The impact of debt financing on the financial performance of small and medium manufacturing enterprises in Mukono District
| dc.contributor.author | Anthony Owade Odongo | |
| dc.date.accessioned | 2026-07-15T09:20:26Z | |
| dc.date.available | 2026-07-15T09:20:26Z | |
| dc.date.issued | 2026-06-10 | |
| dc.description | Undergraduate | |
| dc.description.abstract | The study looked at the effect of debt financing on financial performance of Small and Medium Manufacturing Enterprises (SMMEs) in Mukono District, Uganda. In particular, the impact of bank loans, microfinance credit and trade credit on the most important financial performance measures such as profitability, liquidity and operational efficiency was examined. Cross sectional descriptive research design was employed, which was a combination of both quantitative and qualitative methods. A sample of 158 SMMEs were identified with 57 of them actively involved in the study. Structured questionnaires and interviews were used to collect primary data and secondary data was collected from financial reports and literature search. The data were analyzed descriptively with SPSS and regression analysis. The results indicated that SMMEs in Mukono District have relatively high access to all types of credit with Trade credit the most accessible, Bank loans and the Microfinance credit. But, among all sources of financing, moderate cost burdens were linked with varying levels of restrictive conditions. The regression results showed that debt financing was significantly affecting financial performance (R² = 0.551). Of the financing sources, trade credit had the largest positive effect on financial performance (β = 0.362), bank loans (β = 0.298) and microfinance credit (β = 0.184). It is concluded that informal financing in terms of trade credit is the most dominant and important source of finance for manufacturing SMMEs while formal financing institutions have an important role in supporting SMME growth. It boosts liquidity, aids in working capital management and maintains day-to-day operations. The study suggests financial institutions to have more flexible lending practices, lessen the amount of collaterals and to create hybrid type financing, which combines flexibility in informal credit systems. | |
| dc.identifier.uri | https://hdl.handle.net/20.500.12311/3471 | |
| dc.language.iso | en | |
| dc.publisher | Uganda Christian University | |
| dc.title | The impact of debt financing on the financial performance of small and medium manufacturing enterprises in Mukono District | |
| dc.type | Dissertation |