Assessing the Status of Growth of MSMEs in a Developing Country: Uganda as a Case Study
Science Journal of Business and Management
Volume 8, Issue 2, June 2020, Pages: 83-89
Received: Jan. 6, 2020;
Accepted: Feb. 24, 2020;
Published: May 19, 2020
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Sazir Nsubuga Mayanja, School of Post Graduate Studies, University of Kigali, Kigali, Rwanda
The study set out to assess the status of growth of MSMEs in developing countries with Uganda as the case study. A cross sectional descriptive design in which both qualitative and quantitative approaches were used to study a sample of 371 respondents who were systematically sampled from four districts of Wakiso, Mukono, Kampala and Jinja. A significant number of respondents, that is 23.2%, stated that their MSMEs have been growing. The standardized beta coefficients for the six predictor variables used in the study indicate that a firm’s capital base is the best predictor of the growth of MSMEs (0.574), followed by EPS (0.491) followed by market share (0.352), then dividends to shareholders (0.267), followed by sales (0.087) and lastly the number of employees (-.063). The growth of MSMEs has been basically retarded by the inability to borrow and mode of financing where results found ignorance of the matching principle. It is recommended that MSMEs need to adjust the mode of financing to follow the matching principle such that long-term objects are funded using funds from long-term sources while short-term projects should be financed using funds from short term sources. Conversely, funding short term liquidity needs using long-term sources of finance leads to a high degree of financing leverage in the long run, hence long run insolvency and decline of business.
Sazir Nsubuga Mayanja,
Assessing the Status of Growth of MSMEs in a Developing Country: Uganda as a Case Study, Science Journal of Business and Management. Special Issue: Business Policy& Strategic Management.
Vol. 8, No. 2,
2020, pp. 83-89.
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