TABLE OF CONTENTS
DECLARATION ................................................................................................................................... i
AP PROV AL .......................................................................................................................................... ii
DEDICATION ..................................................................................................................................... iii
ACKNOWLEDGEMENT .................................................................................................................... iv
ABSTRACT ......................................................................................................................................... ix
CHAPTER ONE ................................................................................................................................... 1
1.1 Background of the Study ................................................................................................................. 1
1.2 Statement of the Problem ................................................................................................................ 2
1.3 Objectives of the Study ................................................................................................................... 3
1.4 Research Questions ......................................................................................................................... 3
1.5 Scope of the Study ........................................................................................................................... 3
1.5.1 Contents scope .............................................................................................................................. 3
1.5.2 Geographical Scope ..................................................................................................................... .4
1.5.3 Time Scope ................................................................................................................................... 4
1.6 Significance of the Study ................................................................................................................ 4
1.7 conceptual frame work .................................................................................................................... 5
CHAPTER TWO ................................................................................................................................... 7
LITERATURE REVIEW ...................................................................................................................... 7
Definition of Interest Rates ................................................................................................................... 7
Types of Interest Rates .......................................................................................................................... 7
Simple Interest. ...................................................................................................................................... 7
Composition of Interest Rates ............................................................................................................... 8
Nominal Interest .................................................................................................................................... 8
Market Interest Rates ............................................................................................................................. 9
Default Interest .................................................................................................................................... 10
Government Intervention .................................................................................................................... 10
Immediate Effects ................................................................................................................................ 11
Mid-term Effects ................................................................................................................................. 11
Longer-term Effects ............................................................................................................................ 11
Savings ................................................................................................................................................ 11
vi
Margins ................................................................................................................................................ 12
Uganda's current Interest Structure ..................................................................................................... 12
INFLATION (UGANDA) ................................................................................................................... 14
CHAPTER THREE ............................................................................................................................. 15
RESEARCH METHODOLOGY ........................................................................................................ 15
3. I Research Design ............................................................................................................................ 15
The researcher employed both qualitative and quantitative methods of data collection analysis, which
all enabled him to collect a wide range of information concerning interest rates and performance in
Nakumatt supermarket. ....................................................................................................................... 15
3.2 Target Population .......................................................................................................................... 15
3.3 Sample Size ................................................................................................................................... 15
3.4 Sampling Techniques .................................................................................................................... 16
3 .5. I Questionnaires ............................................................................................................................ 16
3 .5 .2 Interviews ................................................................................................................................... 16
3.6 Data Analysis ................................................................................................................................ 16
3.9 Limitation of the Study .................................................................................................................. 17
3. IO How to overcome the Limitations ............................................................................................... 17
CHAPTER FOUR ............................................................................................................................... 18
PRESENTATION, INTERPRETATION AND ANALYSIS OF DATA ........................................... 18
4.1 Findings on the demographic characteristics ofrespondents ........................................................ 18
4.2 Effects of interest rates on the performance ofNakumatt super market in Uganda ...................... 22
Different interest rates that have caused significant effects on the company ...................................... 23
4.4 The various measures that Nakumatt supermarket has put in consideration to mitigate the impact
of bank interest rates on the company ................................................................................................. 25
CHAPTER FIVE ................................................................................................................................. 26
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ....................................................... 26
5.2 Conclusions ................................................................................................................................... 27
5.3 Recommendations ......................................................................................................................... 27
5.5 Area for future researchers ............................................................................................................ 29
REFERENCES .................................................................................................................................... 30
APPENDICES ..................................................................................................................................... 32
APPENDIX I: RESEARCH INSTRUMENTS ................................................................................... 32
ABSTRACT The purpose of the study was to determine the impact of interest rates on the performance of business enterprises in Uganda, the case study ofNakumatt Supermarket, Kampala, Uganda. The studywas based on three objectives which are; I. To ascertain the effects of high interest rates on the performance of business enterprises in Uganda. II. To ascertain the effects oflow interest rates on the performance of business enterprises in Uganda. III. To determine the different types of interest rates that affect business enterprises. The researcher used purposive sampling to select the respondents from whom to obtain valid information about the study. This was through the issue of questionnaires and interview supplement tools while gathering the information. Findings of the study revealed that there are two major forms of interest rates which include highrates and low interest rates. Within these, others are embedded; they include nominalrates, real interest rates, market interest rates and default interest rates. However, from all above, market interest rates are most evident compared to others. Findings have revealed above interest rates (high interest rates) to have the following impact on the performance of enterprises: Speculative investments rather productive activities, skyrocketing prices and wages. More so, low interest rates have enhanced borrowing hence improved purchasing power of customers, and long-term plans and investments for enterprises. The researcher recommends that the central bank should curb high interest rates by increasing central bank rate which will help to reduce lending by commercial banks, hence curbing the level of liquid cash from the public and lowering down interest rates. Also, the company should invest in projects like research and development to develop innovations within the market. It should also carry out processes and procedures to evaluate their performance in different economic conditions and be able to speculate in the near future.
