Budgeting and Performance of Financial Institutions: A Case Study of Lyamujungu SACCO in Kabale Municipality.

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Kabale University


The study aimed at the relationship between budgeting and performance of financial institutions. A case study of Lyamujungu Sacco in Kabale Municipality. Objectives guided the study, namely: to assess the effect of budgeting on resource allocation in microfinance institutions, to examine the effect of budgeting on profitability of microfinance institutions, and to assess the effect of budgeting on planning and control in microfinance institutions in Uganda. The researcher adopted a descriptive status research design to collect qualitative and quantitative data from 30 respondents. Data collection was done using questionnaires, and a documentary checklist and analysis were done. Results indicate that budgeting estimates, as realistic as possible, the cost of completing the objectives of the organization. Some respondents showed that budgeting helps in the expression of organizations' policies especially on how to acquire assets for the success of organizations, budgeting provides a means to monitor the project's financial activities over the life of the organization in that the budgeting process the SACCO has failed to monitor the performance of their clients hence affecting the performance of the financial institution. Budget in terms of revenues gives a bottom line for revenues to be met. Some respondents showed that budgeting enables projects to acquire extra money, and respondents gave their opinions that all budgetary control is a proven management tool. Some respondents showed that budgeting in business organizations is formally associated with the advent of industrial capitalism. The study concludes that there is a role played by budgeting in the performance of Lyamujungu Sacco whereby the findings showed that Lyamujungu Sacco practiced budgeting on whatever transaction they were making, it was therefore concluded that improved communication, budgeting, financial control of inputs, planning, and coordination were the roles played by budgeting, increased profits, reduces wastage of resources, were the other roles played by budgeting in MFIs.The study recommends that the employees should be encouraged to participate in the formulation of the budget so as to ensure participatory management that reduces resistance from employees. All the employees should be sensitized on the importance of budget in the organization so as to reduce the conflict between the organization's interests and stakeholders.



Budgeting, Performance, Financial Institutions, Lyamujungu SACCO, Kabale Municipality


Taremwa, Daniel (2024). Budgeting and Performance of Financial Institutions: A Case Study of Lyamujungu SACCO in Kabale Municipality. Kabale: Kabale University.