Impact of Pride Microfinance credit on the performance of small-scale business, medium-size and household welfare in Makindye Ssabagabo Municipality

Abstract

This report gives details of the analysis of the contribution of pride-microfinance to small-scale businesses, medium-size businesses and household welfare in Makindye Ssabagabo municipality, a sample of 116 clients of pride-microfinance was selected. The questionnaires were administered to the respondents and the outcome analyzed. The responses to the questionnaire were coded and then entered to Stata 15 version for analysis. The study revealed that 34.8% of the loans borrowed were not beneficial to the clients because of the high interest rates and unfavorable repayment terms of the loans (short repayment period, changing/unstable repayment periods). The study further revealed that 78.3% of the clients who had received loans claimed that the repayment terms were not favourable to them. In addition, it was revealed that in order to improve the loan performance, there is need to educate the borrowers as advised by 55.43%, re-investment of proceeds as advised by 38.04% and reduce interest rates as stated by 6.53%. All in all, most factors considered (education, employment status, sex and income activity) were found to be significant with loan benefit status while marital status was not significant with loan benefit status Among other things, the researcher recommends further research into this field to determine the effectiveness of microfinance institutions (pride microfinance in particular) in trickling down poverty levels in Uganda. The research further recommends that people should be encouraged to access loans and invest the money in business ventures other than activities such as paying school fees.