Factors influencing investment decisions in small and medium enterprises a case study of Kasubi trading area

Abstract

This study was conducted in Kasubi area, Lubaga Division. The main objective of this study was to find out factors that are influencing investment decisions in small and medium enterprises in Uganda using Kasubi as a case study. The study mainly considered find out the influence of gender, financial literacy and income level on investment decision making. This study employed descriptive study approach therefore used the cross-sectional research design and selected respondents using two stage cluster sampling technique to choose 96 respondents determined using cochran’s (1963). The findings indicated that 62.5% of the respondents were males while 37.5% of them were females. The findings from table 4.5 indicated that there is a relationship between gender of the business owner and investment decision making at 0.05 level of significance (p-value=0.002). Male investors are highly likely to invest in general merchandize business as compared to their female counterparts who are highly likely to invest in food hubs. The study findings also indicated that 47.9% of the respondents had completed primary school, 35.4% had completed secondary education, 11.5% had completed post secondary education while only 5.2% had not completed any level of education. The findings indicated that there is a significant relationship between education level of the trader and the type of business invested in at 0.05 level of significance (p-value=0.000). Traders with secondary school qualification are highly likely to invest in general merchandize as compared to other education categories. The findings indicated that 51.1% of the respondents were from families who heads were peasants, 20.8% were from families who heads were traders, 15.6% were from families whose heads were Professionals while 12.5% were from families whose heads were salary earners and there was a significant relationship between employment status of head of household at home and type of business invested in at 0.05 level of significance (p-value = 0.025). Children of traders and salary earners were highly likely to invest in general merchandize as compared to other categories. The study concluded that gender of the investor, employment status of head of household, income level, risk taking, source of information and financial literacy significantly affect the investment decisions. The study should be sensitized to undertake the financial literacy serious since it is very important in making investment decisions and Parents should consider giving their children skills which are needed and give them chances to actively participate in the business so as to get nurtured in business environment.