BUDGETARY CONTROL AND FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS IN UGANDA: A CASE STUDY OF PRIDE MICROFINANCE LIMITED, BUSHENYI DISTRICT

ABSTRACT

The study was to establish the effect of budgeting on the financial performance of microfinance institutions in Uganda. Objectives of the study were; to assess the role of budgetary control on the financial performance of microfinance institutions in Uganda, to find out whether budgetary control is a measure of financial performance of microfinance institutions in Uganda and to establish the relationship between budgetary control andfinancial performance of microfinance institutions in Uganda. The study population included company workers from departments of Human Resource, Procurement, Marketing, Operations and Finance department. The qualitative research design was employed. The sample size comprised of a representative sample of 60(52) employees in total with a sample selection from the human resource, procurement, operations, marketing and finance departments. The researcher recommended that embracing external completion in order to promote innovation by not protecting local microfinance institutions, Societies support for microfinance institutions should be continued because support is critical in improving motivation for potential investors and the government should give tax holidays to emerging microfinance institutions to encourage many people to open up their own microfinance institutions.

TABLE OF CONTENTS

DECLARATION .1

APPROVAL

DEDICATION

ACKNOWLEDGEMENT

LIST OF TABLES

LIST OF FIGURES

LIST OF ACRONYMS

ABSTRACT

CHAPTER ONE 1

INTRODUCTION 1

1 .0 Introduction 1

1.1 Background to the study 1

1.1.1 Historical perspective 1.

1.1.2 Conceptual perspective 2

1 .1.3 Theoretical perspective 2

1.2 Statement of the problem 4

1.3 Purpose of the study 5

1.4 Specific objectives of the study s

1.5 Research Questions 6

1.6 Research Hypotheses 6

1.7 Scope of study 6

1.7.2 Content Scope 6

1.7.3 Time Scope 7

1.8 Significance of the study 7

1.9 Operational definitions of Terms 7

CHAPTER TWO 9

LITERATURE REVIEW 9

2.0 Introduction 9

2.1 Theoretical Review g

V

2.2 Conceptual Review .10

2.3 Review of Related Literature 11

2.3.1 Budget and budgeting ii

2.3.2 Ethical Issues in Budgeting 14

2.3.3 Budget Relative to Time 14

2.4 Empirical Review 15

2.4.1 Roles of Budgeting 15

2.4.2 Functions of a Budget 18

2.4.3 Budgeting as a measure of financial performance 19

2.4.4 The relationship between budgetary control and financial performance 20

2.5 Research Gaps 21

CHAPTER THREE 22

METHODOLOGY 22

3.0 Introduction 22

3.1 Research design 22

3.2 Area of the study 22

3.3 Population of the study 23

3.4 Sample size 23

3.5 Sources of data 24

3.5.1 Primary data 24

3.5.2 Secondary data 24

3.6 Research tools 25

3.7 Data analysis and Presentation 25

3.7.1 Data analysis 25

3.8 Presentation of data 26

3.9 Validity and Reliability of instruments 26

3.9.1 Validity of instruments 26

3.9.2 Reliability of Instruments 26

3.10 Ethical Considerations 27