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

High Quality Publications & World Wide Indexing!

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

Volume 4 - Issue 6, June 2020 Edition
[Download Full Paper]

Kenneth Mugaiga, Patience Tugume
Financial accessibility, Managerial skills, Performance, Physical Infrastructure, Small & Micro Enterprises.
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.
[1]. Abdel, “Understanding financial information used to assess small firm performance,” Qualitative Research in Accounting & Management, 7 (2), pp. 163-179 ,2010.
[2]. Ariyo, “Small firms are the backbone of the Nigerian economy,” Africa Economic analysis, Academy of Management Journal, Vol 1, No 1, pp. 109-124, 2008.
[3]. Ariyo, “Small firms are the backbone of the Nigerian economy,” Africa Economic analysis, Academy of Management Journal, Vol 11, No 1, pp. 89-98, 2005.
[4]. Bass, Schrooten, “Relationship Banking and SMEs,” A Theoretical analysis, Small Business Economics, 27(2-3), 127-137, 2006.
[5]. Becchetti, “Credit Rationing and Credit View,” Empirical Evidence from Loan Data, SSRN Electronic Journal, 2008.
[6]. Cabral, Mata, “On the Evolution of the Firm Size Distribution: Facts and Theory,” American Economic Review, 93(4), 1075-1090, 2009
[7]. Carpenter, Petersen, “Capital Market Imperfections, High-Tech Investment, and New Equity Financing,” The Economic Journal, 112(477), F54-F72, 2002.
[8]. Cooley, Quadrini, “Financial Markets and Firm Dynamics,” American Economic Review, 91(5), 1286-1310, 2001.
[9]. Cooper, Schindler, Business research methods (1st ed.). Boston, Mass Irwin / McGraw-Hill, 2001
[10]. Dalberg, Report on Support to SMEs in Developing Countries Through Financial Intermediaries, 2011
[11]. Drever, “Opportunities and Problems in the Local Enterprise Growth Initiative,” Local Economy, 21(1), 4-12, 2006
[12]. Elston, Audretsch, “Risk attitudes, wealth and sources of entrepreneurial start-up capital,” Journal of Economic Behavior & Organization, 76(1), 82-89,2010.
[13]. Audretsch, Klepper, “Innovation, Evolution of Industry and Economic Growth,” Elgar Reference Collection, International Library of Critical Writings in Economics, Cheltenham, U.K. and Northampton, 2010
[14]. Mass.Foley, Green, Small Business Success. Liverpool Road: Paul Chapman Publishing Limited,1989.
[15]. Ghana statistical services report, 2011.
[16]. Vaart, Defining SMEs- A less imperfect way of defining SMEs in developing in developing countries, Brookings Global Economy and Development, USA, 2008
[17]. Haron, “Factors Influencing Small Medium Enterprises (SMES) in Obtaining Loan,” International Journal of Business and Social Science, 4 (15), pp. 182-195, 2013.
[18]. Havard Business School, Havard Business Review on Measuring Corporate Performance United States of America, Havard Business School Press,1998.
[19]. Hirschman, The Strategy of Economic Development, New Haven, Yale University,1958
[20]. Hisrich, Drnovsek, “Entrepreneurship and Small Business Research,” Journal of Small Business and Enterprise Development, 9 (2), pp. 172-222, 2002.
[21]. IMF. External Relations Dept., 2003.
[22]. Kayanula, Quartey, The Policy Environment for Promoting Small and Medium sized Enterprises in Ghana and Malawi, 2009.
[23]. Kessides, “The Contributions of Infrastructure to Economic Development,” A Review of Experience and Policy Implications, Washington, DC: The World Bank, Discussion Paper No. 213, 1993.
[24]. Kotler, Armstrong, Principles of marketing (1st ed.). Harlow: Prentice Hall, 2015.
[25]. Martin, Staines, “Managerial competencies in small firm,” Journal of Management Development, 13 (7), pp. 23-34, 2008.
[26]. Mazanai, Fatoki, “Financial accessibility in the SME Sector,” A South African Perspective, Asian Journal of Business Management, 4 (1), pp. 58-67, 2012.
[27]. McCormick, Dorothy, Dissertation on SME and GDP in Kenya, Nairobi, 1998.
[28]. McCormick, Pedersen, Small Enterprises: Flexibility and Networking in African Context: Nairobi: Institute for Development Studies (IDS), University of Nairobi and Centre for Development Research (CRD) Copenhagen, 1996.
[29]. Moreno, Casillas, “High-growth SMEs versus non-high-growth SMEs,” a discriminant analysis. Entrepreneurship and Regional Development, 19(1), 69-88, 2007.
[30]. Nichter, Goldmark, “Small Firm Growth in Developing Countries,” World Development, 37(9), 1453-1464, 2009.
[31]. Obadan, “Globalization: Elements, Opportunities Challenges and Risks”, a Paper Presented at the Eleventh DPRS Directors Conference, Organized by NCEMA, in Ibadan, 21 – 25 June,2004.
[32]. Republic of Kenya Sessional paper No. 2 of 1992.
[33]. Rwigema, Venter, Advanced entrepreneurship (1st ed.). Oxford: Oxford University Press Schneider ,2004
[34]. Tsauni, “Economic Reform in Nigeria, A Critical Analysis, (1999 – 2004)”,2006.
[35]. Publication of the Department of Economics, Bayero University, Kano- Nigeria, Vol 1 No 1
[36]. Tustin, Small business skills audit in peri-urban areas of Northern Tshwane (1st ed.). Pretoria: Bureau of Market Research, University of South Africa, 2003.
[37]. Uganda Bureau of Statistics statistical report, July- September, Vol. 1, 2010.
[38]. Uganda National Housing Population Census, Vol 1 pg 132, 2010.
[39]. Uganda National Housing Survey Report, 2017
[40]. World Bank, “SME”, World Bank Group Review of Small Business Activities,” Washington D.C, World Bank, 2002.
[41]. World Bank, “Small and Medium Enterprises, Review of Small Business Activities,” Washington, DC: World Bank, 2004.