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 DECLARATION I, 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 of mobile money tax to mobile money users in Uganda 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 of mobile 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 of iualitative and quantitative approaches those mobile money operators in Makindye division, 4irtel Uganda Kabbalagala. Simple random sampling and purposive sampling techniques were ised 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 money perators 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 ofMo bile money reduces financial pains and lifficulties 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 of mobile money to agents is that they face the problem ffraud 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 their ervices 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 was easonable to conclude that mobile money is increasingly becoming a critical part of the ation ‘s economy. It also serves as a source ofgovernment revenue and as such any tax imposed hould not inhibit or limit the development of the industry. As it is applied today, the tax remains mbiguous leading to points of revenue leakage however it does not appear to sign~Icantiy 7istort the industry. ~ecommnendation, Based on the findings made from this research study, the following ecommendations are therefore made: From the findings it is recommended that consultations etween 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

‘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 Dependent variables Mediating variables MOBILE MONEY SERVICES MOBILE MONEY ~- I [ IC I Mobile commerce (~Cash flow rnanagement~”~ ( o Buying products • Business growth and services o Credit management • Sales volume o Access to finance o Market expansion ~ (payables) o Customer

,~ o Debt management satisfaction Mobile payments o Repeated (receivables) e Peer to peer purchases • Peer to business

‘-~

;ource: Adopted and modified by (Paul Walela Wanyonyi & Bwisa, 2011)

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 literature In 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 N 1= 1 + N (e2)

N Ll+N~zWhere;

1= the required sample size the known population size the level of significance, which is fixed at 0.05

60

— 1 + 60(0.05)2 60 1 + 60 (0.0025) 60

— 1 + 0.195 5860

— 1.195

n = 50 [able : 3.1 Showing sample size 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.Olntroduction fhis 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 interpretation done with the help of tables, pie charts and narrative text as follows;

4.1 Response rate The 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 Percentage distributed

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

Response rate

Non Returned questionnaires ~ Returned questionnaires

Source: Primary Data 2019

4.1.1 Background Information Gender of the respondents Table: 4.2 Findings on the gender of respondents

Response Frequency Percentage Cumulative % Male 20 49 49 Female 21 51 100.0 Total 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.

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 Percentage Certificate 08 20 Diploma 17 41 Degree 13 32 Masters 02 5 None 01 2 Total 41 100 Source: 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 Series 1 20 10 0 ~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 Status The 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 36.6 Married 19 46.3 82.9 Widow/er 3 7.3 90.2 Separated /divorced 4 9.8 100.0 Total 41 100.0 Source: Primary Data 2019

Figure:4.5 Shows the distribution by Marital Status

50 45 40 35 30 25 E~ Series 1 20 I 15 ~ 10 5 ~ 0 Married Single Divorced Widow ~ 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 Total tax to the Airtel Agree Disagree Company F %F %F % F % F % F %

Mobile Money provides 18 44 15 37 02 5 03 7 03 7 41 100 reliable network services to enhance service delivery processes? Mobile Money provides 21 51 14 34 00 0 02 5 04 10 41 100 available cash to pay the subscribers as and when the need arise? Mobile money reduces 49 10 24 00 0 05 12 06 15 41 100 the difficulties involved in searching for financial premises to transact any business? 23 56 9 22 04 10 02 5 03 7 41 100 The high operational costs affect the profit of mobile money operators? 28 68 8 20 00 0 01 2 04 10 41 Taxes paid by mobile money operators reduce their 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.

Table: 4.8 showing the effect of mobile money tax to the mobile money customers ~ D~agree To~l the mobile money customers

I withdraw frequently from the mobile money services? Mobile Money is a cheaper alternative for transferring ~ückl~ Mobile money reduces financial pains and difficulties in makii Mobile money provides a cashless method for facilitating businesses? With mobile money, the poor have a simple and safe way to save money for future healthcare costs?

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 Kabalagala The 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 Total to 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 41 100 the problem of fraud by the customers?

Mobile money tax affects the 24 58 11 27 00 0 02 5 04 10 41 100 growth of businesses for the agents?

Mobile money agents face 20 49 10 24 00 0 05 12 06 15 41 100 the problem of network/connectivity problems?

Repeated purchased affect 24 58 1 1 27 00 0 02 5 04 10 41 100 both the customer and the operator of the mobile money in reducing the sales volume?

The effect of mobile money 18 44 15 37 02 5 03 7 03 7 41 100 tax is simply shifted to the consumer by increasing their charges.

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 findings Taxation 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.

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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 LZ Diploma 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 . Disagree agree . disagree disagree Effect of mobile money tax to the Airtel Company Mobile Money provides reliable network services to enhance service delivery processes? Mobile Money provides available cash to pay the subscribers as and when the need arise? Mobile money reduces the difficulties involved in searching for financial premises to transact any business? Mobile money Tax affects both the customers and the mobile company at large? High mobile money tax charged by the government reduces the profits_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 Strongly Agree 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 Ggaba Road, Kansanga* P0 BOX 20000 KampaLa, Uganda KAMPALA TeL: +256 777 295 599, Fax: +256 (0) 41 - 501 974 INTERNATIONAL E-maiL:mugumet~gmai1.COm, UNIVERSITY

COLLEGE OF ECONOMICS AND MANAGEMENT DEPARTMENT OF ACCOUNTING AND FINANCE

30th /05/2019

To whom it may concern Dear Sir/Madam,

RE: INTRODUCTORY LEflER FOR KANSIIME HARRIET 1163-05014- 06333

This is to introduce to you the above named student, who is a bonal9de student of Kampala International University pursuing a Bachelor’s Degree in Business Administration Accounting and Finance, Third year Second semester.

The purpose of this letter is to request you avail her with all the necessary assistance regarding her research.

TOPIC: - EFFECTS MOBILE MONEY OPERATIONS IN MAKIN DYE DIVISION OF KAMAPALA

CASE STUDY: - AIRTEL KABALAGALA BRANCH

Any information shared with her from your organization shall be treated with

- r your positive response.

~;“RABO NG AND FINANCE ‘ 077232334~ Airtel Uganda PMTS LIMITED Office 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.

Sam

Cc. Airtel, Kabalagala branch.

Cc. File.