ABSTRACT:

The study was designed to enable us know the effect of Micro Finance towards Poverty alleviation, credit policy of Micro Finance on the very poor. The study was to establish the impact of micro finance towards poverty alleviation and its performance on the very poor, the weaknesses of interest rate, loan size, short and frequent payment schedules, imposed by micro finance to its clients and difficulties encountered by micro finance institutions. The study was conducted in Kampala District Nakawa Division Luzira Parish Kisenyi One Village. The study was guided by research questions. What are the techniques used to determine the very poor people? The survey was designed approach both secondary and primary data were used. The samples used include small groups, clients, employees and management of officials of Micro Finance Institution. Data was collected using questionnaires and interviews. Data was analyzed using frequency table, percentage and content analysis. The findings of the study were micro finance credit or loans boosted performance Micro finance Scheme, as well as household incomes, favourable interest rates, short and frequent payments schedules. Loan size limits business operation and lack of collateral security limit access to loan or credit. Further research should be carried out on factors limiting the operations of MFis towards poverty alleviation.