Assessment of the factors affecting the performance of small & medium enterprises (SMES) in Uganda. A case study of MTN mobile money agents in Kampala central business district (CBD)

Abstract

The study looked at the performance of small and medium-sized enterprises (SMEs) in Uganda with a case of Kampala Central Business District (CBD). This dissertation therefore presents an assessment of the performance of small and medium-sized enterprises in Kampala Central Business District specifically focusing on the performance of MTN mobile money agents. It particularly focuses on the performance of SMEs, financial literacy of SMEs as well as the managerial skills of SMEs. The study was based on a survey questionnaire for the performance of SMEs and interviews which were conducted with some of the mobile money agents within the Kampala CBD. The survey results were analyzed based on 183 questionnaires out of a target sample of 226 mobile money agents within Kampala CBD. In addition, 7 key respondents provided in-depth data out of qualitative interviews. Data analysis was done with the help of SPSS 16 and also MS Excel to analyze for mean, standard deviation, frequencies and percentages for quantitative data. In addition, qualitative data were analyzed based on opinions from different respondents. The results indicated that 70.4% of the MTN mobile money agents have capital base/float for the customers. However, there are challenges with the agents when it comes to keeping records where 53.0% indicated that, they do not record every transaction o their businesses in the books of accounts. The study established that there are many challenges with SMEs which include luck of financing for credit to the mobile money businesses and the mobile money agents do not relate well with their customers (52.4%) and 76% of the respondents do not have the ability to make proper decisions. In conclusion, the study established that, there is need for the government to financially support SMEs so that they are able to get loans at cheaper rates to improve on the working capital. In addition, there is need for MTN to have continuous capacity building to its agents since most of them were found to have limitation in managerial skills and financial literacy