDGET
Item Item Item Item
Subsistence 3 months 50,000 150,000
Allowance
Travel (Vehicle Hire) 3 months 100,000 300,000
Data Analysis 1 50,000 50,000
Secretarial Services 1 50,000 50,000
(Processing the
research instruments
and reports)
Photocopying 1 20,000 20,000
1 10,000 10,000
TOTAL 280,000 580,000
53
APPENDIX III: WORK PLAN AND TIMEFRAME
Activity Duration (days/weeks/months) Responsible
Locate Respondents Before 1 5th June 2019 Researcher
Designing Pretesting data Before 22nd June Researcher
collection tools
Data Collection Before 8th July Researcher
Data Coding Before 15th July Researcher
Data interpretation and Before 5th August Researcher
Reporting
Thank youfor your valuable time
54
KAMPALAINTERNATIONALUNIVERSITY
Ggaba Road, Kansanga* P0 BOX 20000 KampaLa, UgandaTeL: +256 777 295 599, Fax: +256 (0) 41 - 501 974E-maiL:mugumet~gmai1.COm,
30th /05/2019
Dear Sir/Madam,
COLLEGE OF ECONOMICS AND MANAGEMENTDEPARTMENT OF ACCOUNTING AND FINANCE
To whom it may concern
RE: INTRODUCTORY LEflER FOR KANSIIME HARRIET 1163-05014-06333
This is to introduce to you the above named student, who is a bonal9de studentof Kampala International University pursuing a Bachelor’s Degree in BusinessAdministration Accounting and Finance, Third year Second semester.
The purpose of this letter is to request you avail her with all the necessaryassistance regarding her research.
TOPIC: - EFFECTS MOBILE MONEY OPERATIONS IN MAKIN DYEDIVISION OF KAMAPALA
CASE STUDY: - AIRTEL KABALAGALA BRANCH
Any information shared with her from your organization shall be treated with
- r your positive response.
~;“RABONG AND FINANCE
‘ 077232334~
PMTS LIMITED
Airtel UgandaOffice of the Human Resource Officer,
Human Resource Officer P.O. Box. 4522,
0752200222 Kabalagala, Uganda.
E~rnajl:airte1kabbrafl.cOm.ug.0rg ~11QD~ ______________________________________https://www. brandsoftheworld. com/lo~o/azrtel-4
Friday 31st May 2019.
The Head of Department
Accounting and Finance,
K.I.U, Kampala.
ACCEPTANCE TO UNDERTAKE RESEARCH IN MAKINDYE DIVISION KAMPALA,
UGANDA; ALRTEL, KABALAGALA BRANCH.
This serves to inform you that Kansiime Harriet Reg. 1163-05014-06333 has been accepted to
undertake his research in Makindye Division Kampala, Uganda; Airtel, Kabalagala Branch on
the topic:
Effects of Mobile Money on Mobile Money operators in Makindye Division Kampala,
Uganda; A case study of Airtel, Kabalagala branch.
During her stay at Airtel, Kabalagala branch she will be required to abide by the rules and
regulations that govern this entity.
By copy of this letter the Senior Human Resource Officer is hereby requested to accord this
student the necessary attention she deserves.
Airtel, Kabalagala branch.
Sam
Cc.
Cc. File.