Financial inclusion and growth of small and medium enterprises of Makindye Urban Division, Kampala Uganda
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Date
2023-06
Authors
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Publisher
Kampala International University, College of Economics and management
Abstract
The study examined financial inclusion and growth of small and medium enterprises in Makindye urban division, Kampala Uganda. The study was based on three objectives which included; financial accessibility and growth of small and medium enterprises, financial technology and growth of small and medium enterprises, financial literacy and growth of small and medium enterprises. The study was guided by three theories which include; the resource-based theory, neoclassic theory and finance growth theory. The study employed a correlation design, adopted a quantitative paradigm and a cross sectional survey was used and a sample size of 186 respondents was used from a target population of 360 SMEs operating in Makindye urban division. Data was collected using questionnaires and analysed using descriptive statistics (mean and standard deviation) and inferential with the aid of SPSS. The findings of the study from the correlation analysis reveal that Financial Accessibility had a positive and significant relationship with growth of small and medium enterprise in Makindye division at 0.001 level of significance (r=0.203, P-Value (0.007) <0.01) hence rejecting the null hypothesis. Also, Financial Technology had a positive significant relationship with growth of small and medium enterprise in Makindye division at 0.001 level of significance (r=0.208, P-Value (0.006) <0.01). and finally Financial Literacy had a positive significant relationship with growth of small-scale enterprise in Makindye division at 0.001 level of significance (r=.405, P-Value (0.008) <0.01). in conclusion, all the study finding from the above objectives indicate that there was a relationship between financial inclusion and growth of SMEs, hence rejecting the null hypothesis. The study recommended to Promote financial inclusion by encouraging SMEs to open bank accounts through targeted campaigns, financial literacy programs, and simplified account opening processes. Enhance access to business loans by developing tailored products with flexible options and reasonable interest rates, facilitated through collaborations between financial institutions and SME associations. Explore alternative financing options, such as microfinance institutions, venture capital firms, and crowdfunding platforms, to provide additional funding avenues and reduce reliance on collateral security. Strengthen information dissemination through partnerships with local government authorities, business associations, and technology platforms, ensuring SMEs have access to relevant and timely financial information, enhancing digital literacy and awareness through training programs and workshops, educating entrepreneurs on effectively using financial technology tools. Collaborate between financial institutions and mobile network operators to improve the accessibility and usability of mobile financial services, simplifying processes for opening mobile money accounts and ensuring reliable and secure mobile banking platforms, conducting education and awareness programs, with a focus on effective utilization of financial services and mobile banking, will enhance financial literacy.
Description
A research dissertation submitted to the college of economics and management in partial fulfillment of the requirements for the award of a master’s degree in business administration finance and accounting of Kampala International University.
Keywords
Financial inclusion, Growth, Small and Medium enterprises, Uganda