Microfinance service delivery and growth of SMEs a case study of small and medium scale businesses in Tororo district.

Abstract

This study is to examine the impact of microfinance service delivery on the growth of SMEs in Tororo District. Specifically, the study sought to examine the impact of loan services on the growth of SMEs, to examine the impact of saving services on the growth of SMEs and also to examine the impact of non-financial services on the growth of SMEs. The study used descriptive correlation, comparative and cross-sectional survey designs. Data collected from 44 respondents using self-administered questionnaires as the key data collection instruments. Data was analyzed using frequency counts, means, and SPSS. The findings revealed that there was a relationship between microfinance service delivery and growth of SMEs. The microfinance service delivery enables the business to expand its sales and get capital. Recommendations based on the findings were that Microfinance institutions needs to improve their timely disbursement of loans to avoid frustrations and running to other sources of credit which might be expensive in a long run. The government should ensure that Microfinance institutions comply with the Microfinance Act of 2014 since with proper administration some of the challenges will be addressed The government and stake holders in Tororo district should diversify the saving products offered by microfinance to include products like insurance, buying of shares among others so as to retain the customers.