Assessing whether micro and small scale businesses can sustainably support livelihoods : a case study of Kikoni, Makerere

Abstract

Support for micro-enterprises should be emphasized, since they play an important role in providing incomes and livelihoods but it remains regrettable that despite the role played by the SMEs sector, more than 70% of these ventures still fail within three years after being established. Therefore, the main objective of this study was to assess whether micro and small scale can support livelihoods. A well designed questionnaire was administered to willing respondents from Kikoni, Makerere and the data obtained analyzed using Stata v.15 software. Analysis was done at univariate, bivariate and multivariate levels. A t-test and a binary linear regression model were used to test hypotheses I and II respectively. Of the 189 respondents, the majority (52.91%) of the respondents were males, 25.40% were engaged in the food business, general merchandise (24.87%), textile and clothing businesses (16.40%), alcohol serving business (13.23%), health services (5.82%) and others (14.29%). Only 26.98% of them possessed special skills related to their business. Average expenses per individual were significantly less than 211,000 Ugx with a p value (0.003). The value of stock with a p value of 0.007 and an odds ratio of 9.6211 as well as the possession of skills with a p value of 0.012 and an odds ratio of 4.5518 were significant factors for SME survival. To improve SME survival, specialized skills should be emphasized as well as facilitating organized groups of Micro and Small-scale business owners to boost their cash flow. Alternative jobs which are more rewarding could be offered so as to absorb the surplus labor in disguised unemployment in this sector.