Analysis of debt financing of small and medium enterprises in Arua City

Abstract

This study investigates the challenges faced by Small and Medium-sized Enterprises (SMEs) in accessing debt financing in Arua City, Uganda. Despite their significant contribution to the economy, SMEs in Arua City struggle to access debt financing, which hinders their growth and development. This study aims to identify the current types of debt financing available to SMEs, examine the factors hindering accessibility, and provide recommendations and solutions to improve access. A cross-sectional survey design with a quantitative approach will be used, targeting registered SMEs in Arua City, with a sample size determined by the Yamane formula and simple random sampling. Primary data will be collected using a structured survey questionnaire, gathering information from SME owners, managers, or financial decision-makers. The study's significance lies in providing insights into the challenges faced by SMEs in accessing debt financing and offering practical recommendations to support their growth and development, thereby contributing to the existing literature on SME financing globally, in Africa, East Africa, Uganda, and Arua City.

Subject Keywords: Debt financing; Small and medium enterprises; SMEs; Arua City