The influence of microfinance institutions on the growth of small-scale businesses

Abstract

The research seeks to find out the influence of microfinance institutions on the growth of small scale businesses and the case study, clients operating small scale businesses and staff members of Centenary Rural Development Bank, Entebbe Road Branch Talenta house. The research was based on the general objectives and specific objectives. The general objective was about the influence of microfinance institutions on the growth of small scale businesses. The different specific objectives were finding out how microcredit influences the growth of SSBs, how savings influences the growth of SSBs and studying how microcredit influences on the growth of small scale businesses. The literature backed by different authors expounded more about these objectives in depth. The study revealed that majority of small scale business owners are located in rural areas and the growth of these SSBs is a result of easy accessibility of MFIs. However the shortcoming of MFIs is that small scale business owner’s lack knowledge about financial literacy especially in areas of record keeping and financial planning. The researcher comes up with the conclusions and proposes a set of recommendations that may be useful to all stakeholders and will ideologically enrich the players in this sector with more knowledge to exploit for future policies and decisions hence leading to the growth of small scale businesses.