Access To Informal Finance, Financial Capability, And the Performance of Micro and Small-Scale Enterprises (MSSEs) In Kampala.
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Date
2025-08-28
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Makerere University Business School
Abstract
This study investigates the relationship between access to informal finance, financial capability, and the performance of Micro and Small-Scale Enterprises (MSSEs) in Kampala, Uganda. The specific objectives were to examine the relationship between access to informal finance and MSSE performance, assess the impact of financial capability on performance, and evaluate the influence of both factors. A cross-sectional research design was employed, incorporating both quantitative and qualitative data collection methods. Data was gathered using structured questionnaires and interviews from a sample of 380 MSSEs in Kampala. The findings revealed a significant positive relationship between access to informal finance and MSSE performance, with informal finance playing a crucial role in improving sales returns, market share, and customer base growth. Similarly, financial capability, particularly in income management, financial acumen, and strategic financial planning, had a strong impact on performance. The influence of access to informal finance and financial capability was also highly significant in enhancing the overall success and sustainability of MSSEs. The study recommends that policymakers focus on improving financial literacy among MSSE owners and expanding access to affordable informal finance options. Additionally, MSSEs should be encouraged to develop long-term financial strategies and make informed financial decisions to improve business sustainability. Further research should explore the role of digital financial services and gender disparities in accessing finance within the MSSE sector.
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This is a master's thesis
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Citation
Achura, G. A. (2025). Access To Informal Finance, Financial Capability, And the Performance of Micro and Small-Scale Enterprises (MSSEs) In Kampala. Makerere University Business School.