Internal Control Systems and Performance of Microfinance Institutions in Uganda: A Case Study of Kabale Municipality
This study investigated the relationship between internal control systems and performance of microfinance institutions in Kabale Municipality, South Western Uganda. The study was guided by specific objectives, that is, to examine the effect of control environment on performance of microfinance institutions; to examine the effect of risk assessment on performance of microfinance institutions; investigate the effect of monitoring activities on performance of microfinance institutions; and, to assess the effect of communication on performance of microfinance institutions in Kabale Municipality. The study employed a cross sectional survey design to explore information from different stakeholders in selected microfinance institutions at a given point in time. A sample size of 111 respondents was considered for the study, selected by simple random sampling and purposive sampling techniques. Data were collected through primary sources using structured questionnaires and interviews. Statistical Package for social Scientists, SPSS, Ver. 23 was used to analyse the data, and findings were presented in tables and charts. Findings revealed that risk assessment significantly affect performance of microfinance institutions in Kabale Municipality. However, control environment, monitoring activities and communication had an insignificant effect of performance of microfinance institutions. Only risk assessment significantly influences performance of these institutions. Generally, internal control system as a function affected performance of microfinance by 15 percent. In due regard, the study recommends that risk assessment be reinforced so as to continuously performance in microfinance institutions in Kabale Municipality. More so, other factors that have a strong bearing on the performance of MFIs need to be explored by future research.
A Research Dissertation Submitted in Partial Fulfilment of the Requirements for the Award of A Master’s Degree in Business Administration of Kabale University
Internal Control Systems , Performance,Microfinance, Institutions