ASSESSING THE ROLE OF MICRO FINANCE INSTITUTIONS’ PRODUCTS ON THE GROWTH OF SMALL MEDIUM ENTERPRISES IN MALAWI-A CASE STUDY OF AREA 25 SMES

This study assessed the role of micro finance institutions’ products on the growth of small medium enterprises in malawi-a case study of area 25 smes.A case study design was used to obtain data on the thoughts of SMEs in the area
A qualitative research approach was used to gain understanding of underlying reasons and opinions of the respondents. This method was applied because of its convenience and reliability in collecting data in the study.
Descriptive statistics were used to interpret demographic characteristics and the research objectives, mainly through frequencies and percentages. Frequency tables, graphs, and charts will be generated using Microsoft Excel 2007 to present the collected data in a concise and easily understandable form. Frequencies and percentages were further applied during tabulation to display statistics used for analyzing and interpreting the findings.
Quantitative data was analyzed mathematically through the arrangement of responses in tables, using descriptive statistical methods such as frequency distribution and tabulation. For the qualitative component, a thematic analysis approach was adopted. This method involves examining narrative responses, identifying recurring ideas, grouping related concepts into themes, and deriving major points that reflect respondents’ views. The thematic approach was provided deeper insight into the underlying patterns and perspectives expressed in the qualitative data.
The study found that the utilization of microfinance services and repayment of loans by SMEs in Area 25, Lilongwe, is influenced by a mix of internal business elements, external economic forces, and institutional procedures. It is demonstrated in the findings that long procedures involved in seeking loans, the use of collateral, high interest rates, lack of financial literacy, and seasonality are major elements that impact the ability of SMEs to utilize loans. Furthermore, poor financial management practices, as measured by the absence of financial records, poor budgets, the blurring of business and household finances, and the lack of cash flow analysis, also impact the successful repayment of loans and business performance.