Microfinance financing and business performance of SMES in Makindye division
Finance and its associated services are a crucial prerequisite in the initiation and progress of the SMEs. The relationship that exists between microfinance financing and the business performance of the Small Mid-size Enterprises in Makindye division, Kampala district was the main objective/study purpose. To address, the study purpose, the study specifically addresses the following study objectives which were; achieve the purpose which was to establish the relationship between loan services, savings deposits, financial education/training, and policy on credit and business performance of the SMEs of Makindye division. The study used only cross-sectional research design supported by quantitative approaches. Using simple random sampling method 133 SME operators were selected as a sample size in Makindye division. The correlation results using the spearman’s rank correlation test shows that loans services had a moderate significant relationship with the business performance of SMEs in Makindye division (r=0.434, Pvalue< 0.01). The study showed a moderately positive and substantive correlation between savings and SMEs' success in Makindye division (r=0.536, P-value<0.01). The study revealed that the moderate significant relationship between financial training and business success in Makindye Division was positive and significant, (r=0.652, P-value<0.01). Based on the findings the study concluded that loans services, savings deposits, financial education/training, and the different policies on credit play a pivot role in improving the performance of SMEs in Makindye division, despite the existence of several challenges in the sector. To overcome some difficulties, MFIs should revise the loan terms given to their borrowers and ensure that they are favourable for them to access loans. The MFIs are recommended to provide enough loan repayment period to the SME operators since this would provide space for them to pay loans. MFIs should provide easy and convenient deposit and collection facilities for SMEs since this would encourage them to save and thus improve financial performance. The SME operators should be sensitized to regularly attend financial education/training organized by MFIs.