The Effect of Micro Finance Institutions on People's Incomes in Kanungu District: A Case of Kihiihi Savings and Credit Cooperative Society Limited

TABLE OF CONTENTS

DECLARATION ....................................................................................................................... .ii

APPROVAL .............................................................................................................................. iii

DEDICATION ........................................................................................................................... iv

ACKNOWLEDGEMENT .......................................................................................................... v

TABLE OF CONTENTS ........................................................................................................... vi

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

LIST OF ABRIVIATIONS AND ACRONYMES ....................................................................... x

DEFINITION OF KEY TERMS ................................................................................................ xi

ABSTRACT ............................................................................................................................. xii

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

INTRODUCTION ...................................................................................................................... 1

1. 0Background to the Study .................................................................................................... 1

1.1 Statement of the Problem .................................................................................................. 2

1.2 Objectives of the Study ..................................................................................................... 3

1.3 Scope of the Study ............................................................................................................ 3

1.4 Significance of the Study ................................................................................................... 3

1. 5 Research Questions .......................................................................................................... 4

1. 6 Limitations of the Study ................................................................................................... .4

1. 7 Conceptual Framework ..................................................................................................... 5

CHAPTER TWO ........................................................................................................................ 6

LITERATURE REVIEW ............................................................................................................ 6

2.0 Introduction ....................................................................................................................... 6

2.1 The Concept of Micro finance ........................................................................................... 6

2.2 Objectives ofMicro Finance Institutions ........................................................................... 6

2.3 The Nature of Clients Served by Micro Finance Institutions .............................................. 7

2.4 Services offered by Micro Finance Institutions ................................................................. 7

2.4.1 Credit provisions ........................................................................................................ 7

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2.4.2 Capacity Building and Training .................................................................................. 8

2.4.3 Insurance services ....................................................................................................... 8

2.4.4 Social services ............................................................................................................ 9

2.4.5 Savings Mobilization .................................................................................................. 9

2.5 Effects of the Activities of Micro finance institutions ........................................................ 9

2.5. l Social Effects ........................................................................................................... 10

2.5.2 Empowerment of Women ......................................................................................... 10

2.5.3 Micro Finance and Youth Empowerment .................................................................. 10

2.5.4 Economic Effects .................................................................................................... 11

CHAPTER THREE .................................................................................................................. 13

METHODOLOGY ................................................................................................................... 13

3.0 Introduction ..................................................................................................................... 13

3 .1 Research Design .............................................................................................................. 13

3 .2 Study Area and Population .............................................................................................. 13

3.3 Sampling Design ............................................................................................................. 13

3.4 Data collection Instruments ............................................................................................. 14

3. 5 Data processing and analysis ........................................................................................... 15

3.6 Procedures of Data Collection ......................................................................................... 15

CHAPTER FOUR .................................................................................................................... 16

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA ................................... 16

4.0 Introduction ..................................................................................................................... 16

4.1 Presentation offindings ................................................................................................... 16

4.1. l Bio data of respondents ............................................................................................ 16

4.1.2 Nature of clients ofKihiihi savings and credit cooperative society ltd ....................... 17

4. l.3The Genesis ofKSCCS limited .................................................................................. 18

4.1.4 Forms of collateral security required from clients ..................................................... 18

4. 1.5 How KSCCS Clients use their loans ......................................................................... 18

4.1.6 Client retention rate by KSCCS ................................................................................ 18

4.2 Analysis and interpretation of findings ............................................................................ 19

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4 .2.1 The nature of clients served by KSCCS limited ........................................................ 19

4.2.2 Pre-qualification for accessing KSCCS financial services ......................................... 19

4.2.3 Effects ofKSCCS services on the local people's income .......................................... 19

CHAPTER FIVE ...................................................................................................................... 21

SUMMARY, CONCLUSION AND RECOMMENDATIONS ................................................. 21

5. 0 Introduction ..................................................................................................................... 21

5.1 Summary ......................................................................................................................... 21

5.2 Conclusions ..................................................................................................................... 22

5.3 Recommendations ........................................................................................................... 22

5 .4 Areas of further study ...................................................................................................... 23

REFERENCES ......................................................................................................................... 24

APPENDIX A .......................................................................................................................... 26

QUESTIONNAIRE(S) .......................................................................................................... 26

INTERVIEW GUIDE. .............................................................................................................. 28

ABSTRACT

This study was undertaken with aim of finding out the effects of microfinance institutions on people's incomes. Information gathering were done basing on primary source to get balanced information. For this to be achieved, the researcher following the background of the study, used secondary data by reviewing literature of other peoples on the topics related MFls; and also used primary data to get current issues at hand, where he used questionnaire and interview guide to get relevant information. Purposive, Quota and snowball were used to in order to get generalized information Presentation, analysis and interpretation of data was done by the use of tables as they are indicated The institutions offer short loans to people; gives loans advice to people, train people on how to use the loans. Improved standard of eating habits, children go to good schools, health people and community, and improved housing. Other sources of incomes of clients of KSCCS included coffee growing, animal keeping, and commercial tree planting. The findings indicated positive impact on peoples' income as is indicated by; the improved health community, improved meals; children go to good schools and many other indicators of positive change on peoples' livelihood. All categories of poor men, women, and the youth qualify for the loan after forming groups of more than five people; or if a collateral security is presented for the case of individual loaning The work is organized in a logical order from chapter one to chapter five. Chapter one contains the background of the study; problem statement; objective of the study; scope of the study; significance of the study; research question; limitations of the study and a conceptual frame work. Chapter two contains the review of related literature, chapter three the methodology employed in data collection process, chapter four contains the presentation, analysis and interpretation of data and lastly chapter five containing summary; conclusion; recommendations and area for further study.