The role of microfinance services on the performance of small-scale Enterprises

Abstract

Small scale business enterprises have always had trails in investing in business due to the absence of start of capital, financial management skills, or the appropriate ideas on feasible business. Nevertheless, micro-finance providers have over the last era proved quite essential in the provision of small formal loans to small business owners. The study therefore analyzed the role of microfinance services on the performance of small business in Kagadi town council which it had as the main objective and the specific objectives were to find out the microfinance services offered by microfinance institutions, in Kagadi town council and to identify the roles of micro finance services on the performance of small scale enterprises in Kagadi town council. A survey study was carried out using quantitative method of data collection and random and purposive sampling technique to the respondent. Questionnaires were used as a tool for collection of data, the study employed descriptive statistics involving measures of frequency and percentages and used person’s correlation to analyze a survey of 120 small business enterprises and 60 small business enterprises were randomly selected respondents from a targeted population of small scale business in Kagadi town council. Results were presented using tables and pie-charts. The study findings were consistent and admitted that availability and accessibility to micro-finance have a positive impact on the performance of small-scale businesses. Additionally, the findings admitted the presence of a correlation between financial services and the performance of small-scale businesses that had been submitted in the literature review. The study suggested that MFIs be given support by the government through setting policies that will support their formations and suggested that further research be done to assess the influence of microfinance level of commitment on the fulfillment of small-scale business persons.