THE IMPACT OF MICRO FINANCE LOANS ACCESSIBILITY ON SMALL AND MEDIUM SCALE ENTERPRISES (SMES)

THE IMPACT OF MICRO FINANCE LOANS ACCESSIBILITY ON SMALL AND MEDIUM SCALE ENTERPRISES (SMES)

ABSTRACT

This study is on micro-credit and Small and medium scale enterprises (SMEs): loans accessibility, and profit impact on SMEs.  My main aim of carrying out this research is to investigate if micro finance institutions issue out loans to SMEs, and the impact of micro-credit on the profitability of SMEs and problems encountered by these institutions.  Also other programs similar to micro finance and models of findings in other countries were pointed out. In the review of related literature area, such as their objectives, their past performances were carried out thoroughly using primary data (questionnaires).Collected data where analyzed, summarized, and interpreted accordingly with the aid of descriptive statistical techniques such as total score and simple percentage, using pie charts and tables. Chi square technique was adopted. Based on the findings of this study, the researcher found out that SMEs have greater access to micro-credit, and MFIs has contributed to Business, Financial and Managerial Training of SMEs. Also, SMEs face challenges such as Inability to provide the collateral securities in cases where they are demanded, and high interest rate. Finally, the researcher recommended that credits should client-oriented and not product- oriented, proper and extensive monitoring activities should be provided for clients who are granted loan, and business and financial training should be provided by MFIs on a regular basis.

 

 

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