Factors Influencing demand for money in the business sector case study: Macdough Foods Uganda Limited

Abstract

The intention of this research was to determine the factors that influence demand for money in the business sector, the case study of Macdough foods Uganda limited. The general research objective was to determine the factors influencing demand for money having specific objectives like; to determine the effect of interest rate on demand of money, to investigate the relationship between investment climate and demand for money, to find out how the demand for a product influences demand for money in Macdough foods Uganda limited with the respective questions. The research had a sample population size of 105 respondents. The study employed a case study research design and methodology that was used in this study. Questionnaires and documentary review were the major tools of data collection. The data collected was analyzed; carefully classified edited basing on clarity, completeness, accuracy and consistencies then thereafter the conclusion were drawn from the findings. According to the findings, it was found out that the company pays high interest rates which greatly affected the company's demand for money. The study also further showed that the level of investment reduced due to the high interest rates imposed on the loans by the financial institutions and finally the researcher found out that the demand of a product is greatly affected by the price of the product. It was concluded that, interest rates have a negative effect on demand for money, investment climate has a positive relationship with demand for money and finally the demand of a product has positively influenced demand for money in the company. In the recommendations, the company managers should endeavor to attend to business skills and loan servicing short training workshops if they are to meet their objectives and from the findings, the researcher proposed that all financial institutions should revise their interest rates to such amount afford able by people and companies of different economic level.