Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council.
The study focused on interest rates and financial performance of small and medium enterprises in Uganda; A case study of Muhanga Town Council. The objectives of the study were; to find out the factors considered when determining interest rates to be paid by SMEs in Muhanga Town Council, to establish...
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| Format: | Thesis |
| Language: | English |
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Kabale University
2025
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| Online Access: | http://hdl.handle.net/20.500.12493/2829 |
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| author | Nabaasa, Innocent |
| author_facet | Nabaasa, Innocent |
| author_sort | Nabaasa, Innocent |
| collection | KAB-DR |
| description | The study focused on interest rates and financial performance of small and medium enterprises in Uganda; A case study of Muhanga Town Council. The objectives of the study were; to find out the factors considered when determining interest rates to be paid by SMEs in Muhanga Town Council, to establish the level of financial performance of SMEs in Muhanga Town Council, and to establish the relationship between interest rates and the financial performance of SMEs in Muhanga Town Council. A cross-sectional research design was used and data was collected using questionnaires. The researcher first prepared data collection methods, and their collectors and accuracy were confirmed by the supervisor to test their validity and reliability. The researcher then obtained an introductory letter from Kabale University to be presented to the Town Clerk, and this was used to seek permission to collect data from small and medium enterprises. Then, after one week, the research was collected, and when all the targeted respondents were finished filling out the questionnaire, the researcher then collected, classified, coded, edited, and presented the data using tables. Data analysis involved sorting, inspecting, cleaning,g and coding the data ready for presentation. Quantitative data from self-administered structured questionnaires were processed by coding and entering it into the computer where Microsoft Excel and SPSS were used to generate descriptive statistics like frequencies and percentages. SPSS was used to generate inferential statistics. The findings of the study revealed that compound interest was one of the interest rates charged on SMEs 45% of the respondents disagreed and 35% of the respondents suggested that fixed interest rates were charged on SMEs. The findings of the study also revealed that the prime interest rate was one of the interest rates charged on SMEs 45% of the respondents disagreed, 30% were not sure, 20% agreed and 5% strongly agreed with the statement. The researcher therefore concludes from the above that the financial performance of small-scale businesses does not always improve as a result of acquiring loans; the study highlights the significant role of interest rates in enhancing the financial performance of SMEs in Muhanga. The study recommends that there is a need for the management of small and medium enterprises to make tireless consultations with other business managers about how financial performance can be attained. More emphasis is needed by microfinance institutions to reduce on their interest rates so as to motivate small-scale and medium enterprises like those in Muhanga Town Council to acquire loans at a low interest rate. This will enable the managers of the business enterprises to increase on financial performance. |
| format | Thesis |
| id | oai:idr.kab.ac.ug:20.500.12493-2829 |
| institution | KAB-DR |
| language | English |
| publishDate | 2025 |
| publisher | Kabale University |
| record_format | dspace |
| spelling | oai:idr.kab.ac.ug:20.500.12493-28292025-01-18T00:01:07Z Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. Nabaasa, Innocent Interest Rates Financial Performance Small Medium Enterprise Muhanga Town Council Rukiga District The study focused on interest rates and financial performance of small and medium enterprises in Uganda; A case study of Muhanga Town Council. The objectives of the study were; to find out the factors considered when determining interest rates to be paid by SMEs in Muhanga Town Council, to establish the level of financial performance of SMEs in Muhanga Town Council, and to establish the relationship between interest rates and the financial performance of SMEs in Muhanga Town Council. A cross-sectional research design was used and data was collected using questionnaires. The researcher first prepared data collection methods, and their collectors and accuracy were confirmed by the supervisor to test their validity and reliability. The researcher then obtained an introductory letter from Kabale University to be presented to the Town Clerk, and this was used to seek permission to collect data from small and medium enterprises. Then, after one week, the research was collected, and when all the targeted respondents were finished filling out the questionnaire, the researcher then collected, classified, coded, edited, and presented the data using tables. Data analysis involved sorting, inspecting, cleaning,g and coding the data ready for presentation. Quantitative data from self-administered structured questionnaires were processed by coding and entering it into the computer where Microsoft Excel and SPSS were used to generate descriptive statistics like frequencies and percentages. SPSS was used to generate inferential statistics. The findings of the study revealed that compound interest was one of the interest rates charged on SMEs 45% of the respondents disagreed and 35% of the respondents suggested that fixed interest rates were charged on SMEs. The findings of the study also revealed that the prime interest rate was one of the interest rates charged on SMEs 45% of the respondents disagreed, 30% were not sure, 20% agreed and 5% strongly agreed with the statement. The researcher therefore concludes from the above that the financial performance of small-scale businesses does not always improve as a result of acquiring loans; the study highlights the significant role of interest rates in enhancing the financial performance of SMEs in Muhanga. The study recommends that there is a need for the management of small and medium enterprises to make tireless consultations with other business managers about how financial performance can be attained. More emphasis is needed by microfinance institutions to reduce on their interest rates so as to motivate small-scale and medium enterprises like those in Muhanga Town Council to acquire loans at a low interest rate. This will enable the managers of the business enterprises to increase on financial performance. 2025-01-17T12:28:59Z 2025-01-17T12:28:59Z 2024 Thesis Nabaasa, Innocent (2024). Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. Kabale: Kabale University. http://hdl.handle.net/20.500.12493/2829 en Attribution-NonCommercial-NoDerivs 3.0 United States http://creativecommons.org/licenses/by-nc-nd/3.0/us/ application/pdf Kabale University |
| spellingShingle | Interest Rates Financial Performance Small Medium Enterprise Muhanga Town Council Rukiga District Nabaasa, Innocent Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. |
| title | Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. |
| title_full | Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. |
| title_fullStr | Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. |
| title_full_unstemmed | Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. |
| title_short | Interest Rates and Financial Performance of Small and Medium Enterprise in Uganda: A Case Study of Muhanga Town Council. |
| title_sort | interest rates and financial performance of small and medium enterprise in uganda a case study of muhanga town council |
| topic | Interest Rates Financial Performance Small Medium Enterprise Muhanga Town Council Rukiga District |
| url | http://hdl.handle.net/20.500.12493/2829 |
| work_keys_str_mv | AT nabaasainnocent interestratesandfinancialperformanceofsmallandmediumenterpriseinugandaacasestudyofmuhangatowncouncil |