Effects of Micro Finance Institutions on Poverty Reduction in Uganda. A Case Study of Pride Micro Finance Mukono.
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Date
2025-05-13
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Uganda Christian University
Abstract
This study examines the effects of microfinance institutions (MFIs) on poverty reduction in Uganda, with a specific focus on Pride Microfinance Mukono. Microfinance has emerged as a key tool in improving financial inclusion, offering credit, savings, and financial education to underserved populations. Despite the presence of microfinance institutions, poverty remains a significant challenge in Uganda, prompting the need to assess the true impact of MFIs on economic empowerment. Using a mixed-method approach that combines qualitative and quantitative analysis, this research evaluates the effectiveness of microfinance services, their contribution to poverty alleviation, and the challenges faced by clients. Findings indicate that microfinance enhances financial stability by increasing access to capital, supporting
entrepreneurship, and improving household incomes. However, issues such as high-interest rates, limited financial literacy, and difficulties in loan repayment hinder the full realization of its benefits. The study emphasizes the importance of tailoring microfinance services to meet client needs and implementing policies that foster sustainable financial inclusion. This research contributes to the ongoing discourse on microfinance as a mechanism for economic development and offers insights for policymakers, financial institutions, and development practitioners aiming to strengthen poverty reduction strategies in Uganda.
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Undergraduate