MJAAR

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

Asiimwe Isaac Kazaara, Musimenta Nancy


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
Metropolitan Journal of Academic and Applied Research

Cite This Article

Asiimwe Isaac Kazaara & Musimenta Nancy (2026). Interconnected Voids: Internet Accessibility and Digital Credit as Compensatory Systems in Uganda's Digital Economy. Metropolitan Journal of Academic and Applied Research, 5(4). https://journals.miu.ac.ug/pages/article.php?article_id=380

More in This Issue

View full issue →
6
Duopolistic Compensation: A Comparative Analysis of MTN and Airtel Digital Credit Portfolios in Uganda's Expanding Borrower Market
Dr. Arinaitwe Julius1 , Asiimwe Isaac Kazaara2
digital credit mobile money MTN MoMo Airtel Okoa
7
ESG Disclosure, Performance And Competitive Advantage In Financial Service Firms In Nigeria
Omowunmi Jumoke Ogunleye,Akingbade Abdulbasit Abiola,Ismaila Aderemi Bello
ESG disclosure firm performance competitive advantage financial services
8
From Deathtraps to Nourishment: Adapting Japan’s School Lunch Model as a Compensatory System for Uganda’s Child Nutrition Crisis
Dr. Arinaitwe Julius1 , Musimenta Nancy2
School feeding Japan Kyushoku model child malnutrition Uganda
9
From Technical Tool to Leadership Imperative: Managing Artificial Intelligence in Contemporary Organizations and Implications for Advanced Business Education
Dr. Arinaitwe Julius1 , Asiimwe Isaac Kazaara2
Artificial Intelligence Leadership Organizational Management Business Education
10
From Working Hard to Working Smart: Assessing Uganda’s Environmental Readiness for the Changing Nature of Work
Dr. Arinaitwe Julius1 , Ahumuza Audrey2
Smart work digital readiness Uganda workforce skills