Microfinance services and growth of women owned small scale enterprises in Uganda

Abstract

The purpose of the study was to establish the effect of microfinance services in the growth of women owned small scale enterprises in Jinja Central market in Jinja Municipality in Uganda. The study was driven by the fact that, effect of Women Small Scale Enterprises (WSSEs) in promoting economic growth and development of countries is widely accepted and documented by both scholars and policy makers. Access to Microfinance Institutions (MFIs) services guarantees their sustainability. The study was guided by the three specific research objectives which were; to examine the effect of loans offered by MFIs in the growth of women owned small scale enterprises, to assess the effect of Savings in MFIs to the growth women owned small scale entrepreneurs, to ascertain how Loans Insurance in MFIs affect the growth of women small scale enterprises in Jinja Central market in Jinja Municipality. The study used a cross sectional survey design with the quantitative approach which was non-experimental in nature and unit of analysis were women small scale enterprises in Jinja Central market Jinja Municipality, Jinja District. The study population comprised of 3,000 women owned small scale enterprises, out of which a sample size of 341 respondents was selected using simple random sampling technique. Primary data was collected using questionnaire survey anchored on likert scaled range and was analyzed using SPSS version 20 to generate descriptive, correlation and regression empirical analysis. Results from descriptive analysis indicate a high level of women small scale enterprise growth at general mean of 4.00; the correlations analysis indicated that micro loans (r = 0.331), savings (r = 0.266) and loan insurance (r = 0.385) had a statistically significant positive effect on the growth of women small scale enterprises. In addition, findings from the regression analysis established that the effect of micro loans, savings and loan insurance on growth of WSSEs is positive and statistically significant. However from multiple regression analysis, it was established that it is only Loans and loan insurance that are statistically significant at 1% level. It was found out in this study that MFI services of loans, savings and insurance explain 18.7% variation in the level of growth of women owned small scale enterprises. The study recommended that the government, non-government organizations and other stakeholders should sensitize and train women entrepreneurs on how to access and use microfinance services in their businesses to attain growth of their small scale enterprises