The Role of Micro Finance Institutions On the Performance of Small Scale Business Enterprises in Uganda A Case Study of Centenary Rural Development Bank (Cerudeb)

ABSTRACT

The researcher aimed at establishing the role of micro-finance institutions on the performance of small-scale enterprises in Uganda and to recommend ways in which micro-finance institutions can improve their effectiveness in contributing to the development of small-scale enterprises in Uganda. Quantitative and qualitative research designs were used. Centenary Rural Development Bank (CERUDEB) was used as a case study point. The researcher discovered that the credit services offered by CERUDEB are suitable for the needs of small-scale enterprises; the distribution and size of loans and lending terms given by the Bank reflect this. However, the researcher also discovered that quite a number of Bank clients are dissatisfied with some of the microfinance products & services like the high-interest rates that is say 22% charged on loans and others as laid down in the research report. The researcher basing on the findings drawn from the research carried out, microfinance institutions should endeavor to expand their geographical outreach if they are to be able to serve as many small-scale enterprises in Uganda. CERUDEB should also endeavor to increase its loan size in order to create the loans more beneficial to small small-scale enterprises. Conclusively, Bank of Uganda should develop an appropriate/ Comprehensive policy work to guide the operations of all MFls in Uganda. The Government of Uganda should design a legal framework regulating the performance of all microfinance institutions in Uganda by not only taking at commercial banks a few deposit taking financial institutions as stipulated in the Microfinance institutions ACT 2003 where MFl'S are categorized in Tiers for example tier 1, tier 2, tier 3 up to tier 4.