Factors affecting the financial business operations and performance of money lenders in cities, taking money lending business in Kampala city as the case study

Abstract

Due to the increased emerging of many money lending businesses in Kampala city, therefore, the purpose of the study was to examine factors affecting the business operations and performance of money lending business in cities with Money lenders in Kampala city as the case study. The objectives of the study were: to assess the effect of governance mechanisms on the performance of money lending business in Kampala city, to establish the effect of management information systems on the performance of money lending business in Kampala city and to find out the extent to which Board funding affects the performance of money lending business in Kampala city. The data used was primary data and the data measurement methods used were univariate and bivariate methods like chi-square and regression analysis. The study sample size was 48 and the findings showed that 79.2% of the respondents agreed that management was effective in moving the institution forward, 70.8% reckoned that the remuneration for management didn’t match their responsibilities. Above all the findings showed that there’s a positive relationship between governance mechanisms and money lending performance. The findings also showed there’s a relationship between MIS and money lending business financial performance as it was showed after a chi square test of p value of 0.031. the findings also showed that there’s no positive relationship between Board funding and money lending business performance and it was discovered after a chi square test indicated a p value of 0.15 which is larger than 0.005 level of significance, The drew conclusions showed that governance mechanisms greatly affected the performance of money lending business as they determine the direction of MFI, MIS in its state had a high impact on the performance of money lending business in Kampala city. And that Board funding was not a critical success factor for moneylending business performance as compared to other factors. The study recommends that the selection of the board should be to a large extent based on ones’ professional experience, management should always be remunerated in accordance to their specific responsibilities, the MIS in use should be upgraded to enable linkage across the branches and the head office as it enables improved book keeping, the money lending business should always look at the branch portfolio before adding funding or reducing funding at specific branches of the companies.