COMMERCIAL BANKS SERVICES AND ECONOMIC DEVELOPMENT. A CASE STUDY OF BANK OF BARODA KANSANGA BRANCH, KAMPALA, UGANDA

TABLE OF CONTENTS

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

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

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

ACKNOWLEDGEMENTS ........................................................................................... iv

ABSTRACT ..................................................................................................................... ix

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

1.0 Introduction ............................................................................................................... 1

1.1 Background of the study ........................................................................................... 2

1.2 Statement of the problem .......................................................................................... 3

1.2 Purpose of the study ................................................................................................... 3

1.3 Objectives of the study .............................................................................................. 4

1.5 Research questions ..................................................................................................... 4

1.6 Scope of the study ..................................................................................................... 4

1.6.1 Geographical scope ................................................................................................. 4

1.6.2 Content scope .......................................................................................................... 4

1.6.3 Time scope ............................................................................................................... 4

1.7 Significance of the study ............................................................................................ 5

1.8 Conceptual Framework ............................................................................................. 5

CHAPTER TWO ............................................................................................................. 7

LITERATURE REVIEW ............................................................................................... 7

2.0 Introduction .................................................................

2.1 commercial banks outreach ...................................................................................... 7

2.2 The commercial banks services ................................................................................ 8

2.2.1 Loans ........................................................................................................................ 9

2.2.2 Bank accounts ........................................................................................................ 10

2.3 Concept of Economic development. ....................................................................... 11

2.3.1 Development in Uganda: Trends and patterns .................................................. 11

2.3.2 Income, development and equality ...................................................................... 11

2.3.4 Factors that delay economic development .......................................................... 13

2.4 Clients and impact of commercial banks services ................................................ 13

2.4.1 Reduced vulnerability to economic risks ............................................................ 14

2.4.2 Strengthening linkages of clients and their households to the agricultural sector ............................... 15

2.4.5 Advice on how to use obtained funds .................................................................. 15

2.4.6 Reduction of income inequality ........................................................................... 15

2.4.7 Economic Development ........................................................................................ 15

2.4.8 Increased investment, savings and schemes ....................................................... 16

2.4.9 Education and Health ........................................................................................... 16

2.4.10 Development of small-scale enterprises ............................................................ 17

2.5 Government Interventions in the commercial banks ........................................... 17

2.6 When commercial banks becomes less efficient .................................................... 19

2.7 Challenges faced by commercial banks in their efforts to attain economic

development in Uganda ................................................................................................. 20

CHAPTER THREE ....................................................................................................... 21

RESEARCH METHODOLOGY ................................................................................. 21

3.0 INTRODUCTION .................................................................................................... 21

3.1 Research design ........................................................................................................ 21

3.2 Research population ................................................................................................ 21

3.3 Sampling procedure ................................................................................................. 21

3.3.1 Simple random sampling ...................................................................................... 21

3.3.2 Systematic random sampling ............................................................................... 21

3.4 Sample size .............................................................................................................. 22

3.5.0 Research Instruments ........................................................................................... 22

3.5.1 Observation ........................................................................................................... 22

3.5.2 Questionnaire ........................................................................................................ 22

3.5.3 Interviews ............................................................................................................... 22

3.5.4 Documentary Review ............................................................................................ 23

3.6 Data processing and analysis .................................................................................. 23

3. 7 Limitations of the study ........................................................................................... 23

CHAPTER FOUR .......................................................................................................... 24

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS ..................... 24

4.0 lntroduction .............................................................................................................. 24

4.1 Demographic responses ........................................................................................... 24

4.2 Commercial banks services and programs ............................................................ 27

4.3 Impact of commercial banks services on economic development ....................... 29

4.4 Review of credit terms on loans offered by BARODA BANK (U) ..................... 31

4.5 Challenges faced by BARODA BANK (U) in their effort to attain economic development .............................. 32

CHAPTER FIVE ........................................................................................................... 33

SUMMARY OF MAJOR FINDINGS, CONCLUSION AND

RECOMMENDATIONS ............................................................................................... 33

5.1 Summary of the findings .................................................................................... 33

5.2 Conclusion ........................................................................................................... 34

5.3 Recommendations ............................................................................................... 35

5.4 Areas of Future Research ................................................................................... 36

REFERENCES ............................................................................................................... 37

APPENDICIES .............................................................................................................. 39

Appendix A: RESEARCH INSTRUMENTS .............................................................. 39

APPENDIX 1: RESEACH QUESTIONNAIRE ......................................................... 39

APPENDIX 11: INTERVIEW GUIDE ........................................................................ 43

APPENDIX B ................................................................................................................. 44

TIME FRAME OF THE STUDY ................................................................................. 44

APPENDIX C ................................................................................................................. 45

ITEM: BUDGET FOR THE STUDY .......................................................................... 45 

ABSTRACT 

The study was set to analyze the relationship between commercial banks services and economic development in Uganda. The case study was BARODA BANK Kansanga Branch. The purpose of the study was to examine the relationship between various commercial banks services and economic development in Uganda. The objectives of the study were to establish the impact of commercial banks services offered by commercial banks institutions in Uganda. The study utilized descriptive research design which involved quantitative techniques of data collection. The total population was 80 members. The sample size of 76 was taken as a representative sample of members of BARODA BANK Kansanga Branch. The findings of the study revealed that household incomes have increased for clients of commercial banks institutions than those who are not clients. Similarly clients have been in position to own consumer durables and are in condition to live an improved standard of living. The research recommends that commercial banks in Uganda should design client responsive products, introduce client exit surveys, have group guarantee systems, encourage loan restricting, train credit officers, credit reference, charge customer friendly interests rates and increase in loan terms. The researcher concluded that the services offered by commercial banks have a positive impact on the client who access those services since their standards of living is improved and they are able to establish small scale businesses as a result of accessed loans.