Assessing the performance of SMEs in Kampala Central Division

Abstract

This research aimed at assessing the performance of SMEs in Uganda; The study was premised on three objectives; to examine the measures of SME performance, to examine the factors affecting SME performance, and to determine strategies for improving performance of SMEs. The study employed a quantitative research where data was collected from 169 respondents out of a sample of 200 employees using a survey questionnaire. The study revealed that that SMEs used several measures of performance such as achievement of organizational goals, profitability, returns on equity, returns on assets, market share, cashflows and cash conversion cycles. However, it was determined that SMEs are performing poorly on nearly all the measures mentioned above. The study examined the factors affecting SMEs performance around the Kampala Central Division area like insufficient collateral to secure loans, low levels of technical and managerial skills threat of competition from large corporations and so on. Finally, the study found that businesses could employ strategies such as partnerships, innovation, market orientation, supply chain management, reduced lead times, employee retraining and ecommerce adoption. The study therefore recommended that should adopt e-commerce, embrace innovation and undertake financial training and professional development.