Microfinance intervention and poverty reduction in Uganda: a case of Moroto district

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Date
2015-01
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Kampala International University, College of Economics and Management
Abstract
This study investigated the impact of microfinance intervention on poverty reduction in Moroto district. The following objectives guided the study: i) to examine the various microfinance services provided by MFls to the beneficiaries in Moroto district; ii) to establish the effects of microfinance interventions on poverty reduction among the beneficiaries in Moroto district; iii) to examine the relationship between microfinance services and poverty reduction in Moroto district. This study employed a descriptive survey design. A sample size of 108 respondents fi•om among microfinance beneficiaries was determined using Krejcie and Morgan table (1970 from a target population of !50 participants. The research instrument used was questionnaires while quantitative data was analyzed using SPSS data editor version 17.0. Pearson correlation coefficiency was used to determine the relationship between microfinance intervention and poverty reduction. The study established that between the two microfinance institutions surveyed in Moroto district, both of them had loans, savings and insurance as some of their services to their clients. Furthermore, the study findings revealed that microfinance intervention had to a lesser extent reduced poverty among the beneficiaries. In addition to that, there was a significant positive correlation between microfinance intervention and poverty reduction (1=.694, p>.032). The study concluded that loans, savings and insurance are components of micro finance and that microfinance services significantly in11uence poverty reduction. However it was argued that microfinance services are more effective when combined with entrepreneurial skills. Furthermore, microfinance intervention improved and increased income of the beneficiaries thus improving their housing facilities and having adequate food for consumption, however it did not stop them from being vulnerable to illness. The study recommended that there is need for microfinance institutions to put in place loan products that allow individual borrowing. This would encourage more borrowing since sometimes it is very difficulty to form groups to borrow a loan in rural areas among the illiterates. There is also need for the microfinance institutions to provide different types of loans that covers education loans so that the beneficiaries can educate their household members.
Description
A research dissertation submitted to the College of Economics and Management sciences in partial fulfillment for the requirements of the award of the Degree of Bachelor of Arts in Economics of Kampala International University
Keywords
Microfinance intervention, poverty reduction, Moroto district, Uganda
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