Micro Finance Institutions And The Growth Of Small And Medium Scale Enterprises. A Case Study: Kagadi Town Council-uganda.

ABSTRACT The study was carried out to examine whether microfinance institutions have a significant effect - - on the growth of small and medium scale business in Kagadi town council, Kagadi district. The study was guided by the following objectives: To identify the different microfinance services offered to small scale businesses, to find out whether small scale businesses are growing in Kagadi town council and to find out the relationship benyeen microfinanc~ institutions and small and medium_scale business Enterprises. The researcher used a descriptive research design to investigate the impact of micro finance institutions towards small and medium scale business growth. The study used simple random sampling to select respondents to participate in the study. The researcher used questionnaires to collect data from 60 respondents. Findings revealed that microfinance institutions are among the forms of banking institutions thaf do exist and contribute to the growth of small and medium scale businesses. Among the services offered by micro finance institutions include increase in disposable income and that business enterprises had improved also improving others, also there has been reduction in income inequality so there is a big relationship between micro finance institutions and small scale businesses by bQosting them leading to development of small scale business. The researcher came up with the following recommendations: i. Micro finance institutions which lack funds should go ahead and borrow from well off banks so that they can continue giving out their services to small businesses in the areas so that they can be helped to grow well/ develop. ii. The government should "come up and put a hand in the upcorhing micro finance institutions such that they can deliver their services well especially when it comes on the point of contributing to the growth of the small scale businesses. This can be done by giving some money to these micro finance institutions. iii. The public should be sensitized ·on the roles played by micro finance institutions in the delivering of their services.