BANK LOANS FOR SMALL AND MEDIUM ENTERPREISES GROWTH

Abstract

This research titled” bank loans and Small and Medium Enterprises (SMEs) growth a case of Urwego opportunity bank Gasabo District, intended to analyze impact of bank loans on small and medium enterprise growth. SMEs are the drive for economic growth in most countries. This study analyzed impact of loans on SMEs in Urwego Opportunity Bank, this the ability of SMEs to develop positively economic growth with Urwego Opportunity Bank would become real. The data processing and editing were done with the use of SPSS and Ms excel. The targeted population was 100 split into different department of the bank and the sample population was equal 80 respondents. The sample population of the research was calculated using Taro Mane’s Formula. The outcomes of this study will be of much significance to institutions of higher learning, financial institutions, researchers, students and investors to reshape their organizational status. A questionnaire survey was adopted to obtain information from respondents. Descriptive statistics which include percentage, graphs, pie charts and illustration were used in presenting and analyzing information. Results revealed that most of SMEs profited from loans even though only few of them were able to secure necessary amount. Findings showed that, for the number of facilities offered by the banks, there are some the clients enjoyed most as these facilities boosted their businesses as well as their welfare. These facilities included among others, working capital, the term loan, the overdrafts advice among others. The research also found out that there was a raised level of access to finance by SMEs. It indicated that 90% have Bank loan and 10% do not. It could be inferred from the responses of the 90% customers that have loan, evidenced from past studies and overview all supporting that many begin organizations decrease on banks for finance Interestingly, many SMEs recognize positive role of bank loan towards increasing growth and earnings and sales, exposing them into high level of competitiveness. It was recommendation that banking institutions have to revise interest rate and allot suitable strategies for more development of SMEs in Rwanda.