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Micro finance Institutions in Uganda seek to provide clients from poor households with a range of money management and banking services. Micro finance is important to the well being of the society because it improves on the welfare, wealth and general standards of living for those people involved in micro finance activities. Despite Micro Finance Institutions effort to support the low income earners by providing financial services, a high rate of clients drop out has persisted. The problem arising out of these excessive levels of client dropout is that they are likely to have negative effects on the financial performance of Micro Finance Institutions.

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