Contingency planning and the performance of money remittance companies in Kampala

Abstract

The study sought to establish the effect contingency planning has on the performance of money remittance companies in Kampala. The study objectives were: to examine the effect of risk detection on the performance of money remittance companies in Kampala, to examine the effect of contingency strategies on the performance of money remittance companies in Kampala and to examine the effect of recovery strategies on the performance of money remittance companies in Kampala. The study used a cross-sectional study design where both qualitative and quantitative approaches were used to obtain in depth information from the target respondents. The target population was 66 money remittance companies with a sample size of 56 in Kampala Central Division. Stratified sampling as one of the probability sampling methods was used to select the respondents from each of the 56 remittance companies. Study findings revealed that risk detection and contingency strategies had a significant positive effect on the performance of money remittance companies (r=.535** and r=.501**, respectively). The study further revealed that recovery strategies had a moderate positive effect on the performance of money remittance companies (r=.423**). Findings indicated that contingency planning predicted 32.9% variation in the performance of money remittance companies while the other 67.1% variation in performance of money remittance companies was due to other factors not considered in this study. This implied that contingency planning is not the only predictor of performance in the money remittance companies. Other studies, therefore, should be carried out to explain other variables not included in this study. It was recommended that; money remittance companies should strengthen their risk detection methods and contingency strategies as these significantly affect their performance, money remittance companies should ensure that the risk detection process and contingency strategies are continuously reviewed to keep up with the ever changing business environment and Bank of Uganda should review the laws governing the money remittance sector to make them less restrictive to new methods of carrying out money remittance business.