• Version
• Download 267
• File Size 758.96 KB
• File Count 1
• Create Date October 28, 2024
• Last Updated October 28, 2024

CREDIT MANAGEMENT AND FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS IN UGANDA: A CASE OF PRIDE MICROFINANCE, KATWE BRANCH, KAMPALA DISTRICT (issue 8)

The main aim of this study was to examine the relationship between credit management and financial profitability
of Microfinance Institutions in Uganda, a case study of PML, Katwe Branch. With the objectives of the study
which included; establishing the effect of Credit Monitoring on financial profitability; determining the relationship
between Credit recovery and financial profitability; and assessing the relationship between lending and financial
profitability of PML. The study adopted both descriptive and cross-sectional survey research designs with both
qualitative and quantitative methods of Data collection carried out at PML Katwe Branch. The study population
was 330 from which 71.8% was randomly and purposively selected as the study sample. Questionnaires and
interviews were used as Data collection methods. The results of the study revealed a very strong positive and
significant correlation between Credit Monitoring and financial profitability, a moderate significant relationship
between loan recovery policy and financial profitability, and a moderate positive significant relationship between
lending and financial profitability. In conclusion, the findings of the study indicated that credit monitoring policy,
loan recovery policy, and lending are influential factors of financial profitability in PML. The study recommends
that; microfinance institutions need to have effective supervision of borrowers on credit utilization and repayment
which should be done frequently to ensure financial profitability; and the study recommends that; management of
PML and Microfinance Institutions should consider revising and re-establishing procedures of collecting credits
from clients for the cost effectiveness of the Institutions. This can be done by using alternative and cheaper sources
of debt collection procedures. Thus, there is a need to develop effective loan repayment system. Microfinance
Institutions’ committee members and staffs are recommended to visits borrower’s business premises and verify
borrower’s assets before issuing out credit of any form to them.

Attached Files