Microfinance and Financial Performance of Small and Medium Enterprises in Rukiga District: A Case Study of Muhanga Town Council Rukiga District.
Date
2024
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Kabale University
Abstract
The study investigated the impact of microfinance on the financial performance of small and medium enterprises (SMEs) in Muhanga Town Council, Rukiga district. Its objectives were to identify the types of microfinance services available to SMEs, assess the financial performance levels of SMEs, and examine the relationship between microfinance and SME financial performance. The research utilized a cross-sectional research design, employing questionnaires and interviews for data collection. To ensure methodological validity and reliability, the researcher developed data collection tools and obtained necessary permissions, including an introductory letter from Kabale University presented to the Town Clerk for data collection from SMEs. Questionnaires and interview schedules were refined based on feedback from the research supervisor before being administered. Data collection spanned one week, after which responses were collected, classified, coded, and prepared for analysis using tables. Data analysis involved sorting, inspecting, cleaning, and coding of both quantitative and qualitative data. Quantitative data from structured questionnaires were processed using coding and entry into computer software such as Microsoft Excel and SPSS for generating descriptive statistics like frequencies and percentages. SPSS was also used for inferential statistics. The study concluded that while microfinance services such as loans, savings, credit, leasing, insurance, and cash transfers are available to SMEs in Muhanga Town Council, they do not consistently lead to improved financial performance for small businesses. However, the research underscored the significant role of microfinance in enhancing SME financial performance in the region. Based on these findings, the study recommended that SME management engage in continuous consultation with other business entities to enhance their financial performance. Additionally, microfinance institutions were advised to consider reducing interest rates to incentivize more SMEs, particularly those in Muhanga Town Council, to access loans at lower costs, thereby potentially boosting business performance.
Description
Keywords
Microfinance, Financial Performance, SMEs, Rukiga District, Muhanga Town Council
Citation
Aturinda, Betas (2024). Microfinance and Financial Performance of Small and Medium Enterprises in Rukiga District: A Case Study of Muhanga Town Council Rukiga District. Kabale: Kabale University.