The Contribution of Microfinance Institutions on the Performance of Small Scale Enterprises in Uganda Case Study: Customers of Finca Uganda Limited Ntinda Branch

Abstract

This study examines the role of microfinance institutions on the performance of small scale enterprises in Uganda. This report is built on various objectives and they include: to determine the contribution of training in the performance of small scale enterprises, to establish the contribution of loans on the performance of small scale enterprises in Uganda, and to identify the role of interest rates on the performance of small scale enterprises in Finca Uganda Limited. It is based on various methods of data collection and these include; questionnaires and documentary review. The study was based on the case study design a quantitative approach was used.

The findings of the study indicated that training improves the performance of small scale enterprises since it provides customer loyalty and customer care through team building, acquisition of new skills, improvement in efficiency, proper utilization of resources and hence all these lead to high returns on investments and high profits. The findings continue to show the contribution of loans on the performance of SSEs in Uganda and this is attributed to the fact that loans increase on the capital base since they have increased returns on investment hence maximizing sales in SSEs and finally the findings show the contribution of interest rates on the performance of SSEs in Finca Uganda Limited where most of the respondents argued that there are high interest rates charged and in this case the high returns on profits are not realised.

The study yielded the following recommendations; establishing affordable interest rates, Micro Finance providers should provide training in addition to Micro Finance services and GOU should assess the activities of MFIs

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