Micro Finance and Poverty Alleviation in Uganda: A case study of Hofokam and Pride Micro Finance Limited Hoima Municipality.

Abstract

The study examined the effect of micro financing on poverty alleviation in Uganda taking a case study of HOFOKAM and Pride Microfinance Limited Hoima branches. The objectives were to examine the effect of group-lending, individual loans, agricultural credit on poverty alleviation in Hoima Municipality. The study was underpinned by Macro-to Microeconomic Theory. The study population was 400 where a sample size of 196 was selected and of these respondents, 167 responded (85.2% response rate). Data was collected using self-administered questionnaires, focus group discussion and analysed using SPSS. The findings confirmed that there is a positive relationship between Group-Lending and Poverty Alleviation (r=0.358**). Individual lending had a correlation of (r=0.441**) and agricultural credit had r=0.323**. The study concluded that social – capital - based group loans are good for poverty alleviation, it was also concluded that crop farming loans have improved incomes. The recommendations are that HOFOKAM and Pride Microfinance Ltd should continue and where possible encourage group lending; it continues to offer individual loans to business enterprises, and should increase agricultural credit so that many other individuals or groups benefit from the scheme. This required a lot of sensitisation and awareness to the intended beneficiaries through radio programmes among others