The Microfinance Institutions (Mfis) And Poverty Alleviation: A Case Study Of Pride Microfinance Limited, Arua Branch-Uganda

TABLE OF CONTENTS Declaration ................................................................................................... .i Approval ....................................................................................................... ii Dedication ................................................................................................... iii Acknowledgements ..................................................................................... iv Table of contents ....................................................................................... v List of tables ........................................................................................... viii List of figures ........................................................................................... ix Abstract ....................................................................................................... x CHAPTER ONE: INTRODUCTION ............................................................ 1 1.0 Introduction ................................................................................... ........ 1 1.1 Background of the study ......................................................................... 1 1.2 Statement of the problem ........................................................................ 3 1.3 Purpose of the study ............................................................................... 3 1.4 Objectives of this study ........................................................................... 4 1.5 Research questions ................................................................................. 4 1.6 Hypothesis .............................................................................................. 4 1. 7 Scope of the study .................................................................................. 5 1.7.1 Content scope ...................................................................................... 5 1.7.2 Geographical Scope ............................................................................. 5 1.7.3 Time scope ........................................................................................... 5 1. 8 Significance of the study ......................................................................... 5 1.9 Conceptual framework ............................................................................ 7 CHAPTER TWO: LITERATURE REVIEW .................................................. 8 2.0 Introduction ........................................................................................... 8 2.1 Definition of concepts and key terminologies ........................................... 8 2.2 Policies and procedures followed in loans administration ........................ 9 2.3 Effectiveness of the loan administration policies .................................... 10 2.4 Relationship between Microfinance institutions and poverty alleviation. 10 V CHAPTER THREE: RESEARCH METHODOLOGY ................................... 12 3.0 Introduction ......................................................................................... 12 3.1 Research Design ................................................................................... 12 3.2 Study Population .................................................................................. 12 3.3 Sampling procedure .............................................................................. 12 3.4 Sample size .......................................................................................... 14 3.5 Research Instruments ........................................................................... 14 3.5.1 Questionnaires .................................................................................. 14 3.5.2 Interview guides ................................................................................. 15 3.5.3 Observation ....................................................................................... 15 3.5.4 Documentary review .......................................................................... 15 3.6 Data sources ........................................................................................ 15 3.6.1 Primary data ...................................................................................... 16 3.6.2 Secondary data .................................................................................. 16 3.7 Validity and Reliability of the Study ...................................................... 16 3.8 Data Analysis ....................................................................................... 16 3.8.1 Editing ............................................................................................... 16 3.8.2 Use of tables ...................................................................................... 17 3.9 Ethical consideration ............................................................................ 17 3.10 Limitations of the study ...................................................................... 17 CHAPTER FOUR: PRESENTATION INTERPRETATION AND ANALYSIS OF FINDINGS ............................................................................................ 18 4.0 Introduction ......................................................................................... 18 4.1 Demographic characteristics of the respondents ................................... 18 4.3 Findings on how clients utilize the services they get .............................. 34 4.4 Problems encountered by pride microfinance limited and clients .......... .40 Vl CHAPTER FIVE: SUMMARY, CONCLUSIONS & RECOMMENDATIONS .... 43 5.1 Introduction ......................................................................................... 43 5.2 Summary offindings ............................................................................. 43 5.2.1 Bio data information of the respondents ............................................ .43 5.2.2: Services offered and utilized by the employees and clients ................. 44 5.2.3: How clients utilize the services .......................................................... 44 5.2.4: Problems faced by Pride microfinance limited and the clients ............ 45 5.3 Conclusion ........................................................................................... 45 5.4 Recommendations ................................................................................ 46 REFERENCES ............................................................................................ 4 7 APPENDIX A: DATA COLLECTION INSTRUMENTS ..................................... .48 (a) QUESTIONNIARES ................................................................................. 48 (i) FOR EMPLOYEES .................................................................................. .48 (ii) QUESTIONNIARE FOR THE CLIENTS OF PRIDE MICROFINANCE, ........ 53 (b) INTERVIEW GUIDE ............................................................................... 58 (i) Interview guide for employees ................................................................. 58 (ii) Interview guide for clients of Pride Microfinance, Arua branch ................ 59 APPENDIX B: THE TIME FRAME OF THE STUDY ....................................... 60 APPENDIX C: BUDGET FOR THE STUDY ................................................... 61 Vll LIST OF TABLES Table 3.1: Shows categorization of the respondents ...................................... 14 Table 4.1: Gender of the respondents .......................................................... 18 Table 4.2: Marital status of the respondents ................................................ 20 Table 4.3: Age of the respondents ................................................................ 21 Table 4:4: Occupation of the respondents who were employees ..................... 23 Table 4:5: Occupation of the clients ............................................................. 24 Table 4.6: Education Levels of the respondents ........................................... 26 Table 4.7: Departments where the employees belong to ................................ 28 Table 4.8: Number of years spent by the employees at pride microfinance ..... 28 Table 4.9: Shows the monthly incomes levels of the clients ........................... 29 Table 4.10 Findings on services offered by pride microfinance-Arua branch ... 30 Table 4.11: Shows whether the clients had ever got loan facilities ................ 31 Table 4: 12 How the clients utilized the services listed above ......................... 32 Table 4.13: Response on how easy it was to get loan.s from the limited ........... 32 Table 4.14: Source of funds they use for paying back loans ........................... 34 Table 4.15: Whether it was easy to pay back the loans ................................. 35 Table 4.16: Whether their incomes improved after getting the loan ............... 35 Table 4.17: Whether they educate clients on utilizing the services ................ 36 Table 4.18: Opinion of employees on poverty reduction ................................. 37 Table 4.19: Why employees believe poverty has somehow reduced ............... 38 Table 4.20: How the clients rate services offered by pride microfinance ........ 39 Table 4.21: Whether clients keep their money in pride microfinance ............ .40 Table 4.22: Whether their clients receive interests on their deposits ............ .40 Table 4.23: Problems encountered by pride microfinance limited .................. .41 Table 4.24 Problems encountered by the clients .......................................... .42 viii LIST OF FIGURES Fig 1.1: Conceptual framework. .................................................................... 7 Fig. 4.1: Gender of the respondents ............................................................. 19 Fig 4.2: Marital status of the respondents .................................................... 20 Fig 4.3: Response of respondents by age ...................................................... 22 Fig 4.4: Shows the occupation of the employee ............................................. 24 Fig 4.5: Shows the occupation of the clients ................................................ 25 Figure 4.6: Shows the Education Levels of the respondents ........................... 27 Figure 4.7: Getting loan from pride microfinance ltd ..................................... 31 Fig 4.8: A bar graph showing the ease of getting loans ................................. 33 Fig 4. 9: Whether clients are sensitized about usage of the loans obtained ...... 37 IX

ABSTRACT

The study titled "The microfinance institutions and poverty alleviation, with a case study of pride microfinance limited Arua branch ", considered a population of 48 people from whom a 42 were chosen as respondents. Three research objectives which included identifying the policies used by the microfinance institutions, determining the effectiveness of these policies and thirdly examining the relationship between microfinance institutions and poverty alleviation. Explanatory research design with study targeting the employees and clients of pride microfinance limited was used. Simple random sampling technique was used, self administered questionnaires, interviews, and observations were used to collect data. Primary data sources (interviewing respondents and use of questionnaires) and secondary sources (internet, libraries, textbooks and so on) were used. Data was analyzed qualitatively and quantitatively using computer packages Ms-Excel and Ms Word in tables, pie charts, and bar graphs. From the study findings, women were the majority with 52%, those married were 62% with majority of the respondents between the age of 26-46 years and income levels of 300,000 - 500,000 and so their financial levels have increased. The main financial services offered were loan services and mobilization of savings. Most of the clients use the loans to boost their businesses and farms. Pride microfinance limited faces major challenges of high loan defaulters and competition from other financial institutions while the clients have challenges of high interest rates and short repayment period. The following recommendations were therefore given by the researcher; good net working, government subsidization, extension of repayment periods, low interest rates, extending services nearer to the clients to mention but a few.