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Metropolitan Journal of Academic and Applied Research

Interconnected Voids: Internet Accessibility and Digital Credit as Compensatory Systems in Uganda's Digital Economy

Authors: Asiimwe Isaac Kazaara1 , Musimenta Nancy2

Journal: Metropolitan Journal of Academic and Applied Research (MJAAR)

Volume/Issue: Volume 5 - Issue 4

Published: 02 May 2026


Abstract

Uganda's rapid digital economy expansion has unfolded against a backdrop of persistent structural inequalities, creating bifurcated digital landscapes in which some segments of the population leverage converging technologies for financial empowerment while others remain excluded from fundamental connectivity. This study examined the intersecting roles of internet accessibility and digital credit adoption as compensatory systems within Uganda's digital economy, using a mixed-methods cross-sectional design administered to 500 purposively and randomly selected respondents across urban, peri-urban, and rural settings in Central, Eastern, Northern, and Western Uganda. Quantitative data were analysed through univariate descriptive statistics, bivariate chi-square tests, binary logistic regression, and a full Structural Equation Model (SEM) estimated in Stata 19 using the gsem command. Qualitative data from 24 key informant interviews were analysed thematically using an interpretive framework. Findings revealed that 62.8% of respondents used digital credit services, with strong geographic and socioeconomic gradients; high internet access was associated with a 4.66-fold increase in the odds of digital credit adoption (OR = 4.66; 95% CI: 3.27–6.64; p < 0.001). The SEM demonstrated good model fit (CFI = 0.951; RMSEA = 0.042) and confirmed that internet accessibility exerted the strongest direct structural influence on digital credit adoption (β = 0.481, p < 0.001), which in turn significantly predicted financial inclusion (β = 0.413, p < 0.001) and economic resilience (β = 0.368, p < 0.001) while reducing credit access barriers (β = −0.291, p < 0.01). Qualitative findings corroborated these patterns, with informants characterising digital credit platforms as compensatory lifelines bridging the void left by formal financial institutions in underserved communities. The study concluded that internet infrastructure and digital credit ecosystems operate as interdependent compensatory systems capable of producing meaningful financial inclusion when co-developed. Recommendations include prioritising last-mile internet infrastructure investment, integrating digital literacy into national curricula and financial education programmes, and instituting transparent regulatory frameworks governing digital lending to protect vulnerable borrowers.
Keywords

Internet accessibility, digital credit, financial inclusion, digital economy, Uganda, structural equation modelling, compensatory systems

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