Loan recovery and credit policy in microfinance institutions. a case study: Finca, Buganda road branch, Kampala, Uganda
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Date
2006-07
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Kampala International University, College of Economics and Management
Abstract
The research was carried out to assess loan recovery and credit policy of clients of Micro Finance Institutions, with Foundation for International Community Assistance (Finca as a case study. The researcher decided to carry out this study because of reported decline in loan recovery of Finca's clients as a result of high interest rates charged on the loans. This study is therefore to investigate the credit policy of MFI' s. A survey research design was used in an effort to describe events and explain the relationship between loan recovery and credit policy of clients of MFI's. The respondents were selected using random sampling and the major instrument used for data collection was a questionnaire. The questionnaire was distributed to staff and clients of FIN CA. The findings showed 35 respondents representing 77.8% of the sample size. The socioDemographic characteristics of the respondents were investigated. Majority of the respondents were found to be female as compared to men counter patis. Any one can be offered a loan regardless of sex. Marital status was investigated it was found out that the married were more as compared to others. Majority of the respondents were between age brackets 31-40. Most of them had acquired loan from Finca. The education background showed that the majority had acquired formal education at least to primary level. However there was a problem in interpreting the questionnaires given to them. In conclusion, the findings confirmed that there is a positive correlation between credit policy and loan recovery of Finca. The study therefore recommended that in order to attain good performance of loan recovery will depend on the availability of good credit policy techniques applied.
Description
A research report submitted to Kampala International University College of Economics and Management in partial fulfillment of the requirement for the Award of Bachelor of Business Administration
Keywords
Loan recovery, Credit policy, Microfinance institutions, Kampala, Uganda