The uptake of the of the small business recovery fund in Mukono District

Abstract

This study aimed to investigate the uptake of the Small Business Recovery Fund (SBRF) in Mukono District. The study had three main objectives: first, to identify the factors that contributed to the uptake of the SBRF; second, to identify the challenges faced by small businesses regarding the SBRF; and third, to recommend strategies to increase the uptake of the fund. The study adopted a quantitative research design and employed a cross-sectional approach. This design allowed for the systematic investigation of phenomena through gathering quantifiable data and conducting statistical and mathematical analyses. The unit of analysis comprised 317 small and medium enterprise (SME) owners in Mukono District. Out of the 317 questionnaires distributed, 200 were completed and returned, resulting in a response rate of 63.1%. The respondents were selected using a combination of convenience and simple random sampling techniques to ensure representativeness and accessibility. Data was collected using structured questionnaires designed to capture relevant information required to address the study objectives effectively. This study identified key factors that influenced the uptake of the Small Business Recovery Fund (SBRF) in Mukono District. Findings showed that a manageable loan application process and affordable interest rates significantly improved fund accessibility. High awareness of eligibility criteria and the removal of collateral requirements further motivated participation among small businesses. However, several obstacles persisted, including complicated application procedures, ongoing collateral demands, insufficient financial literacy, economic instability, and geographic limitations that restricted access and lowered fund utilization. Additional challenges included delays in loan processing and mistrust of financial institutions, both of which negatively affected borrower confidence. To address these challenges, respondents suggested various strategies to increase uptake: streamlining application processes, reducing interest rates, and enhancing financial literacy training were commonly recommended. Introducing government-backed loan guarantees and expanding the network of participating financial institutions were also considered vital for improving access. Furthermore, raising awareness through campaigns, offering flexible repayment options, and digitalizing application procedures were emphasized to promote transparency and convenience. The study concluded that implementing a multifaceted approach that combines procedural simplification, financial support, and capacity building is essential for boosting uptake and ensuring the sustainability of small businesses benefiting from the SBRF.