Impact of microfinance products on the performance of small and medium enterprises a case study: SMEs in Makerere Kikoni

Abstract

The research was done with the purpose of evaluating the contribution of microfinance products on the performance of SMEs in Makerere Kikoni. The definition of both the independent variable and the dependent variable were discussed together with the description of the variables. Conceptual framework that reflected the variables whose relationships were studied was developed. The following were the objectives of the study: to investigate the effect of microloans, microwaving’s and money transfers on the performance of SMEs. A combination of cross sectional and descriptive research design was used applying both quantitative and qualitative techniques. The study population was 110 comprising of respondents from SMEs in Makerere Kikoni and simple random sampling was used in the study. The findings revealed that there is no statistically significant relationship between Microloans and money transfers on the performance of SMEs. The findings further revealed that there is a positive relationship between micro saving and performance of SMEs. It was concluded that contribution of microfinance products affect the ratio of performance of small scale businesses inform of profits earned from sale of stock, increased sales, increased stock as well as improvement on quality of existing products. It was recommended that the micro finance sector of Uganda should benchmark with other countries that have reported positive results concerning microloans and money transfer products and SME performance.