Assessing the performance of small-scale and medium enterprises during Covid 19: a case study of small-scale and medium enterprises in Sheema Municipality

Abstract

SMEs contribute about 50% of GDP on average and in many economies, the majority of jobs are provided by SMEs. SMEs account for up to 90% of all businesses in the markets. SMEs are facing development and performance challenges related to ineffective business governance. Poor performance of SMEs would jeopardize the livelihoods of the many Ugandans they employ. Initiatives to improve the survival rate of SMEs so that they can offer greater opportunities for business competitiveness, locally and globally are needed. The study was carried out in Sheema municipality using primary data with a sampled size of 89 respondents. The study had the main objective of assessing the impact of covid19 on the performance of small-scale and medium enterprises in Sheema municipality. A questionnaire of closed-ended questions was used to collect data from the targeted population. The data collected was analyzed using graphs and frequency tables and data analysis was done using SPSS. It was found that reduced sales, liquidation and closure of some businesses, falling levels of public consumption, and loss of potential employees of the SMEs were the great effects of the covid19 pandemic. Difficulty in accessing the raw materials, increased costs of operation and maintenance, reduced number of customers, limited access to financing, and closure of the business were the challenges of the pandemic. Complete lifting of the lockdown, establishing an economic injury guarantee loan, adopting electronic marketing and electronic commerce, and extension of low-interest loans to SMEs were the measures suggested by the respondents to manage the effects of covid19 in the area. The study recommended that low-interest loans should be given to SMEs by development banks and micro finances to enable SMEs to recover from the pandemic. The government of Uganda should reduce the taxes collected from SMEs and even give them tax holidays to enable them to recover from the pandemic. Small business owners should be equipped with knowledge on how they can earn money using online shops and operate under all conditions without fear of spreading and contracting covid19.