The effect of risk management practices on fraud prevention in mobile money businesses in Namagoma village
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Date
2026-04-17
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Uganda Christian University
Abstract
Mobile money operations are essential for financial inclusion in Uganda; however, their sustainability is persistently jeopardized by elevated instances of fraud. This study evaluated the impact of risk management practices on fraud prevention in mobile money enterprises, utilizing Namagoma as a case study. The research specifically investigated the impact of risk identification, risk analysis, risk mitigation strategies, and regulatory compliance. The research employed a descriptive design to examine the present circumstances. Primary data was gathered through structured questionnaires administered to a sample of 121 mobile money agents. The study achieved a response rate of 76.9%, resulting in 93 completed questionnaires. The data was subsequently analysed utilizing descriptive statistics within the Statistical Package for the Social Sciences. The findings indicated that risk identification facilitates the early detection of suspicious behaviour; however, numerous agents depend on informal peer learning instead of formal training. Risk analysis predominantly depends on insights gained from historical incidents instead of utilizing sophisticated digital tools. Although mitigation controls such as transaction monitoring are considered effective, agents often circumvent security protocols to expedite service for trusted clients, thereby creating vulnerabilities that may elevate fraud risk and compromise the overall efficacy of the risk management framework. Regulatory compliance, including compulsory SIM registration and Know-Your-Customer (KYC) regulations, serves as the foremost safeguard against fraud by eliminating anonymity in transactions. The study concluded that human behaviour and structural business challenges, such as low agent commissions, significantly undermine risk management practices. It is advised that service providers enforce compulsory formal training and reassess commission structures to alleviate the financial pressures that contribute to internal theft. Moreover, mobile money agents must rigorously comply with security protocols for all clients and prioritize fundamental physical security investments.
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Undergraduate