An Assessment of Small Credit Finance to Poverty Alleviation in the Rural Society of Uganda: A Case Study of NAMA SACCO Members Mukono District

Abstract

The study was carried out in Mukono District, Central region, with the aim of assessing the contribution of small credit to poverty reduction in the rural society of Uganda. The study was based on the fact that Microfinance has proved to be an effective and powerful tool for poverty reduction. The researcher interviewed 93 Nama Sacco Clients and the management to see the Impact assessment of small credit finance to poverty alleviation in Mukono District. The main objective of the study was to examine and assess the impact of micro-finance in poverty alleviation. A case study design was adopted to get the required in-depth data for a small unit. Probability and non-probability sampling techniques were applied. Interviews, questionnaires and documentary reviews methods were adopted for the purpose of collecting the required data. The data collected were analyzed using descriptive statistics such as frequency tables, graphs, charts and percentages. Sacco provided access to credit facilities. Loans secured from Sacco contributed towards poverty reduction. Poverty reduction was manifested through a number of ways, such as opening up new investments, expanding existing investments, ability to pay school fees and higher learning institutions‟ fees , and paying for health services. It is recommended that, interest rate, application period, insurance fund, and minimum cash deposit seem to be clients‟ constraining factors, some changes should be made. The Interest rate should be reduced to at most 15% compared to the current interest rate of 19% and repayment period should reflect individual client‟s business Nama Sacco should insist much on group guarantee system rather than cash deposits to the micro-credits clients