The role of governance practices on the financial growth of microfinance institutions in Sheema district. A case study: Pride Microfinance (Kabwohe)

Abstract

This research has been arranged in chapters from chapter one to chapter five. The study sought to examine the role of governance practices on the financial growth of microfinance institutions in Sheema district. The study targeted employees and clients of PRIDE microfinance institution. The study on the role governance practices and financial growth of microfinance institutions in Sheema district is expected to influence the Ugandan government decision in designing relevant policies concerning the running of microfinance institutions in Uganda. Also microfinance institutions will be in position to adapt to a better governance practices. A total of 29 respondents both employees and clients contributed to this research and descriptive statistics such as percentages, frequencies and tables were used to analyze the data from the survey. Three dimensions of governance practices that is oversight of management performance, strategy and resource mobilization and policies were considered as dependent variables and financial growth was used as independent variables. The survey found out that respondents constituting 71.45% agree and strongly agree that board caries out oversight on financial issues, 70.498% strongly agree and agree that the MFI has strategic plan and knows where to get funding yet 71.92% strongly agree and agree that the institution has functioning policies concerning financial growth. The survey indicates that majority of respondents 71.92 consents that policies contribute more on the financial growth. Though the survey indicates that the MFI has put in place some good governance practices, the board of directors should improve on transparency and disclosure, and also continue separating the role of board members and CEO in order to equitably achieve the set financial goals and objectives. Government should set in place policies that will contribute to growth objectives of microfinance institutions in Uganda.