Effects of Microfinance Services on Clients’ Socio-Economic Status: A Case of Community Development Microcredit Finance Company Limited (Cdm) in Busika, Kalagala, Luwero District, Uganda

Abstract

Generally, the study aimed to determine the effects of CDM’s microfinance services on clients’ socio-economic status. This study covered 50 clients. These were selected through a simple random sampling method from a list of active and inactive beneficiaries of Community Development Micro-credit (CDM) finance company implemented by Francis Atuhaire in Busika, Kalagala sub-county, Luwero district, Uganda. Using the Input - Process - Effect Model (IPE) of Weiss (1972) modified to suit the purpose of this research, where the qualitative and descriptive design was adopted. More than half of the respondents (56%) were male. With the mean age of 36. The majority were (66%) married, while, 72.0 percent were engaged in the non-business occupation. Clients have agreed that their attitude towards debt does not affect them on acquiring loans from CDM with the highest mean of 4.10 of highly favorable description clients value debt as an important thing which should be paid back and with an overall mean of 3.72. CDM services which include: loan amount, collateral interest rate loan period, and capability building, the findings of the study have indicated with the overall mean of 3.65 that CDM finance services have increased clients’ income and also helped them to provide with the needs to their families. The study revealed the highest mean of 3.56 indicating that the system of group security for clients in accessing loans is difficult to comply with, and with an overall mean of 3.25 clients rated the demand of collateral fair.It was observed that loans give clients the opportunity to be able to provide for their families, this was revealed with the highest mean score of 3.96 and the overall mean of 3.81 with a description of agreement that they have achieved for their family basic needs and they have become more stable than before. There is an effect on health. At least some clients have been able to visit the health center because of the benefits from the company though they don’t have savings for emergencies. The study found out that age and education attainment is very important characteristics of the clients as a key in the successful loaning scheme. Mature people are more knowledgeable in terms of the experience of acquiring loans and they participate better in training and seminars conducted by CDM.