Banking Services and Growth of Informal Sector in Uganda: A Case Study of Makindye Division Kampala

ABSTRACT The topic of the study was banking services and performance of the informal sector in Makindye division, Kampala. The study was guided by three specific objectives, that included i) determining the extent of banking services; ii) level of performance of informal sector; iii) the effects of banking services on performance of informal sector in Makindye division, Kampala. This research employed descriptive correlational design to describe the relationship between credit financing and performance of micro-enterprises in Makindye division, Kampala. The findings of the study indicated that, the overall mean on banking services in Makindye division is 2.52 which fall under high, implying that the banking services provided are satisfactory to the business individuals in Makindye division, Kampala. The overall mean of 2.46 fall under high which gives a general implication that the performance of informal sector in Makindye division, Kampala is generally high. There is a positive weak effect of banking services on performance of informal sector in Makindye division, Kampala since the sig. value (0.233) was less than 0.05 and which is the maximum level of significance required to declare a significant effects in social sciences. This implies that good and better banking services will improve the level of performance of informal sector in Makindye division, Kampala, and unsatisfying banking services reduces it. It can be concluded that, the overall mean 2.52 implies that the banking services provided are satisfactory to the business individuals in Makindye division, Kampala; also that, the overall mean of 2.46 fall under high and implies that the performance of informal sector in Makindye division, Kampala is generally high and that there is a positive weak effects of banking services on performance of informal sector in Makindye division, Kampala since the sig. value (0.233) was less than 0.05 and which is the maximum level of significance required to declare a significant effects in social sciences. The researcher suggested that the banks should always provide services in form of loans to informal sector for better informal sector performance; the banks should always make sure that they provide business advice to the informal sector for better performance; they should always provide bank services in form of saving people’s money which will reduce the incidences of theft cases; the informal sector should always make sure that the type of loans they get are properly invested to have better returns and that the informal sectors should always make sure that the type of loans they get have interest rates which do not threaten the growth of their businesses.