Microfinance Support and the Performance of Small and Medium Enterprises (SME) in lira city
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Date
2023
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Publisher
Lira University
Abstract
Background: The study examined the level of microfinance support on the growth of small and
medium enterprises in Lira City, Northern Uganda using a cross- sectioned research design
supported by quantitative method. The study used simple random sampling method to select 382
respondents who were the proprietors of SMEs in Lira City. The categories of SMEs included;
hotel managers, private school head teachers, fuel station managers, clinics and pharmacy
managers, and commercial officers. SME representatives were sampled proportionally from the
listed categories.
Methods: Data collected by administering questionnaires to the respondents. Data were analysed
using SPSS version 23 at three levels: univariate, bivariate and multivariate levels. Univariate
analysis used descriptive statistics including percentages, mean and standard deviation to describe
the detail of both dependent and independent variables. At multivariable level, multiple linear
regression model was used to determine the magnitude of the relationship of each of the three
variables with respect to performance.
Findings: The findings indicated that the key steps followed when accessing credits from MFIs
included loan application (98.43%), credit access (97.91%) and loan inquiry (96.86%). The key
challenges faced were lengthy procedure (99.62%), no financial institution nearby (69.35%) and
processing cost (65.13%). Finally, on effects of MFIs support on SME growth, age, statistically
significant.
Conclusion: In conclusion, most MFIs in Lira City follow the recompensated general procedures
during the loan processing. However, their borrowers face several challenges. Therefore, SME
growth in Lira City is affected by several factors, which policy will have to address. A deliberate
government policy needed through central bank to regulate the interest charged by MFIs to SMEs,
and relax collateral demand as well as repayment structure to improve borrowing.
Keywords: Microfinance Support, and Performance of Small and Medium Enterprises (SME)
Description
Keywords
Microfinance Support,, Performance of Small and Medium Enterprises (SME)
Citation
Ogwang, J. and Ejang, M. (2023). Microfinance Support and the Performance of Small and Medium Enterprises (SME) in lira city