Access to Micro-Credit and the Growth of Small and Medium Enterprises (Smes) In Uganda

Abstract

The purpose of the study was to establish the relationship between access o micro credit and the growth of small and medium scale enterprises in Uganda.

The study was guided by the following research objectives; to examine access to micro credit and the growth of small and medium enterprises in Uganda, to examine the rate of growth of SMEs accusing micro credit facilities in Uganda and to establish the relationship between access to micro credit and growth of SMEs in Uganda.

The study was a cross sectional survey with respondents comprising of small enterprises’ owners, employees from lending institutions and SMEs, workers as well as customers. Persons from government agencies like USSA and UIA were also selected for this study. The data was collected using self administered questionnaires within the confines of Kampala- industrial area. The data was analyzed using frequency tables and charts spearman rank correlation was used to establish the relation between the study variables.

Results of the study showed there was a significant positive relationship between

access to micro credit and the growth of SMEs in Uganda.

The researcher recommends that SMEs owners should acknowledge the contribution of credit facilities towards the growth of their enterprises and thus should devise means to overcome the challenges of inadequate collateral a high rates of interest entrenched in accusing credit facilities from micro credit lending institutions targeting at SMEs as their niche should also soften their lending terms. This is likely to increase access to micro credit facilities and accelerate sustainable growth of SMEs