International Journal of Advanced Research and Publications (2456-9992)

Factors Affecting The Performance Of Small And Micro Enterprises In Rukiri Sub-County Ibanda District, Uganda

Volume 4 - Issue 6, June 2020 Edition
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Author(s)
Kenneth Mugaiga, Patience Tugume
Keywords
Financial accessibility, Managerial skills, Performance, Physical Infrastructure, Small & Micro Enterprises.
Abstract
The importance of Small and Micro Enterprises (SMEs) in contributing to job creation and increased output is widely accepted in both developed and developing countries. Of particular interest is the process of expansion of these enterprises from very micro into small scale size, that they make tangible contribution to economic growth and job creation. However, in Uganda and other less developed countries (LDCs), there is evidence of a shortage of Small-sized growth-oriented SMEs that could make an important contribution to development. This is generally attributed to hidden and largely inadvertent biases in the economic policies of these countries that militate against the gradual and organic growth of their enterprises. This study assessed the factors that affect the performance of Small and Micro Enterprises (SMEs) in Rukiri Sub-county Ibanda District Uganda. The aim of this study was to provide the business owners in the locality with information on starting and managing their Small and Micro Enterprises by creating awareness on the factors that affect performance and sustainable management of SMEs. The factors tested were: Business characteristics, Managerial skills, financial accessibility and physical infrastructures. A descriptive and correlational research design using both descriptive and analytical methods were applied during the study. The study was conducted in Rukiri sub-county parishes of Bwenda, Rukiri, Katembe, and Mpunda. A sample size of 101 SMEs was selected using a purposive stratified random sampling technique. There was a positive correlation between; Physical infrastructure and SMEs performance (r=0.507, p<0.05 financial accessibility and SMEs performance (r= 0.462 p<0.05) and between managerial skills and performance of SMEs (r= 0.396 p<0.05). The independent variables significantly explained 60.7% of the variations in the dependent variable at 0.05% The study, recommends training for SMEs owners and establishment of free interest loans or grants with minimal conditions of access since most SMEs lack collateral security.
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