| dc.description.abstract | The objective of the study was to examine the factors associated with access to loans by small-scale businesses in Uganda. The assessment was made by entrepreneur’s level of education, Age of the business, business performance and loan application procedures. The study used primary data with a sample of 61 respondents who were small business owners in Nansana Municipal council. A cross-sectional survey design was used where data was collected from business owners using questionnaires. The analysis was done using frequency distribution, Chi-square statistics and binary logistic regression.In the results, majority business owners were males (63.9%), 45.9% business owners were below 30 years and majority were involved in retail shop type of business (45.9%). 65.6% of small businesses had ever obtained a loan from micro finance institution. The factors that were significantly associated with access to loans by small businesses were level of education of business owner and business performance in Nansana M/C (p<0.05). Age of the business and loan application procedures were not significant predictors of access to loans (p>0.05). In particular, access to loans was more likely to those business owners who had attended a higher level of education (Secondary level and above) (OR=0.938) and those whose businesses had positive business performance in terms of sales growth (OR=1.431). The model had a p-value of 0.048 which indicated that it was well specified and a good fit. In conclusion, the factors associated with access to loans by small-scale businesses were education level of the business owner and business performance while age of the business and loan application procedures did not show an association with access to loans.
In the light of findings, the study presents three recommendations for increasing access to loans by small-scale businesses. Firstly, there is need to localize the content like loan application forms as far as requirements for obtaining a loan are concerned. This will help to encourage those whose level of education is low to also take a step for external financing. Secondly, the government and other stakeholders should engage entrepreneurs in business management education through training in book keeping, customer care relations and marketing to ensure that business performance is improved. Lastly, Sensitization of the business owners about the benefits of applying for loans to finance their businesses needs to be done. This is possible with financial institutions coming up with free awareness services to give information about loans to entrepreneurs to reduce the fear in them of losing their businesses to lending institutions due to failure to repay | en_US |
