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Financial inclusion and the growth of small medium enterprises in Uganda: empirical evidence from selected districts in Lango sub-region

Author

Listed:
  • Marus Eton

    (Kabale University)

  • Fabian Mwosi

    (Bishop Barham University College)

  • Constant Okello-Obura

    (Makerere University)

  • Abanis Turyehebwa

    (Kabale University)

  • Gilbert Uwonda

    (Gulu University)

Abstract

The growth and failure of small and medium enterprises has been a topic of discussions world over among policymakers and researchers. This study was guided by the following objectives: to examine the contributions of small medium enterprises (SMEs), to determine the challenges affecting small medium enterprises, to examine how financial inclusiveness supports the growth of small medium enterprises, and to establish the relationship between financial inclusion and growth of small medium enterprises. The study used a cross-sectional research design. Descriptive design was used and supplemented by inferential statistics. Correlation and regression analysis were adopted. The study revealed that financial inclusion is significant in supporting SME growth. The study further also revealed that the cost of acquiring and servicing financial services is high; there is also difficulty in using some of the financial services, and the way financial providers treat financial users, some lacked some degree of respect and dignity. The study recommends that financial providers should continue sensitizing the public on the available financial services beyond credit services, which are common and known. Digital financial service providers should encourage their clientele to use digitalized financial services which are cheap, secure, and risk averse. The cost of capital should also be reduced to encourage borrowing while SMEs should innovatively produce goods that can be competitive at both domestic and international markets.

Suggested Citation

  • Marus Eton & Fabian Mwosi & Constant Okello-Obura & Abanis Turyehebwa & Gilbert Uwonda, 2021. "Financial inclusion and the growth of small medium enterprises in Uganda: empirical evidence from selected districts in Lango sub-region," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-23, December.
    • Handle: RePEc:spr:joiaen:v:10:y:2021:i:1:d:10.1186_s13731-021-00168-2
    DOI: 10.1186/s13731-021-00168-2
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    References listed on IDEAS

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    Cited by:

    1. Ma Ji Qiang, 2021. "The Cohesion of Small and Medium-sized Foreign Trade Enterprises and their Growth in China," International Journal of Science and Business, IJSAB International, vol. 5(11), pages 12-18.
    2. Shanika Thathsarani & Wei Jianguo & Mona Alariqi, 2023. "How Do Demand, Supply, and Institutional Factors Influence SME Financial Inclusion: A Developing Country Perspective," SAGE Open, , vol. 13(3), pages 21582440231, July.
    3. Juan M. Dempere & Alexandrina M. Pauceanu, 2022. "The impact of economic-related freedoms on the national entrepreneurial activity," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-20, December.
    4. Ebrahim Endris & Andualem Kassegn, 2023. "Profitability of Agricultural Micro and Small-Scale Enterprise in North Wollo Zone, Amhara Regional State, Ethiopia," SAGE Open, , vol. 13(2), pages 21582440231, May.
    5. Damane, Moeti & Ho, Sin-Yu, 2024. "The impact of financial inclusion on financial stability: review of theories and international evidence," MPRA Paper 120369, University Library of Munich, Germany.

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