Credit Financing and Performance of Small and Medium Enterprises (Smes) in Uganda a Case Study of Nakawa Division

Abstract

The study establishes the effect of Credit financing on performance of Small and Medium Enterprises (SMEs) in Nakawa Division. The variables of the study were credit financing with dimensions of credit assessment, risk management and credit monitoring and business performance with dimensions of profitability, sales volume and market share. The study was guided by objectives: of assessing the effect of credit assessment on profitability of SMEs, examining the effect of risk management on market share of SMEs and to investigate the effect of credit monitoring on sales volume.

A stratified sampling methodology was employed to determine 127 respondents from different business types in Nakawa Division .

The study used a case study design and adopted both quantitative and qualitative approaches that used questionnaires and interview guide as the research approaches. It was carried out for four operational periods 2014, 2015, 2016 and 2017.

Business owners were then interviewed to examine the effect of credit financing on the performance of their businesses. The findings indicate that business owners have paid attention to credit assessment, monitoring and risk assessment and this has helped the performance of SMEs to improve

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