Journal
Metropolitan Journal of Academic Multidisciplinary Research
MJAMR
Lending Terms, Information Asymmetry and Credit Accessibility Among Microfinance Clients in Kigezi Sub- Region, Western Uganda
Alex Irumba, Dr Ariyo Gracious Kazaara, Kamugisha Nelson
| Journal | Metropolitan Journal of Academic Multidisciplinary Research (MJAMR) |
| Volume / Issue | Vol. 2, No. 7 |
| Published | 31 July 2023 |
| ISSN | 3006-4384 |
Abstract
This study examines the relationship between lending terms, information asymmetry and credit accessibility among selected MFIs clients in Kigezi sub-region, Uganda. A crosssectional research design along with a quantitative research approach was used. A sample of 375 MFI clients was selected from 11,492 MFI clients in 79 MFIs. This study used cluster, disproportionate, and simple random sampling to arrive at the sample. Data was obtained using a structured questionnaire, tested for validity using expert judgment and CVI while pretesting and Cronbach Alpha coefficient checked its reliability. SPSS v25 was used to analyze data. This study found a positive relationship between lending terms and credit accessibility; and a positive relationship between information asymmetry and credit accessibility. The study also found that both lending terms and information asymmetry are significant predictors of credit accessibility. Information asymmetry was the better predictor of credit accessibility. This study concludes that offering favourable lending terms and minimizing information asymmetry cannot be taken for granted in enhancing credit accessibility. The study recommends clients to provide quality information when processing credit from microfinance institutions, and increase their responsiveness to providing the information asked for during the loan process to improve credit accessibility. Clients should equally apply for flexible loan types especially group loans. The study theoretically contributes to Pecking Order Theory acknowledging that MFI clients evaluate lending terms before they made a decision to access credit or not. It also endorses the Organizational information processing indicating that the more informed MFIs clients are, the more they will increase desire to access credit.
Keywords
lending terms
information asymmetry and credit accessibility
Cite This Article
Alex Irumba, Dr Ariyo Gracious Kazaara & Kamugisha Nelson (2023). Lending Terms, Information Asymmetry and Credit Accessibility Among Microfinance Clients in Kigezi Sub- Region, Western Uganda. Metropolitan Journal of Academic Multidisciplinary Research, 2(7). https://journals.miu.ac.ug/pages/article.php?article_id=955
More in This Issue
View full issue →
1
A Study on the Effect of Corruption Practices on the Implementation of Government Project in Uganda a Case Study of Koch Goma Town Counci
corruption practices and government project
2
A Study on the Impact of Social Media on the Promotion of the Hotel Industry in Uganda a Case Study of Arcadia Suits Kampala
social media and hotel industry
3
An Evaluation of Taxation as a Tool for the Public Sector Development in Uganda: A Case Study of Kiboga Distirct Local Government
evaluation
taxation
public sector and development
4
An Evaluation of the Effects of Advertising on Consumer Brand Awareness in an Organization, a Case Study of Mukwano Group of Companies
advertising
consumer brand and organization
5
An Evaluation of the Impact of Teachers Performance Appraisals on the Organizational Productivity a Case Study of Secondary Schools in Mukono District
teachers
performance appraisals and organizational productivity