The effects of microfinance loans on low income households in Kashari County

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Kampala International University, College of Economics and Management
This study intended to show the effects of Microfinance loans on low income households. It was one in Kashari County, Mbarara, Uganda. The study aimed at finding out how the microfinance institutions have performed in extending and providing loans service to the rural population. A umber of microfinance institutions have sprung to provide the needed service to improve the usiness of beneficiaries. fowever, their growth period recovery is short and of high interest rate This unable ineffective use of the loans by low income households putting the standard of living at stand still This trend of persistent low standards of living in Kashari County is the basis of this research. the study the objectives of the study included the following; to establish the nature of loans given by nicrofinance, to find out the loan policies in microfinance institutions in and to establish the relationship between microfinance loans and the standard of living of low income households in Kashari County. rhe study employed a across-sectional research design (Ranjit 1996: 81) which includes both survey and ethnographic methods. Using this research design, data will be collected from more than one respondent in Kashari County at a single point in time. The design enabled the research to examine the diversity within the rural and urban credit users. It further enabled the research to triangulate between the quantitative survey questionnaires and the qualitative FGDs and key informants interviews. The findings of the study revealed that MFis and MF loans have plans to improve beyond areas of Bwizibwera, Rubindi and cover more rural areas like Kagongi, Rwanyamahembe, Bubaale subcounties and others. The researcher also found out that some people got the loan but did nothing that could bring in development, for instance some used it for gambling. Recommendations were given and this included; it should establish infonnation and advisory centers to train low income households in their various business. Apart from recommendations got as a result of the study, they should also carry seminars or workshops to educate people on the importance of acquiring loans and how they can use it effectively for personal development.
A research dissertation submitted to the college of Economics and management sciences in partial fulfilment of requirements for the a ward of a Bachelor's Degree in business administration (banking and finance) of Kampala International University
Microfinance loans, Low income households