The Effect of Microfinance Institution Serviceson the Growth of Small and Medium Enterprises in Uganda Case Study of Ugafode Microfinance Uganda

Abstract

This study was about The effect of Microfinance Institution Services on the Growth of Small Medium Enterprises in Uganda, case study of UGAFODE microfinance limited and it intended to achieve the following objectives; To identify the effect of accessibility of loan services on the growth of SMEs, identify the effect of savings services on the growth of SMEs, assess the effect of non-financial services on the growth of SMEs and assess the effect of social intermediation on the growth of SMEs.

The research methodology adopted both descriptive and analytical research design based on semi-structured questionnaires to obtain an in-depth understanding of microfinance institution services and growth of small medium enterprises. Sample sizes of 80 respondents were randomly selected based on easy of access to them. The researcher used basically self administered questionnaires as the instrument for data collection. Data was collected from both primary with the help of questionnaires designed using likert scales and secondary data got from textbooks, internet, journals and newspaper articles.

The study revealed that microfinance services are important for the growth of SMEs through provision of loan services and savings for the growth of SMEs basing on the findings from the field, those the statistics show no significance between the services and the growth of SMEs.

UGAFODE microfinance services should put more emphasis on training its clients on how to productively use the borrowed money. In addition to this, it should listen to client’s grievances in order to efficiently serve their interests and so achieve its target goals. The above measures if taken into consideration will strengthen the effectiveness of microfinance institution services towards achieving the set objectives and enhance growth of SMEs.

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