TABLE OF CONTENTS 

APPROVAL ................................................................................................................................... ii 

DEDICATION ............................................................................................................................... iii 

ACKNOWLEDGEMENT ............................................................................................................. .iv 

TABLE OF CONTENTS ......................................................................................................... i ...... v 

LIST OF ACRONYMS (ABBREVIATIONS) ............................................................................... x 

ABSTRACT ................................................................................................................................... xi 

CHAPTER ONE .............................................................................................................................. I 

INTRODUCTION ........................................................................................................................... 1 

1.0 Introduction ............................................................................................................................ I 

1.1 Background to the Study ........................................................................................................ I 

1.1.1 Historical Perspective ......................................................................................................... 1 

1.1.2 Theoretical Perspective ....................................................................................................... 1 

1.1.3 Conceptual Perspective ....................................................................................................... 2 

1.1.4 Contextual Perspective ........................................................................................................ 3 

1.2 Statement of the Problem ....................................................................................................... 4 

1.4 Specific Objectives of the study ........................................................................................... .4 

1.5 Research Questions ................................................................................................................ 5 

1.6 Scope of the study .................................................................................................................. 5 

1.6.1 Geographical scope: ............................................................................................................ 5 

1.6.2 Content scope: ..................................................................................................................... 6 

1.6.3 Time scope: ......................................................................................................................... 6 

I. 7 Significance of the study ........................................................................................................ 6 

1.8 The Conceptual Framework ................................................................................................... ? 

...................................................................................................................................................... 7 

CHAPTER TWO ............................................................................................................................. 8 

LITERATURE REVIEW ................................................................................................................ 8 

V 

2.0 Introduction ............................................................................................................................ 8 

2.1 The concept of the interest rates ............................................................................................ 8 

2.1.1 Types of the interest. ........................................................................................................... 9 

2.1.2 Factors that detennine changes in the general level of interest rates ................................ 11 

2.2 Overview of Uganda's Financial Sector .............................................................................. 11 

2.3 Effects of rising and falling interest rates ............................................................................ 11 

2.4 Effect of interest rates on loan repayment ........................................................................... 12 

2.5 Factors that influence interest rate in commercial banks in Uganda ................................... 12 

Expected levels ofinflation .................................................................................................... 12 

Monetary policy and intervention of government ..................................................................... 14 

General economic conditions ................................................................................................. 14 

2.6 Impact of interest rates on borrowing in centenary rural development bank, Arua branch.16 

Higher interest rates have various economic effects .............................................................. 16 

2. 7 Review of Empirical Studies .............................................................................................. 18 

2.8 Summary of Literature Review ............................................................................................ 19 

2.9 Research Gap ....................................................................................................................... 20 

CHAPTER THREE ....................................................................................................................... 21 

RESEARCH METHODOLOGY .................................................................................................. 21 

3.1 Introduction .......................................................................................................................... 21 

3.2 Research design ................................................................................................................... 21 

3.3 Population of the study ........................................................................................................ 21 

3 .4 Sample size and technique ................................................................................................... 21 

3.5Data collection method ......................................................................................................... 22 

3.6Measurement of Reliability and validity ........................................................................... , .... 22 

3.6.1 Validity ............................................................................................................................. 22 

3.6.2 Reliability .......................................................................................................................... 23 

3.7 Data analysis ........................................................................................................................ 23 

3.8 Ethical consideration ............................................................................................................ 23 

3.9 Constraints faced during the Research ................................................................................. 24 

CHAPTER FOUR ......................................................................................................................... 25 

VI 

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS ............................ 25 

4.0 Introduction .......................................................................................................................... 25 

4.1 Sample Characteristics ......................................................................................................... 25 

CHAPTER FIVE ........................................................................................................................... 32 

SUMMARY, CONCLUSION AND RECOMMENDATIONS ................................................... 32 

5.1 Summary .......................................................................................................................... '. ... 32 

5.2 Major Findings ..................................................................................................................... 33 

5.3 Recomrnendations ................................................................................................................ 34 

5.4 Areas for Further Research .................................................................................................. 35 

REFERENCES .............................................................................................................................. 36 

APPENDICES ............................................................................................................................... 40 

APPENDEX 1: Questionnaire ....................................................................................................... 40 

APPENDEX 2: Questionnaire ....................................................................................................... 43