Ian Investigation Into the Effects of Micro Finance Institutions on the Socio-Economic Wellbeing of Business Communities, a Case Study of Real People Financial Services in Goma Subcounty
Year: 2017
Author: NAKAJUBI FAUSTINE LWANGA
Supervisor:
Abstract
The purpose of the study was to investigate the effects of Real People Financial Services (RPFS) on the socio-economic wellbeing of the business community in Goma Sub-County. The objectives are to examine the objectives of Real People Financial Services in Goma Sub County. To examine the nature of contribution towards the wellbeing of the business communities in Goma Sub county. To find out the effects of services of RPFS on the economic wellbeing of the business community in Goma Sub County and finally to findout the effects of services of RPFS on the social wellbeing of the business community in Goma Sub county.
The research design was based on a descriptive and case study design and analysis of the data on a sample size of 70 respondents’ selected using random sampling technique. Data was collected by use questionnaires, the interview guide and focus group discussion. It was computed and analyzed using statistical packages for social sciences.
The findings established that the major contribution of RPFS towards the business community was the provision of loans that are used to start new business or improve existing businesses. It was also established that the loans obtained are used to buy assets to help people improve on their socioeconomic wellbeing. The study established that RPFS had helped the business community to attain a real change in their lives as compared to themselves before they started using MFI services. It also established that through account opening and saving with RPFS, their economic status got improved. Through MFIs services people can educate their children, pay medical bills and acquire assets, portfolio investment and capital accumulation. MFIs have assisted members to buy or improve means of transport (bicycle, motorcycle, car.), acquire domestic animals (cow, goat, pig, sheep), acquire new or improve existing shelter, acquire pieces of land or better use of the existing land. The study showed that RPFS services such as credit and financial education have positive contribution to their members’ socioeconomic wellbeing by helping them acquire loans for different purposes like restocking of businesses, accessing machinery, like Opato Patrick purchased computers to run an internet café in Banda. Abella &Alvin milling company located in Seeta Bukerere road purchased a milling machine to grow her sales.
The study recommended that MFIs should reduce on the interest rates charged in order to increase sustainability and wellbeing of the business community in Goma sub-county. To find solutions to challenges that prevent people from accessing loans by encouraging them to start up group lending methodology where members of a group guarantee themselves and get loan without collaterals or by accepting as many kind of collaterals as possible.
The study also recommends that clients should be given enough time to enable them pay installments that they can manage and in time other than choosing for them a period of repayment. Example Mr Mafumi of Nantabulirirwa defaulted because he was given little time for repayment.There should thorough training before using the money. This can be in form of guidance and mentoring. The institution on this note can employ the pioneers of the company to speak to the rest as they expand the market. This helps to lower both impairments and defaults in paying back the institution.
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