THE CONTRIBUTION OF MICROFINANCE TO THE GROWTH OF SMALL AND MEDIUM ENTERPRISES IN MBALE (case study Mbale industrial area (original) (raw)
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The Impact of Microfinance Service Delivery on the Growth of SME's in Uganda
2013
This paper arises from the study to establish the impact of microfinance services on the growth of Small and Medium Enterprises (SMEs) in eastern Uganda. This was done by; establishing whether MFIs service delivery led to growth of business capital, stock accumulation and growth of employment in SMEs. It further sought influence of socioeconomic characteristics on growth of SMEs and factors constraining access to MFIs services by SMEs. The Analysis used multiple regressions and the Logit models. The findings reveal that; first, there is a positive relationship between micro-credit and the growth of SMEs business capital and stock accumulation, secondly, the socio-economic characteristics like the location, gender of the owner, education levels, age of the business and default history of SMEs affected the growth of SMEs and lastly,
Background This study aimed at examining the relationship between loan access and financial performance of SMEs in Sembabule district; the relationship between microfinance lending terms and financial performance of Small and Medium Enterprises in Sembabule district, and the relationship between Microfinance loan sizes and financial performance of SMEs. Methodology The study used a descriptive, correlational and cross-sectional survey design. The study sample size was of 53 SMEs within the district to establish the relationship between the study variables and use self-administered questionnaires and interviews to collect relevant data for this study. Results Of the 50 respondents of the study, 30 were females and 20 were males. This shows that majority 60% of the respondents were females and 40% were males. The correlational findings revealed a spearman's coefficient of-0.242 with Sig value of 0.117. This shows a negative weak relationship between loan access and financial performance of SMEs in Sembabule district. The spearman's correlation coefficient of 0.724 was revealed with a significant value of 0.004. This shows a strong positive relationship between lending terms and financial performance. Therefore favorable lending terms led to improved financial performance of SMEs in Sembabule district. Conclusion: Generally micro loan access, lending terms and loan size have a significant relationship with financial performance of SMEs in Sembabule district. Recommendations: SMEs should avoid taking loans that take a sizable proportion of their business as this affects decision making, operations and financial performance of the business. The loan should be kept below 15% of the total capital of the business.
MICRO-FINANCE AND PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES IN MAKURDI METROPOLIS 1 2
International Journal of accounting and finance, 2020
The Micro, Small and Medium Enterprises (MSME) sector plays a vital role in the growth of the economies of developing countries. Similarly, microfinance facilities are crucial to MSMEs financial performance as they facilitate the growth and development of MSMEs. This study, therefore, investigates the effects of Microfinance on MSME performance in Makurdi metropolis of Benue State. The research design is descriptive and employs the survey method. Simple random sampling techniques was adopted as a technique in selecting the 323 MSMEs that form the sample size of the study. A structured questionnaire was used in the collection of relevant data used for analysis. Data was presented through the use of frequency tables and Chi-square test was used to carry out the analysis. The study found that microfinance has an positive effect on sales revenue and profitability and non-current assets. The study recommends creating awareness especially for women on the importance of Microfinance in entrepreneurship development. The study also recommends that Benue state government should set up and implement policies that will ease access to microfinance credit by MSMEs, especially from microfinance banks. The study also recommends the granting of more loans to women to increase the number of women engaged in entrepreneurship activities within Makurdi metropolis.
EFFECT OF MICROFINANCE PRODUCTS ON THE GROWTH OF SMALL AND MEDIUM ENTERPRISES IN NAIROBI COUNTY
International Academic Journal of Economics and Finance, 2020
The main goal of the study was to assess the effect of microfinance services on the growth of small and medium scale businesses. The research was focused on small and medium scale businesses in Nairobi County. A descriptive survey research design was used to assess the various business categories in Nairobi County. The collection of data was done through the utilization of a well-structured questionnaire and secondary data matrix. Additionally, a stratified random sampling approach was utilized to select 225 SMEs from a target population of 100,982 registered SMEs by Nairobi County Licensing Department. This was considered to be representative of the whole population of Nairobi County. The findings were offered and explained through the utilization of tables with percentages, frequencies, standard deviations, and means. Furthermore, multiple regression was undertaken to explain the link between the loan provision, insurance provision, and training provision and growth of small as well as medium businesses. Based on the study, the research participants concurred that microfinance institutions have strongly and positively impacted the growth of their enterprises by way of their products. Also, the regression analysis outcomes found that there is a significant relationship between the growth of small and medium businesses and the provision of loans, insurance with r-square magnitudes of 0.83,0.48, and 0.74 respectively. Moreover, the ANOVA outcomes also agree with the presence of a statistically significant relationship between the predictor variables and the dependent variable with an F value <0.05. Premised on the findings of the study, it was determined and concluded that indeed the growth of SMEs in terms of sales, business expansion, and increase in the number of employees is impacted by changes in loans, insurance, and training provision and that relationship is positive. The research also found out that the loans and training provision had the highest impact on the growth of small and medium businesses in Nairobi County as illustrated by the strong positive correlation and relationship. Also, the research recommends that stakeholders and governments need to promote the availability of MFIs products and enrich them. Additionally, future studies should focus on the country as a whole as well as other counties so as the offer more data details about the impact that products being offered by microfinance has on the growth of small and medium enterprises.
THE ROLE OF MICRO-FINANCE INSTITUTION IN UPLIFTING SMALL SCALE BUSINESSES
Abstract Looking at the roles of micro finance institution in uplifting the incomes of the small scale businesses in Bugiri (Uganda), promotion of micro entrepreneurship and microenterprises is gaining importance in the present context as an important economic growth and poverty alleviation tool. More than a concept ‘Sustainable micro entrepreneurship ‘that’s to say small scale business is a development process, based on small scale and self sustainable activities. One of the major problems identified with the development of sustainable micro entrepreneurship is lack of access to credit for the micro entrepreneurs. According to an estimate more than 90 percent people in developing countries lack access to financial services i.e. either savings or credit. Specially, for the micro entrepreneur who lacks any asset base for collateral, situation becomes all the more critical. However, microenterprise usually needs small capital. Still it is difficult for the poor to manage that small amount of capital need. Due to the failure of government and market institutions to provide financial services to the poor, last decade has seen the evolution of microfinance institutions as a boon for the micro entrepreneurs. For promoting ‘sustainable micro entrepreneurship’ microfinance is seen as an important requirement. This paper will make an attempt to explore the possibilities of promoting the roles of micro finance institutions in uplifting incomes of small scale business or micro entrepreneurship
EFFECT OF MICRO FINANCE BANK ON THE GROWTH OF SMALL AND MEDIUM ENTERPRISES IN NIGERIA
Microfinance banks are key to the growth and development of small and medium enterprises most especially in the wave of turbulence and unfavorable business environment, this is due to the fact that they provide short term facilities to SMEs. The study examined the relationship between micro finance bank and the growth of small medium enterprises in Nigeria. The descriptive survey design was adopted for the study. The population of the study consists of 100 selected SME's operators within Wuse business area Abuja, Simple random sampling technique was use to arrive at a sample size of 100. In other to address the objective of the study, structured questionnaire was employed as the research instrument used to obtain relevant information from 100 respondents and were all filled and returned. Descriptive statistics, cross tabulation and simple linear regression were used to analyze the data collected. Findings revealed that micro finance banks domestic fund transfer services contribute to the growth of small and medium enterprises, this is revealed by the regression result (Beta =0.500; P = 0.000 < 0.05). Also, the study also discovered that repayable loans provided to small medium enterprises enhances the development of their businesses as revealed by the regression result (Beta = 1.074; P 0.000 < 0.05). The study concludes that there exists a positive relationship between micro finance bank and small medium enterprises. The study recommends that customers and beneficiaries of micro finance loans should avoid default in the repayment of loans. Furthermore, Microfinance banks should avoid charging high interest and much collaterals when granting loans.
Microfinance Banks Services and Small Scale Enterprises Financing in Abuja, Nigeria
European Journal of Accounting, Auditing and Finance Research
Microfinance Banks (MFBs) was majorly established in Nigeria to empower and provide financial services to the poor and Small Scale Enterprises (SSEs) in the rural and urban areas. Yet the contribution of the SSEs to the Nigerian economy is meagre, this is simply because MFBs is hijack by the money bags in the society. The study therefore, examined the impact of microfinance banks on financing small scale enterprises (SSEs) in Abuja, Nigeria. The specific objectives of the study were to: (i) evaluate the impact of micro loans on SSEs financing in Abuja, Nigeria; (ii) assess the influence of micro savings on SSEs financing in Abuja, Nigeria. The research design used for the study was survey research design. The population of the study comprises of 57 MFBs and 2,794 SSEs in Abuja, Nigeria. A sample of 349 SSEs and 26 MFBs were selected through stratified random sampling techniques. Copies of questionnaires were distributed to the selected sample. The data was analyse through simple percentages and order logit regression. The finding of the study revealed that: (i) an increase in the amount of loan given by microfinance banks increase the growth of small scale enterprises; (ii) an increase in micro savings of small scale enterprises lead to an increase in small scale enterprises financing by microfinance banks. Based on the findings, the study therefore concluded that MFBs impact positively on financing SSEs in Abuja, Nigeria. The study recommends that MFBs should increase the supply of micro loans to SSEs, this will help in a long way to expand their business and create more employment opportunities to the country. The study also stated that more programmes and policies should be put in place that will create an enabling environment for small businesses to operate optimally in Abuja, and other part of Nigeria.
This paper investigates the contributions of microfinance to the development of micro, small and medium enterprises in Lagos and Ogun states, Nigeria. The research was design to combined primary and secondary sources of data. The data obtained were analyzed using one sample t-test, Pearson correlation coefficient analysis and multiple regression analysis. The result obtained revealed that there is a low positive correlation between microloan received by entrepreneurs and business expansion capacity of MSMEs in Nigeria. It was also revealed that the non-financial services rendered by microfinance banks enhance business performance of MSMEs, while the financial services particularly the asset loan size; asset loan duration and asset loan repayment method does not have the capacity to enhance MSMEs business growth. The study recommend that Microfinance Bank (MFBs) should increase the duration of asset loans given to client, or spread the repayment over a longer period of time, or increase the moratorium. This will enable the clients to have greater use of the loan over a longer period for the acquisition of capital assets and technology.