The effect of Microfinance Credit Management on the Performance of Medium and Small Scale Business. A case study of Microfinance Institutions.
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Date
2010-09
Authors
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Publisher
Kampala International University, College of Economics and Management Sciences .
Abstract
The research aimed at finding out more about two variables, that is, Microfinance Credit and
Performance of Medium and Small scale Businesses where the first objective of the study was to
examine the types of credit that MFI' S extend to SMEs.
In this circumstance the researcher established that MFI's basically have three types of credit, the
consumption loan, short-term loans, long-term loans which all incorporate the poverty lending
approach and the financial system approach.
SME's performance is generally measured in terms of financial sustainability which is mainly
achieved only when the returns on equity in SME's exceed the opportunity cost of the funds.
Also quality of services access to financial services and savings mobilization measures
performance. However, there is need for a proper implementation of credit management policies
in order to ensure optimum utilization of credit to enhance better performance of SME's through
credit.
Generally, there is a significant relationship that exists between MFI credit and SME's
performance which is mainly due to the sound MFI credit management policies that enhance
better credit performance like, credit standard, credit terms, loan amount and collection
procedures.
Among the recommendation and suggestions made were; training of staff advising SME's owner
and also recruiting credit expertise personnel for better credit management.
Description
A research report submitted to the School of Business and Management in Partial Fulfillment of the Requirements for the Award of Bachelors Degree in Business Administration of Kampala International University.
Keywords
Microfinance Institutions, Credit Management, Performance, Medium and Small Scale Business, Effect