Financial Inclusion and Financial Performance of Smes in Uganda: a Case Study of Namataba Town Council
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Date
2026-05-13
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Uganda Christian University
Abstract
The study investigated the impact of financial inclusion on the financial performance of Small and Medium Enterprises (SMEs) in Namataba Town Council of Uganda. Financial inclusion was defined in terms of access, affordability and usage. The study adopted a cross-sectional design and data was obtained from 138 SME owners/managers through structured questionnaires with a response rate of 90.8%. Descriptive findings revealed that mobile money service access was extremely high, with the majority of respondents stating that mobile money agents were conveniently accessible. But access to online loans and credit was low. In terms of use, mobile money was extensively used to receive customer payments and pay suppliers, but the use of formal savings accounts, credit and
financial documents to apply for loans was very limited. The most binding constraint is affordability, with most SMEs finding interest rates unaffordable and high interest rates holding them back from taking loans that could support their businesses.The research suggests affordability is the most binding constraint to financial inclusion for SMEs in Namataba. So setting up a credit guarantee scheme to reduce interest rates, mandating flexible repayment schedules, providing mandatory financial literacy and record-keeping training, and introducing a mobile money fee discount program for businesses is paramount.
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Undergraduate