Key Features:

No of Pages: 35

Buy Now

Introduction:

An overwhelming majority of the world population is considered to be poor. Various approaches have been employed in alleviating poverty, including provision of micro-credit to the poor populace. It is believed that with micro-credit, the poor will set up income generating projects, in, this case SMEs.

In the past, SMEs were seen to be constrained by the high interest rates charged on credit accessed which is the commonly available source of income for their startup and sustainability,Olu, (2009). With the modern approach according to Stone et al (2005), micro-credit had been put at the Centre of SME promotion for the poor, with concerted effort from governments,financial institutions, international bodies like UN, and donor groups.

Here in Uganda, micro credit institutions like SACCOs are not charged with taxes for their operations as a way of enabling them charge favorable interest rates to the poor(SME operators) for their personal and enterprise growth. Therefore, the focus of the study was to establish the effect of interest rates charged on credit tothe growth of Small and Medium Enterprises.