An empirical investigation into the choice of lenders by manufacturing businesses in Uganda.

Abstract

This research was induced by the challenge that business firms go through in their strategic choice of lenders in search of substantive money for investment and operations. The study was taken to investigate a group of selected manufacturing business and their choice of lenders A quantitative exploratory and descriptive survey design was adopted using a representative sample of 300 respondents out of 450 populations, drawn using Krejcie and Morgan (1970), a method of sample determination. Self-administered questionnaires were used to collect data from respondents. All the used questionnaires were collected representing 100%response rate. Frequencies, Chi-square and correlation tools were used in the analysis of the data. The findings indicated relationship between manufacturing businesses Uganda in terms of ownership, performance and assets and the choice of lenders. An indication that business owners / managers should pay attention in ensuring sound equity and tangible assets for maximum profit. It was however recommended that further research be made on: how other manufacturing firms choose their lenders, why small-scale businesses have failed to take off despite the available formal and the informal financial lenders, how great was the influence of social interaction between business owners and lenders in the choice of lenders, and why commercial credit finance really deal with small-scale enterprises and why they have failed to take route in developing countries like Uganda.