MJAMR

The Role Of Commercial Banks In Financing Small And Medium Enterprises (SMEs): A Case Of Wakiso District, Uganda

Nejesa Doreen, Babirye Shamirah


Abstract

This study examined the role of commercial banks in financing small and medium enterprises (SMEs) in Wakiso District, Uganda. Guided by three objectives-assessing SMEs' access to commercial bank financing, establishing SME growth/performance levels, and determining the relationship between the two-the study adopted a descriptive cross-sectional and correlational design. From a target population of 160 SME owners and managers, a sample of 113 respondents was selected using Krejcie and Morgan's (1970) table and stratified random sampling. Data were collected through a five-point Likert-scale questionnaire and analysed using SPSS, employing descriptive statistics, Pearson correlation, and simple linear regression. Results showed a moderate Overall Bank Financing Access Index (M = 2.85), with interest rate affordability rated lowest (M = 2.61), and a moderate-to-high Overall SME Growth/Performance Index (M = 3.42). A moderate, positive, and statistically significant correlation was found between bank financing and SME growth (r = 0.487, p < 0.01), and regression analysis confirmed that bank financing significantly predicts SME growth (β = 0.469, p < 0.01), explaining 23.7% of the variance (R² = 0.237). The study concludes that commercial bank financing meaningfully supports SME growth in Wakiso District but remains constrained by high interest rates and collateral requirements, and recommends the design of SME-specific loan products, streamlined loan appraisal processes, partial credit guarantee schemes, and targeted SME financial literacy training.

Keywords

Commercial Banks SME Financing Small and Medium Enterprises Wakiso District Credit Access SME
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Nejesa Doreen & Babirye Shamirah (2026). The Role Of Commercial Banks In Financing Small And Medium Enterprises (SMEs): A Case Of Wakiso District, Uganda. Metropolitan Journal of Academic Multidisciplinary Research, 5(7). https://journals.miu.ac.ug/pages/article.php?article_id=720

More in This Issue

View full issue →
16
The Impact of Corporate Governance on Financial Performance in Organisations: A Case of DFCU Bank Uganda
Gimbo Florence, Zikusooka Enock
Corporate governance; financial performance; board independence; risk management; internal
17
The Influence Of Budget Controls On Financial Stability In Organisations: A Case Study Of Nansana Municipality
Kabuuka Hassan, Zikusooka Enock
Budget controls; financial stability; commitment control; variance analysis; local revenue;
18
The Influence of Microfinance Loans on Women Empowerment in Rural Areas of Uganda: A Case of Kyabugimbi Sub-County, Bushenyi District
Asiimwe Prisca, Babirye Shamirah
Microfinance; women empowerment; rural finance; loan accessibility; complementary services;
19
The Influence of Technology Advancement on Modern Art: A Case Study of Kampala Metropolitan Region, Kampala City
Ayebare Thomas, Nkwasibwe Kenneth
technology advancement modern art digital creation tools social media
20
Total Quality Management and Operational Performance in the Utility Pole Treatment Industry: A Case of Uganda Electricity Distribution Company Limited
Bukenya Jovan, Zikusooka Enock
Total quality management; operational performance; utility pole treatment; process