Analysis on contribution of SACCO financial services towards the development of Small and Medium Enterprises: case study of Kinoni, Rwampara

Abstract

This study was conducted in Kinoni Town Council, Rwampara County. The objective of the study was to find out the effect of SACCO financial services on the performance of Small and Medium Enterprise. The research methodology for the study was descriptive cross-sectional research design. The sample size was 103 respondents and two cluster sampling techniques was applied in selecting the respondents who were included in the sample. The researcher used questionnaires to collect data and it was analysed using both Excel and SPSS version 25 at both univariate and bivariate levels. The study findings indicated that SMEs financing insignificantly influences its performance financially since the P-Value (0.178) was greater than the critical value (0.05). Access to SACCO financial services significantly influences small and medium Enterprises` financial performance since the P-Value (0.041) was less than the critical value (0.05). The study findings also indicated that presence of SACCO financial services in the area insignificantly influences SMEs development in terms of its monthly net turnover since (p-value =0.380) was greater than the critical value 0.05. The study findings also revealed that SMEs` performance were independent of training facilities provided by SACCOs since the p-value of 0.474 was greater than the critical value of 0.05. The study concluded that both males and females participate in business in Kinoni Town Council and most of them have undertaken higher education levels that is tertiary institutions and that access to SACCO financial services has a positive influence on the performance of SMEs. The study recommended that further studies should be undertaken on other factors influencing financial performance of Small and Medium Enterprises and should also be done in other areas of the district/country where such studies have not been conducted particularly on effectiveness of government programs, policies and laws governing SMEs in Uganda.