Impact of covid-19 on the performance of SMES in Uganda. A case study of Kawempe division.

Abstract

This study investigated the impact of Covid-19 on the performance of SMEs in Uganda, using selected hardwares in Kawempe as the Case study. The study also established the effect of Covid-19 sales performance of SMEs, the effect Covid-19 on profitability of SMEs, and the coping strategies used by SMEs during Covid-19. The study used a questionnaire to collect data from the 88 owners, managers or employees of the selected from the different hardwares in Kawempe town. Data was analyzed at the univariate and bivariate levels of analysis using SPSS software package. The results show that more than 90% of respondents experienced changes in earning since the outbreak of Covid-19. The changes in sales and costs existed but they were statistically significantly different before and after Covid-19 since their p-value were less than the 0.05 level of significance. The study suggested that businesses need to adopt different innovative strategies such as online training so as to overcome challenges that come with pandemics or uncertainties. The SMEs can also adopt cost minimization strategies to reduce on the expenditure during times of pandemics, and such strategies may include reducing on number of employees or reducing salary. Commercial banks should consider proactively providing emergency loans to MSMEs with flexibility in repayments. The government could recapitalize commercial banks and micro-financial institutions by extending cash loans or by loosening the liquidity reserve requirements to provide financial institutions with the extra liquidity required to provide flexible emergency loans.