Credit Access and Financial Performance Small and Medium Enterprises in Ntungamo District: A Case Study of Kajara SACCO, Rwashamaire Branch.
The purpose of the study was to establish the relationship between credit access and financial performance of SMEs in Ntungamo District. The study was guided by the following objectives; to establish relationship between credit terms and financial performance of SMEs in Ntungamo District, to establish the effect of credit terms and access to credit on financial performance of SMEs in NtungamoDistrictand to establish the relationship between access to credit and financial performance of SMEs in Ntungamo District. The study was based on a correlation survey design. Primary data was collected using self-administered questionnaires issued to respondents who were owners/managers of the business. The sample size were 25 respondents (5 SACCO employees and 20 borrowers). The target population included credit officer and business borrowers of Kajara SACCO in Rwashamaire Town. The researcher used simple random sampling technique for the borrowers as this technique gave borrowers equal chances of engaging into the study, systematic sampling was used to select employees of Kajara SACCO. Primary data was obtained through the use of self-administered questionnaire to respondents following systematic and established academic procedures. Secondary data was obtained through the already existing bank's literature and any other literature from Kajara SACCO Financial annual reports, credit performance reports, Bank of Uganda Reports and journal articles. Data was collected from the primary source was compiled, sorted, edited for accuracy and clarity. The research findings showed that firms can easily get credit from Microfinance institutions, access of loan can help in growth of firm's business, their firms often fail to get enough loans they require from microfinance institutions, access to loans have helped in the growth of their business and the respondents also asserted that the length relationship between this firm and suppliers of credit is important in accessing credit. The research findings on the effect of credit terms on financial performance showed that 52% firm can afford the interest rates charged by microfinance institutions, 72% disagreed that loan repayment period given to this firm is convenient, 68% agreed that the interest rates paid remain fixed for the whole repayment period, 80% of the respondents agreed that the firms have sufficient collateral to enable them acquire credit from microfinance institutions while 92% agreed that presence of collateralizable assets in this firm helps in business growth. In order to improve access to credit by SMEs, commercial banks and other lending institutions need to adjust credit terms in line with what borrowers can afford.
Akakunda, Shivan (2023). Credit Access and Financial Performance Small and Medium Enterprises in Ntungamo District: A Case Study of Kajara SACCO, Rwashamaire Branch. Kabale: Kabale University.