The Contribution of Micro Finance Institutions on the Standard of Living of People in Uganda a Case Study of Luwero District

Abstract

The study on the Contribution of Micro finance institution (MFIs) on the standards of living of the beneficiaries was conducted in Luwero District, Wobulenzi town. It investigated the contribution of micro-saving services on the standard of living, the effect of micro-credit services on the standard of living, the effect of training services on the standard of living. Both qualitative and quantitative research approaches were used to carry out the study. Data was collected using questionnaires and interview guide. The data collected were analyzed using the statistical package for social science version 16.0 and findings revealed that there was positive relationship between micro saving and standards of living as indicated by the correlation coefficient value of r=0.22, positive relationship between micro credit services and standards of living as indicated by the correlation coefficient of r=0.214 and also positive and significant relationship between micro training services and standards of living as revealed by the correlation coefficient figure of r=0.970. The study therefore, concludes that there is a positive and significant relationship between the micro finance institutions and the standards of living.

The study recommends identifying the training needs of the borrowers so that appropriate training shall be given to the client on how to use the loan funds as avoid the cases of gambling the borrowed fund, regarding the issue of high interest rate charged by the micro finance it was recommended that there should be policy of mandatory publication of the interest rate and related charges. This will address the issue of unregulated micro finance over charging their customers, the study also recommend that the MFIs to review their policies, procedures and products to make them more gender responsive to enhance the participation of both men and women in the micro finance services for effective alleviation of poverty and improving standards of living.

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