Effect of microcredit on household welfare in Uganda: a case study of Kanyanya
MetadataShow full item record
The study's main objective was to examine the effect of microfinance on the household welfare in Kanyanya. The study was based on three specific objectives that is; to Evaluate the accessibility of Microfinance Services in Kanyanya, to identify the purpose of microcredit among Kanyanya residents and to Identify Challenges hindering Loan access from Microfinance Institutions The study employed primary data, which was collected using a questionnaire, and both quantitative and qualitative data were collected. The sample size of 60 was estimated using a formula for Cochran, and then simple random sampling was employed during data collection around the areas of Kakungulu, Kiyanja, Kitabuza, Kikubo. This data was coded, cleaned and analyzed using STATA software. The results of the study revealed that 49 of the respondents have ever acquired services from microfinance, and the majority of the respondents who had ever received these services also agree that the services have improved their living conditions in one way or another. Also, of the respondents who receive services from microfinance, the majority get loans, and they also agreed that these loans do improve their household welfare. The study revealed that, most households used the loans acquired to open up businesses. The study established a strong relationship between acquiring services from microfinance and improvement in the household welfare using cross-tabulation. Some of the challenges majorly highlighted in loan acquisition from MFIs microfinance included lack of collateral security and high bureaucracy costs, among others. In conclusion, microfinance should open up more branches to bring their services closer to the people. They should also reduce the collateral they ask for, especially from poor people, to allow them to access loans from these institutions to improve their living conditions.