The role of microfinance institutions on the performance of small scale farmers

Abstract

This study assessed the effect of microfinance towards the performance of small scale farmers basing on clients of FINCA Mbarara as the case study. The specific objectives of the study were:To examine the role of financial literacy on performance of small scale farmers in Mbarara district, To analyse the role of loan terms and conditions on performance of small scale farmers and to establish the role of loan mobilization on performance of small scale farmers in Mbarara District. The study adopted the case study design with quantitative and qualitative research techniques. A total sample size of 50 respondents was used. Self-administered questionnaires and face to face interviews were used to collect data. Data was coded and later processed using Statistical Package for the Social Sciences (SPSS) computer program. From the study it was revealed that conclusion it was observed that clients get small loans without serious collateral that help them to meet their financial needs and they have also acquired financial management skills hence they can now budget and better manage our investment skills. It was also discovered that clients can do well business plans, keep financial records which has influenced MFIs to easily give them loans without necessarily having to go through various prolonged processes. From the study it was discovered that MFI’s have given clients the adequate loans at affordable rates, with little amount of security and are always given a period long enough to payback that covers the gestation period of their operations. It was also found that clients know various members who can guarantee them security to acquire MFI loans through the SACOs who know