Listing of small and medium enterprises on the Uganda Securities Exchange (USE)

Abstract

Listing on the stock market represents a significant milestone for any company, signifying a transformation from being privately owned to becoming a publicly traded entity. The major aim of this study was to find out why SMEs are not listed on the Uganda Securities Exchange. This was achieved using the following objectives; To identify the key barriers that hinder SMEs from listing their shares on the USE, To examine the perception of SME owners towards the benefits of listing on the USE, To explore strategies that encourage SMEs for public listing. The study used an exploratory research design and Trade-off theory to explore the intricacies of SME listing practices on the USE. Phenomenology qualitative research was used to collect data from 15 SMEs, with a 100% response rate. The study identified multifaceted barriers to listing, including financial constraints, concerns about ownership dilution, market sensitivity, compliance challenges, high costs, limited guidance, and perceived risks. SME owners generally held positive perceptions of listing, emphasizing growth opportunities, enhanced credibility, and increased market visibility. They recommended government support, such as tax incentives, reduced listing fees, streamlined regulations, simplified compliance, investor education campaigns, SME collaboration, and a supportive regulatory environment. Future research should focus on impact assessments, comparative analyses with neighboring countries, investor perspectives, policy evaluation, and exploring the long-term sustainability of listed SMEs.