Microfinance Services and Performance of SMEs in Tororo Municipality

Abstract

This study examined the effect of Microfinance Services on the performance of SMEs. The study was guided by the following objectives notably, to assess the relationship between micro loan services and performance of SMEs; to examine the relationship between micro savings deposits and performance of SMEs, and to establish the relationship between financial training and performance of SMEs. The study used a cross sectional research design, and a quantitative approach. Data was collected from a target population of 100 of SMEs with accessible unit of 70 of SMEs in Tororo Municipality, using simple random and purposive sampling techniques. Data were collected with the aid of closed ended questionnaire and Statistical Packages for Social Sciences was employed for analyzing data from which frequency tables, descriptive statistics (mean and standard deviation), reliability, validity, correlation, and regression results were obtained. The study findings revealed that there is a positive and a significant effect of micro loan services and performance of SMEs, micro savings deposits and performance of SMEs and financial training and performance of SMEs. The study concludes that there is a strong predictive power that the dimensions of Microfinance Services contribute towards enhancing the performance of SMEs in Tororo Municipality. Finally, the study, recommends that efforts to improve the performance of SMEs depends on Microfinance Services (micro loan services, micro savings deposits and financial training).