Microfinance Intervention And Poverty Reduction In Uganda: A Case Of Moroto District

ABSTRACT

This study investigated the impact of microfinance intervention on poverty reduction in Moroto

district. The following objectives guided the study: i) to examine the various microfinance

services provided by MFls to the beneficiaries in Moroto district; ii) to establish the effects of

microtinance interventions on poverty reduction among the beneficiaries in Moroto district; iii)

to examine the relationship between microfinance services and poverty reduction in Moroto

district.

This study employed a descriptive survey design. A sample size of 108 respondents fi·om among

microlinance beneficiaries was determined using Krejcie and Morgan table (1970 from a target

population of !50 participants. The research instrument used was questionnaires while

quantitative data was analyzed using SPSS data editor version 17.0. Pearson correlation

coefficiency was used to determine the relationship between microfinance intervention and

poverty reduction.

The study established that between the two microfinance institutions surveyed in Moroto district,

both of them had loans, savings and insurance as some of their services to their clients.

Furthermore, the study findings revealed that microfinance intervention had to a lesser extent

reduced poverty among the beneficiat"ies. In addition to that, there was a significant positive

correlation between microfinance intervention and poverty reduction (1=.694, p>.032).

The study concluded that loans, savings and insurance are components of micro finance and that

microtinance services significantly in11uence poverty reduction. However it was argued that

microlinance services are more e!Tective when combined with entrepreneurial skills.

Furthermore, microfinance intervention improved and increased income of the beneficiaries thus

improving their housing facilities and having adequate food for consumption, however it did not

stop them from being vulnerable to illness. The study recommended that there is need for

microtinance institutions to put in place loan products that allow individual borrowing. This

would encourage more borrowing since sometimes it is very difficulty to form groups to borrow

a loan in rural areas among the illiterates. There is also need lor the microfinance institutions to

provide different types of loans that covers education loans so that the beneficiaries can educate their household members.