ABSTRACT This study examines the impact of the Microfinance on growth of the Small and Medium Entrepreneurs (SMEs) in Lira district. The specific objectives of this study are as follows; to determine at what extent accessibility of microfinance lead to increase the volume of gross sales of participants and to understand other factors enhancing SME’s growth. The study will use cross-sectional research design in which 150 SMEs will be used as a sample size: 75 clients from BRAC and 75 clients from centenary bank. Data will be collected using questionnaires, direct observations and documentary reviews. Descriptive statistical procedures including descriptive and frequency distributions from the database template will be used and then, running Linear Regression Model. The result findings revealed that most of the respondents who were engaged in micro enterprises were female. Indeed, they were also in the age of briskest and economical active individuals of mean age 31.2 years, and the majority of them had primary level of education. However, the statistical findings also revealed that the following null hypothesis are statistically significant under t-test at 0.05 level of significance; There is statistical significant on microfinance access on SMEs growth. While null hypothesis stated that there is statistical significant relationship between SMEs growth and start-up capital and the other which stated that there is no statistical significant that experience on SME activities improves SME’s growth which reveals that it is not statistically significant at t-statistic 0.05 level of significance.
TABLE OF CONTENTS
DECLARATION .1
DEDICATION ii
APPROVAL iii
ACKNOWLEDGMENTS iv
ABSTRACT v
LIST OF ABBREVIATIONS AND ACRONYMS vi
LIST OF TABLES x
LIST OF FIGURES xi
CHAPTER ONE 1
1.0 INTRODUCTION 1
1.1.Overview 1
1.2. Background of the Problem 1
1.2.1. An Overview of SMEs in Uganda 1
1.3. Problem Statement 2
1.4. Research Objectives 3
1.4.1. Overall Objective 3
1.4.2. Specific Objectives 3
1.5. Research Hypothesis 4
1.6. Significance of the Study 4
1.7 Limitations of the study 4
1.8. Organization of the Study 4
CHAPTER TWO 6
2.0 LITERATURE REVIEW 6
2.1.Overview 6
2.2. Theoretical Literature Review 6
2.2.1. Conceptual Definitions 6
2.2.1.1. Micro-finance 6
2.2.1.2. Small and Medium Enterprises 6
2.2.1.3 Contribution of SMEs to the Economy 7
2.2.1.4 Development in the Theory of SME 7
2.2.1.5.1 Passive Learning Model 7
2.2.1.5.2 Stochastic and Deterministic Approaches 7
2.3. Empirical Literature Review 8
2.3.1. Role of Microfinance on SMEs Growth 9
VII
2.3.2. Linkage between Microfinance and SME .11
2.5 Summary of Literature Review 12
CHAPTER THREE 13
RESEARCH METHODOLOGY 13
3.0 Introduction 13
3.1 Research Design 13
3.3. Population 13
3.4 Sample Design 13
3.5 Validity and Reliability 13
3.5.1 Validity 13
3.5.2 Reliability 14
3.6. Sampling Techniques 14
3.6.1. Cluster Sampling Technique 14
3.6.2. Data Collection Tools 14
3.6.2.1. Questionnaire 14
3.6.2.2. Interview 14
3.6.2.3. Documentary Review 15
3.7. Data Processing, Analysis and Presentation 15
3.8 Empirical Framework of SME Growth 15
3.8.1 Dependent Variable 15
3.8.2 Independent Variables 16
3.9. Empirical Model 17
CHAPTER FOUR 18
4.0 DATA ANALYSIS AND DISCUSSION 18
4.1 Overview 18
4.2. Socio-economic and Demographic Characteristics of the Respondents 18
4.2.1 Gender of Respondents 18
4.2.2 Mean Age of Respondents 19
4.2.3 Education Level of Respondents 19
4.2.4 Source of Initial Capital of the SME 20
4.2.5 Client’s Start-up Capital 21
4.2.6 Amount of Loan Accessed 21
4.2.7 Number of Years in Business 22
4.2.8 The Business Type Operated by Respondents 22
4.3 Model Estimation 23
VIII
4.4 Multiple Regression Analysis Results 24
4.4.1 To Determine at What Extent Accessibility of Microfinance Lead to Increase the Volume of
Gross Sales of Pa~icipant 25
4.4.2 To Examine Other Factors Enhancing SME’s Growth 26
4.5 Summary of Chapter Four 28
CHAPTER FIVE 29
5,0 CONCLUSIONS AND RECOMMENDATIONS 29
5.1 Overview 29
5.2 Conclusion 29
5.3. Policy Implications 29
5.4. Area for Fu~her Studies 30
REFERENCES 31
APPENDIX I: PROPOSED BUDGET 34
APPENDIX II 35
QUESTIONNAIRE
SECTION A: BACKGROUND 35
SECTION B: GROWTH
