Micro-finance institutions are leading a revolution in the financial sector, particularly
in banking. This provides a renewed focus on the way financial credit is provided to
the marginalised society of the developing countries. In the Democratic Republic of
Congo, small and medium enterprises constitute almost 80% of the entrepreneurial
population. There is therefore, considerable urgency to advance the performance
and competitiveness of these small and medium enterprises.
The aim of this study is to establish the effect of micro-finance institutions, on the
performance of small and medium enterprises in the Democratic Republic of Congo.
Literature reviewed for this study provided insights into the effects of micro-finance
institutions on the performance of small and medium enterprises that accessed
micro-loans. This study comprises of 77 small and medium entrepreneurs that
participated in the empirical research.
The performance of small and medium enterprises was assessed through the use of
a questionnaire. The questionnaire consisted of statements on socio-demographics,
the functioning of micro-finance institutions and the performance of small and
medium enterprises.
The study revealed that the largest group of respondents were male entrepreneurs,
married, in the age group category of 30 to 50 years, have a household size of 1 to 5
people and have 1 to 5 years of experience in business.
Entrepreneurs mostly utilized financial services such as saving accounts, money
transfers and training and technology. Furthermore consulting services in the areas
of leadership finance and operations were mainly received from micro-finance
institutions. The study revealed that micro-finance institutions principally play the role
of facilitator of growth, tool for social change, provider of banking systems and
instrument for empowerment to SMEs. The two sources of financing utilized mostly by small and medium enterprises were loans from micro-finance institutions and from commercial banks. The borrowed finance was used principally to start a new business, expand an existing business and for working capital. The amounts of money borrowed from micro- loans were as follow: 5 000,00 (US $) or less, between 6 000 and 10 000,00 (US $) and 11 000,00 to 15 000, 00 (US $) The interest rates paid were from 11% to 20%, 21% to 30% and 51% and above. The collateral provided was in the form of physical assets such as a car or a house.
The results of the mean score factor indicated that on average, responses for questions 14 to 19 were above 2.5 on the scale of 1 to 4. The mean score above 2.5 was the indication that respondents agreed to a larger extend to these statements.
This leads to the conclusion that overall, the effect of micro-finance institutions on the performance small and medium enterprises in the Democratic Republic of Congo was positive, as proved by the mean score factor. / MBA, North-West University, Potchefstroom Campus, 2014
| Identifer | oai:union.ndltd.org:NWUBOLOKA1/oai:dspace.nwu.ac.za:10394/11175 |
| Date | January 2014 |
| Creators | Kinimi, Lefaria Nkm-Nsong |
| Source Sets | North-West University |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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