Assessing the Relationship Between Micro Loans and Standards of Living, A Case Study of Heda Sacco, Hoima District.

ABSTRACT

The study assessed the relationship between micro loan and standards of living of HEDA Sacco clients and looked at; whether poor people improve standard of living through accessing micro loans, benefits of accessing micro loans on standard of living and challenges faced by borrowers. The study was carried out through field study where a sample size of 58 respondents was selected using simple size calculator out of 110 clients who had loans; simple random sampling and purposive sampling technique were used to purposively select people with required information. Case study design basing on use of qualitative approach was used; Questionnaires  with both open and closed ended questions were used. The data from the field was analyzed using excel. The study established that accessibility to micro loans is a tool for improving the standard of living of people, if the borrower uses the loan for the intended purpose and if the interest rate is low and user friendly. It was found to be improving lives of the people basing on data from the field.

 TABLE OF CONTENT

DECLARATION .............................................................................................................................. i

APPROVAL .................................................................................................................................... ii

DEDICATION ............................................................................................................................... iii

ACKNOWLEGDMENT ................................................................................................................. iv

TABLE OF CONTENT ................................................................................................................... v

LIST OF FIGURES ............................................................................................................................ viii

LIST OF TABLES ............................................................................................................................... ix

LIST OF ACRONYMS .................................................................................................................... x

ABSTRACT ................................................................................................................................... xi

CHAPTER ONE ....................................................................................................................... 1

1.0 INTRODUCTION ............................................................................................................... 1

1.1 Back ground ............................................................................................................................... 1

1.2 Problem statement. ..................................................................................................................... 3

1.3 Purpose ofstudy ......................................................................................................................... 3

1.4 Research Objectives ................................................................................................................... 3

1.5 Research Questions .................................................................................................................... 3

1.6 Significance of the study ............................................................................................................ 4

1.7 Scope of the study ...................................................................................................................... 4

1.7.1 Geographicalscope ................................................................................................................. 4

I. 7 .2 Concept scope ......................................................................................................................... 4

1.8 Conceptual Frame work ............................................................................................................. 4

CHAPTER TWO ..................................................... ." ................................................................ 5

LITERATURE REVIEW .......................................................................................................... 5

2.0 Introduction ............................................................................................................................... 5

2.1 Relationship between credit facility and standard of living .......................................................... 5

2.2 BENEFITS OF ACCESSING MICRO LOANS ......................................................................... 7

2.3 Challenges faced by borrowers ................................................................................................... 9

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CHAPTER THREE ................................................................................................................ 11

RESEARCH METHODOLOGY ............................................................................................. 11

3.0 Introduction ............................................................................................................................. 11

3.1 Research design ....................................................................................................................... 11

3.2 Study population ...................................................................................................................... 11

3 .3 Sampling design ....................................................................................................................... 11

3.4 Sampling procedure ................................................................................................................. 11

3.5 Sample size .............................................................................................................................. 11

3.6 Source of data .......................................................................................................................... 12

3.6.1 Primary data .......................................................................................................................... 12

3.6.2 Secondary data ...................................................................................................................... 12

3.7 Data collection instrument. ....................................................................................................... 12

3.7.1 Questionnaires ....................................................................................................................... 12

3.8 Data collection procedure ......................................................................................................... 12

3.9 Ethical consideration ................................................................................................................ 13

3.1.0 Quality control. ..................................................................................................................... 13

3.1.1 Validity ................................................................................................................................. 13

3.2.0 Data analysis and presentation ............................................................................................... 13

CHAPTER FOUR ................................................................................................................... 14

DATA ANALYSIS, INTERPRETATION AND PRESENTATION OF FINDINGS ................ 14

4.0 Introduction ............................................................................................................................. 14

4.1 Demographic characteristics of the respondents ........................................................................ 14

4.1.2 Sex of respondents ................................................................................................................ 15

4.1.3 Marital status of respondents ................................................................................................. 15

4.1.4 Level of education ................................................................................................................. 16

4.2.1 Accessibility to credit facility ................................................................................................ 17

4.2.2 When did you receive your first loan ..................................................................................... 17

4.2.3 How many times have you borrowed from HEDA Sacco ....................................................... 18

4.2.4 How did you borrow? ............................................................................................................ 19

4.2.5 Are there collaterals required to access a loan ........................................................................ 20

4.2.6 What collateral did you give to HEDA ................................................................................... 20

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4.2.7 Which loan product did you receive ....................................................................................... 21

4.2.8 Do you know anything about use of the following? ................................................................ 22

4.3.0 Benefits of accessing credit facility ........................................................................................ 23

4.3.2 Has the loan facility improved your standard of living ........................................................... 24

4.3.3 If yes? How has the credit facility improved your standard of living ...................................... 25

4.3.5 How have you managed to pay back the loan facility ............................................................. 26

4.4.0 Challenges encountered by borrowers ......................................... , .......................................... 27

4.4.2 If yes, what challenges respondents have encountered as a result of borrowing ...................... 28

4.4.3 What do you think should be the solution should be the solution to the above challenges? ..... 29

CHAPTER FIVE ..................................................................................................................... 31

DISCUSSION, SUMMARY OF FINDINGS, CONCLUSION, RECOMMENDATIONS ........ 31

5.0 INTRODUCTION ................................................................................................................... 31

5.1. Discussion of findings ............................................................................................................. 31

5.1.1 Relationship between accessibility to credit facility and standards of living ........................... 31

5.1.2 Benefits of accessing credit facility ........................................................................................ 31

5.1.3 Challenges faced by borrowers .............................................................................................. 32

5.2 Summary offindings ................................................................................................................ 33

5.3 Conclusion ............................................................................................................................... 33

5.4 Recommendations .................................................................................................................... 33

5.5 Areas for further study ............................................................................................................. 34

References ..................................................................................................................................... 35

QUESTIONNAIRE ....................................................................................................................... 38