Access to Finance and Performance of Small and Medium Enterprises in Uganda: A Case of Selected Smes in Kabale Municipality
The study investigated access to finance and performance of small and medium enterprises in Uganda: a case of selected SMEs in Kabale Municipality, the objectives of the study were: to find out the influence of cost of credit on access to finance and performance; collaterals security on access to finance and performance; effect of information access to finance on performance; and accessibility of financial institutions on access to finance and performance of SMEs in Kabale municipality. The study was guided by Contingency Theory. The study employed a descriptive study design and a cross-sectional was also used. The study used a respondent sample of 338 SMEs operating in Kabale Municipality. The study findings in respect of the main objectives indicated that access to finance influences performance of small and medium enterprises in Uganda. The results also indicate that interest rates affect borrowing of SMEs. The study results on how the respondents normally accessed information, the higher number of respondents stated that they accessed information from other clients while the least number of respondents stated that they accessed information from local dailies. From the study findings on financial institutions the respondents commonly accessed, the largest number of respondents revealed that the commonly accessed group savings where the least number of respondents mentioned that they accessed SACCOs. From the study findings on the distribution channels the financial institutions used to reach the customers, the highest number of respondents mentioned customer visits, while the least number of respondents mentioned staff visits. The study concluded that there is significant relationship between access to finance and performance of small-scale enterprises. The study recommended that the government should strengthen fiscal policies promoting the growth of small business entrepreneurs both for those nursing business ideas and those already in different engagements. Financial institutions should also modify their products to suit the financial requirements of small business entrepreneurs; and the entire financial sector should develop in-house training policies geared towards equipping the beneficiaries with credit management skills.
A Dissertation Submitted to the Directorate of Postgraduate training in Partial Fulfilment of the Requirement for the Degree Award of a Master in Business Administration of Kabale University
Access to Finance , Performance, Small and Medium Enterprises.