Effects of Microfinance Institutions Services on The Financial Performance of The Small and Medium Enterprises in Uganda: A Case Study of Hoima Municipality Hoima District
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Date
2019-10
Authors
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Journal ISSN
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Publisher
Kampala International University, College of Economics and Management.
Abstract
The aim of this study was to establish the effect of microfinance institutions services
on the financial performance of Small and Medium Enterprises in Hoima
municipality. The objectives were to find out the various services offered by Micro
Finance Institutions to Small and Medium Enterprises in Hoima municipality, to find
out the overall effects of Microfinance Institutions Services on the Financial
Performance of Small and Medium Enterprises in Hoima municipality and to find out
ways on which Micro Finance Institutions can enhance the growth of Small and
Medium Enterprises in Hoima municipality. The study found out that loans and credit
finance was the highest service received from Microfinance institutions by the SMEs,
the second being savings of their earnings and the least being business advice and
training. The study also found that MFI financial training have improved the SME
Basic business skills, improved the SMEs capital investment decision making,
improved business risk management, enabled the SMEs to become economic agents
of change, has enhanced development of smaller SMEs into bigger businesses, have
contributed in fueling growth of Small and Medium Enterprise, have contributed in
fueling stability of the SMEs, has led to motivation for enhancement of earnings from
the ongoing activities, savings allowed by MFI has enable SME to make a greater
contribution to household income, the overall increase in savings have improved on
the financial performance of the Small and Medium Enterprises, Access to MFI loan
services have contributed to improvement of the Small and Medium Enterprises
financial performance. The study further found out that the overall effect of
microfinance institutions services on the financial performance of Small Medium
Enterprises were positive. The study also found out that that the best Ways in which
Micro Finance Institutions can enhance growth of Small and Medium Enterprises was
through advancing soft loans, through research into profitable business ventures and
only offering loans in those areas that will attract more profit, MFI should adopt and
implement micro finance Group model, increase provisions of non-financial services
for Small and Medium Enterprises and to venture into educating and awareness
building among the SMEs to enhance knowledge.
Description
Research Report Submitted to The College of Economics and Management in Partial Fulfillment for The Requirement of An Award of Bachelor of Business Administration of Kampala International University
Keywords
Micro finance Institutions, Financial Performance