Equity Financing and Financial Performance of Small and Medium Enterprises (SMEs) In Mbale City, Uganda.
| dc.contributor.author | Ali Hassan | |
| dc.date.accessioned | 2026-05-11T13:56:24Z | |
| dc.date.available | 2026-05-11T13:56:24Z | |
| dc.date.issued | 2025-11-28 | |
| dc.description | This is a master's thesis. | |
| dc.description.abstract | The focus of the study was to examine the relationship between equity financing and the financial performance of SMEs in Mbale City, Uganda. The study objectives were to examine the relationships between retained earnings and financial performance, crowdfunding and financial performance, and self-funding and financial performance. A cross-sectional quantitative design was adopted in the study. A sample size of 175 out of the total population of 323 SMEs was selected, but only 142 SMEs responded. Cronbach's Alpha coefficient was used to establish the reliability and content validity index to compute validity. Data were analyzed using SPSS software with a focus on descriptive statistics, factor analysis, Pearson correlation, and regression analyses. The Pearson correlation coefficients showed a strongly positive and statistically significant relationship between retained earnings and financial performance; a negative and insignificant relationship between crowdfunding and financial performance; and a weak and slightly significant relationship between self-funding and financial performance. Further, the hierarchical regression analysis results indicated that only retained earnings immensely contribute to the variance in financial performance, but crowdfunding is not a significant predictor of financial performance, while self-funding slightly does so. Altogether, they accounted for 48.4% of the variance in financial performance. It was therefore concluded that equity financing slightly results in improvement in the financial performance of SMEs, with retained earnings being so influential. Recommendations were suggested including: need to encourage and sensitize SMEs about the benefits of using retained earnings to finance their operations; need by the government alongside other development partners to continuously develop specific mechanisms that facilitate SMEs growth like tax relief or exemption and other incentives; need by SMEs or owner managers to dedicate their efforts towards other activities and areas of opportunities rather than wasting time to mobilize funds from the crowds to finance the business; need by the SMEs to embrace self-funding since it is considered by the management as the best source capital; and finally, SMEs need to concentrate their efforts on equity financing as the best option to finance their operations as compared to other sources which attracts unnecessary costs and risks that hinder business growth. Areas for further study were suggested, including consideration of SMEs in other places within the region and the country at large, investigating other forms of equity financing against financial performance, and the use of a mixed approach to generate data. | |
| dc.description.sponsorship | Dr. Kinatatta Moses (Makerere University Business School) & Dr. Nakabuye Zulaika(Makerere University Business School) | |
| dc.identifier.citation | Ali, H. (2025). Equity Financing and Financial Performance of Small and Medium Enterprises (SMEs) In Mbale City, Uganda. Makerere University Business School. | |
| dc.identifier.uri | http://hdl.handle.net/20.500.12282/5503 | |
| dc.language.iso | en | |
| dc.publisher | Makerere University Business School | |
| dc.rights | Attribution-NonCommercial-NoDerivs 3.0 United States | en |
| dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/3.0/us/ | |
| dc.title | Equity Financing and Financial Performance of Small and Medium Enterprises (SMEs) In Mbale City, Uganda. | |
| dc.type | Thesis |