The role of savings and loans institutions in financing SME’s: A case of Utrak Savings and Loans Limited
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Date
AUGUST, 2015.
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Abstract
This study sought to assess the role of saving and loans institutions in financing SMEs using Utrak Savings and Loans Co. Ltd as a case study. The study employs questionnaire designed to cover major aspects of the roles played by Savings and loans companies towards the financing of SMEs. Fifty clients and five staff of Utrak Savings and Loans Co. Ltd were selected for the study. The analysis revealed that business registration certificate is mostly the main document requested by Utrak savings and loans ltd during a loan application process. Other documents that are requested according to the analysis, include Management accounts, Business plan, financial statements, Appraisal of assets to be financed and Resolution to open an account. The analysis also revealed that Utrak savings and loans ltd has rejected some loan applications in past due to several reasons such as lack of collateral security by clients and poor credit experience or history of clients among others. It was however revealed in the analysis that the major problem that SMEs encounter in securing for funding from Utrak savings and loans ltd is their lack of collateral security. The analysis also revealed that the major impact that the financial support from Utrak savings and loans ltd has on SMEs business performance is that it has helped their businesses to grow and expand into big businesses. The results from the analysis also indicated that the financial support that SMEs receive from Utrak savings and loans ltd has helped them to increase their business assets and working capital which has resulted in smooth operation of their businesses and an increase in profit of their businesses. The results from the research also revealed that the policies that are put in place by Utrak to ensure quick recovery of loans from clients are daily collection of repayments from clients, routine customer visit and constant communication with clients as well as management advice to customers.
Description
A thesis submitted to the department of Accounting and Finance, School of Business, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirements for the degree of Master of Business Administration (Finance),