Managerial competencies, funding and perceived performance of Small and Medium Enterprises (SMEs) in Uganda

Abstract

The purpose of study was to examine the impact of management competencies and funding on the performance of SMEs in Uganda, a case study of central and Nakawa Divisions of Kampala. A cross sectional survey design was used and data was gathered using a self-administered structured questionnaire. A sample size of 144 respondents were selected randomly from a population of 240 SMEs, covering virtually all forms (Sole Proprietorship, Partnership, Private, Services, family owned and manufacturing) The responses of the participants were analyzed using the statistical package for social sciences (SPSS), which generated analyses of variances, correlations and coefficients of responses. The results showed that management competencies and funding are positively related to the performance of SMEs. Management competencies were strong predictors of business performance in SMEs in Central and Nakawa divisions of Kampala. All the dimensions of management competencies; which are practical experience, knowledge and skills have significant relationship with performance of SMEs. When an SME has a good operational plan and well qualified managers, it is likely to see its sales growing and When SMEs employ qualified managers with practical experience, the funding requirements are most like to improve. While both variable are positively correlated to performance, funding is less significant compared to management competencies. Having known the importance of management competencies and funding to the SMEs performance, the study recommends entrepreneurs to engage in skill development as a critical first step towards business success.