The effect of working capital management small scale enterprises in Uganda: a case study of Uganda Investment Authority

Abstract

The study investigated the effect of working capital management on performance of small scale enterprises in Uganda. It was undertaken by revietving theoretical and empirical literature on working capital management (WCM) and performance of small enterprises. The study employed annual secondary data on Ugandan small scale enterprises (SSEs) covering the period 2002-2006. Empirical findings indicated that many SSEs do not have in place proper (WCM) policies and as such their performance remains 1ovv. The study also showed that apart from WCM, taxation and interest rates affect the performance of SSEs in Uganda, i.e there is a negative correlation and interest rates on one hand and performance of SSEs on the other hand, accordingly, in the case of Uganda, there is a need to improve the performance of SSEs. For SSEs to achieve this there is need to implement proper WCM policies. Moreover, lending institutions need to introduce schemes that would enable SSEs to acquire funding at lower interest rates and lastly the present income tax system in Uganda should be made more responsible to small scale enterprises