Abstract

This study investigates the major barriers to effective financial inclusion through microfinance from both policy and practice perspectives. A cross-sectional quantitative survey design was adopted. Primary data were collected from 80 microfinance professionals using a structured questionnaire. Two independent variables were examined: policy and institutional barriers and service delivery and client-related barriers. The dependent variable was the perceived effectiveness of financial inclusion through microfinance. Descriptive statistics, reliability analysis, correlation analysis and multiple regression analysis were employed. The mean score for policy and institutional barriers was 3.78 (SD = 0.64), while service delivery and client-related barriers recorded a higher mean of 4.02 (SD = 0.56). The perceived effectiveness of financial inclusion showed a mean value of 3.21 (SD = 0.67). The measurement scales demonstrated acceptable reliability, with Cronbach’s alpha values of 0.81 for policy and institutional barriers, 0.83 for service delivery and client-related barriers and 0.80 for financial inclusion effectiveness. Correlation analysis indicated significant negative relationships between policy and institutional barriers and effectiveness (r = –0.39, p < 0.01) and between service delivery and client-related barriers and effectiveness (r = –0.54, p < 0.01). Regression results further confirmed that both policy and institutional barriers (β = –0.28, p = 0.014) and service delivery and client-related barriers (β = –0.46, p < 0.001) significantly reduce the effectiveness of financial inclusion through microfinance, with the latter exerting a stronger influence. The study concludes that client- and delivery-focused barriers constitute the most critical constraints to achieving effective financial inclusion through microfinance, underscoring the need for client-centric programme design alongside supportive policy frameworks.