The Effect of Interest Rate on the Profit Ability of Microfinance Institutions in Rubanda District: A Case Study of Kihanga Mparo SACCO Hamurwa Branch.
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Date
2022
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Kabale University
Abstract
The study focused on the findings of the effect of interest rates on the profitability of Microfinance Institutions in the Rubanda District. A case study of Kihanga Mparo SACCO Hamurwa Branch. The objectives of the study were to establish the various types of interest rates charged by MFls in Mparo Kihanga SACCO Hamurwa branch Rubanda District; to establish the level of profitability of Microfinance Institution in Mparo Kihanga SACCO Harnurwa branch Rubanda District, and to assess the relationship between interest rates and profitability of microfinance institution in Mparo Kihanga SACCO Hamurwa branch Rubanda District.
There was a critical review of the issues that have been explored and studied both theoretically and empirically in the existing literature on of interest rate as an independent variable and profitability of Microfinance Institutions as the dependent variable and the methods of data collection were put into action. The research used both qualitative and quantitative methods of data collection and analysis. The research used simple random sampling techniques in collecting and analyzing data and was used to provide equal chances to the sample size. Purposive sampling was also used to collect data from respondents who participated in the study. Findings of the study were obtained from the field interpreting the results analyzing based on the specific objectives of the study.
It is recommended that the government should promote group loans owned and managed by women because experience across different developed markets has shown that women have a better repayment record and yield a higher cross-sell ratio for financial institutions. SACCOs are recommended to adopt information and communication technologies in their businesses because the development of information and communication technology is central, not only for production but also for trade facilitation in both local and international markets. By all means, the government should strive to do everything possible to improve the Microfinance Institutions in which SACCO members operate by improving infrastructure, thus road networks, buildings, and communication technologies. The environments should be established in such a way that they promote or allow for new enterprises to emerge, existing ones to grow, and large and small enterprises to coexist by supporting one another.
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Amanya Anthony (2022). The Effect of Interest Rate on the Profit Ability of Microfinance Institutions in Rubanda District: A Case Study of Kihanga Mparo SACCO Hamurwa Branch. Kabale: Kabale University.