Pragmatic Policy Recommendations to the Challenges of Micro Finance Institutions in Uganda: A Case of Selected Districts in Uganda.

Abstract

The study was set to investigate the challenges facing microfinance institution with a case of four districts and propose policy recommendations in Uganda. These included Mpigi, Wakiso, Luwero and Mukono. The study was guided by two specific objectives; to examine the major challenges facing the Microfinance institutions and to propose policy recommendations. The study used both qualitative and quantitative method of analysis. Data was collected using a structured questionnaire from a total of 136 respondents who included credit officers, top management officers      Responses were categorized based on likert scale and means were generated using SPSS as package for interpretation of findings. The views of the officials were qualitatively analyzed and conclusions were made. The results of the study indicated; lack of collateral security, high bank rates, less government support, lack of information about clients, limited management capacity, high default rates, inadequate loan funds and microfinance institution have turned out to be profit oriented, poor management capacity and loan diversion as challenges. The study recommended an increase in loan funds by mobilizing more saving and obtaining loans on lower interest rates, employment of qualified personnel and training the existing staff, encouragement of group lending, credit insurance and increased monitoring and supervision. Further study can be carried out in other areas of Uganda especially in a rural seeing.