Assessment of the Impact of Small and Medium Enterprises (SMES) on Employment Creation in Uganda: A Case Study of Lira Municipality, Lira District

Abstract

This report presents findings from the study about the assessment of the impact of small and medium seized enterprises in Lira Municipality Lira District. The main objective was to assess the impacts of small and medium enterprises on employment creation in Uganda with specific reference to Lira municipality, Lira district. Focus was put on differences in highest level of education attained, access to formation about SMEs, the nature of SMEs, gender of the respondents, and challenges facing SMEs. The study used a quantitative approach with a correlations descriptive design. Data analysis was done at three levels; at univariate level where frequency distribution tables and percentages were used and bivariate level where cross tabulations were used to generate the chi-square test that was used to explain the relationship between independent variables which included highest level of education attained, access to formation about SMEs, the different nature of SMEs, the challenges facing SMEs and the dependent variable which is employment creation. From the findings, access to information about SMEs has led to high level of employment creation due to the fact that it increases awareness of various job opportunities in SMEs. In addition, the findings spelt out that inadequate startup capital is the most challenging factor affecting SMEs. The study recommends that possible measures and strategies be undertaken by the Government and the responsible stakeholders like Non – Government Organizations and donors to increase on the level of employment creation through; improving on SMEs operation and setting up more SMEs. This can be done by ensuring easy access to financial credit to solve the problem of inadequate start-up capital and also subsidizing the people operating SMEs. This will reduce the high youth unemployment rates in Lira Municipality (Central Division and Railway Division). Other recommendations included among others, encouraging students to go to technical schools in order to increase the number of job makers and reduce on the number of job seekers.