The role of micro finance institutions towards the eradication of poverty in Uganda: Case study Micro Uganda Kayunga branch.

Abstract

The study aimed at assessing the role of Micro Finance institutions towards the eradication of poverty in Uganda, case study being Micro Uganda Kayunga branch. The study was mainly looking at Micro Finance and eradication of poverty and how Kayunga district in particular has improved due to the presence of a Micro Finance institution and if the services provided have helped the people of Kayunga rise above the poverty level. The researcher used a cross sectional research design with both qualitative and quantitative methods with a population study of 281people out of which a sample size of 166 clients and employees of the Micro Uganda was chosen. Using simple random sampling respondents were chosen from the area and these were clients and employees of the Micro Uganda. Both questionnaires and interview guides were used to collect data from the selected respondents. Both the primary and secondary data was used during collection of data. Data was collected by use of questionnaires, interview guides and analyzed in form of tables, graphs and pie charts. Findings revealed that savings made by these people mainly through the method of community based savings schemes helped the people in the area be able to save and accumulate enough money to start up small business that could bring in income and also improve their saving patterns and help them access their funds any time they wanted. Micro credit provided by Micro Uganda improves people’s standards of living because through these people are able to create jobs and provide for their families. Despite that these credit schemes cannot provide enough revenue to the clients because of the time frame taken by people to get those loans and because there is no security set against the loans. Therefore, the loans are given to only trustworthy clients who they know will be able to pay back the loans and this leaves the rest unattended to. Micro Uganda should introduce training facilities to their clients because this would help the clients to participate in the other services being offered like group loans and also improve on their knowledge about other services like saving patterns and various others provided by them. They should also introduce new saving packages like long term savings for their customers who are not in a hurry to use their money. Finally Micro Uganda should reduce the time lag attached with micro credit (loans); this will help the clients generate meaningful revenue to those clients who attain loans if given in time.