TABLE OF CONTENTS
DECLARATION .......................................................................................................................... i
APPROVAL ................................................................................................................................ ii
DEDICATION ............................................................................................................................ iii
ACKNOWLEDGMENT ............................................................................................................ iv
TABLE OF CONTENTS .............................................................................................................. v
LIST OF TABLES ...................................................................................................................... xi
LIST OF FIGURES .................................................................................................................. xiii
LIST OF ACRONYMS ............................................................................................................ xiv
ABSTRACT .............................................................................................................................. xvi
CHAPTER ONE ......................................................................................................................... 1
INTRODUCTION ...................................................................................................................... 1
1.0 Introduction ............................................................................................................................. 1
1.1 Background of the study ......................................................................................................... 1
1.2 Proble1n staten1ent. .................................................................................................................. 3
1.3 Purpose of the study ................................................................................................................ 3
1.5 Research Questions ................................................................................................................. 4
1.6 Scope of the study ................................................................................................................... 4
1.6.1 Time scope ........................................................................................................................... 4
1.6.2 Geographical scope .............................................................................................................. 4
1.6.3 Subject scope ....................................................................................................................... 4
1.7 Significance of the study ......................................................................................................... 4
CHAPTER TWO ........................................................................................................................ 6
LITERATURE REVIEW .......................................................................................................... 6
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2.0 Introduction ............................................................................................................................. 6
2.1 Concept of microfinance institutions (MFI's) ........................................................................ 6
2.1.1 Status ofMFis in Uganda .................................................................................................... 7
2.1.2 Mode of Operation ofMFis ................................................................................................. 7
2.1.3 Micro Finance Institutions' products ................................................................................... 8
2.2 Microfinance loans ................................................................................................................. 9
2.2. I Interest rates ......................................................................................................................... 9
2.2.2. Repay1nent schedule ......................................................................................................... 1 0
2.2.3. Loan a1nount. .................................................................................................................... ! 0
2.2.4 Credit period or loan period ............................................................................................... ! 0
2.2.5 Collateral requirement ....................................................................................................... I 1
2.3 MFis Responsibilities ........................................................................................................... 11
2.3.1 Legibility criterion ............................................................................................................. 11
2.3.2 Methods of lending ............................................................................................................ 11
2.3.3. Loan appraisal ................................................................................................................... l2
2.3.4. Monitoring ........................................................................................................................ 13
2.3.5 Training .............................................................................................................................. l3
2.4 Small Scale Enterprises (SSEs) ............................................................................................ 14
2.4.1 Growth of Small Scale Enterprises in Uganda .................................................................. 15
2.4.2 The distribution of Small Scale Enterprises (SSEs ) .......................................................... 15
2.4.3 Performance ....................................................................................................................... 15
2.4.5 Medium enterprise financing in Uganda ............................................................................ 16
2.4.6 Relationship between micro finance loans and performance of medium enterprises ........ 17
2.5 Conclusion ............................................................................................................................ 18
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CHAPTER THREE .................................................................................................................. 20
METHODOLOGY ................................................................................................................... 20
3.0 Introduction ........................................................................................................................... 20
3.1 Research design .................................................................................................................... 20
3.2 Study population ................................................................................................................... 20
3.4 Sample size ........................................................................................................................... 21
3.5 Sampling procedure .............................................................................................................. 21
3.6 Data collection sources ......................................................................................................... 21
3.6.1 Prin1ary data sources .......................................................................................................... 21
3.7 Data collection methods and tools ........................................................................................ 22
3.7.1 Survey data collection method ........................................................................................... 22
3.7.2 Questionnaire tools ............................................................................................................ 22
3.8 Data processing, analysis, presentation and limitations ofthe study .................................... 22
3.8.1 Data processing .................................................................................................................. 22
3.8.2 Data analysis ...................................................................................................................... 22
3.8.3 Data presentation ............................................................................................................... 22
3.8.4 Limitations ofthe study ..................................................................................................... 23
CHAPTER FOUI~ ..................................................................................................................... 24
DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS ........ 24
4.0 Introduction ........................................................................................................................... 24
4.1 Demographic characteristics of Respondents ...................................................................... .24
4.1.1 What are the different forms ofloans provided by MFis? ................................................ 32
4.1.2 What is the repayment period of loans provided by MFis to medium enterprises? .......... 33
4.1.4 What is the extent the duration of a loan affecting its repayment? .................................... 35
4.1.5 What is the size of the loan provided by MF!s to medium enterprises? ............................ 36
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4.1.6 Are respondents are engaged in any type of business? ...................................................... 37
4.2.2 What the perception ofperformance level of medium enterprises? ................................. .40
4.2.3 What is the trend of performance of medium enterprises? ............................................... .41
4.2.4 Do respondents generate enough profits for repaying back the loan? .............................. .42
4.2.5 To what extent do the respondents generate enough profits to repay back the loan? ........ 43
4.3 OBJECTIVE 3 ...................................................................................................................... 44
4.3.2 What is the extent of the effect of microfinance loans on the performance of medium
enterprises? ................................................................................................................................. 45
4.3.3 Do sales revenues increase as a result of using a loan? .................................................... .46
4.3.4 Ifyes, in which range weekly? .......................................................................................... 47
4.3.5 What are the stipulations under which credit is granted? ................................................. .48
CHAPTER FIVE ...................................................................................................................... 49
SUMMARY OF FINDINGS, CONCLUSIONS, RECOMMENDATIONS AND AREAS
OF FURTHER STUDY ............................................................................................................ 49
5.0 Introduction ........................................................................................................................... 49
5 .I Summary of major findings ................................................................................................. .49
5.1.1 De1nographic characteristics .............................................................................................. 49
Objective 1 .................................................................................................................................. 49
5.2 To assess the nature ofmicrofinance loans to medium enterprises ...................................... 49
5.2.1 What are the different forms of loans provided by MFis? ................................................ 49
5.2.2 What is the repayment period of loans provided by MFis to medium enterprises? .......... 50
5.2.3 Does the duration of a loan affect its repayment? ............................................................ ,50
5.2.4 What is the extent ofthe duration ofthe loan affecting its repayment? ............................ 50
5.2.5 What is the size of the loan provided by MF!s to medium enterprises? ............................ 50
5.2.6 Are respondents engaged in any type of business? ............................................................ 50
