Credit accessibility and financial performance of SMEs in Eastern division of Busia municipality
| dc.contributor.author | Morine Nekesa | |
| dc.date.accessioned | 2026-06-17T09:16:35Z | |
| dc.date.available | 2026-06-17T09:16:35Z | |
| dc.date.issued | 2026-05-05 | |
| dc.description | Undergraduate | |
| dc.description.abstract | The primary aim of the study was to determine the effect of access to credit on the financial performance of the small and medium enterprises operating in the Eastern Division of Busia. These factors included access to credit, conditions for credit and the interest rate involved. These variables are correlated with financial performance measures such as profitability, return on investment and assets, sales, and job creation capabilities. This research adopted the cross-sectional survey approach where surveys were done using questionnaires and interview guides. Questionnaires were used to collect information from 62 business owners/managers (of the targeted 70 businesses), whereas interviews were held with 12 loan officers from banks, micro finance companies and SACCOs. The results from correlation showed positive relationships between performance and availability of credit (r=0.445), credit terms (r=0.512 – highest correlation) and interest rate (r=0.468). Regression analysis shows that the three credit factors explained 37.5% of variation in performance, with credit terms being the most significant variable (β=0.348). In conclusion, credit availability does influence the performance of the SMEs in the border region; however, it is important to focus more on credit terms than mere presence of banks. This could be achieved by banks using different types of currency for lending, accepting movable securities like equities and machinery, allowing for longer grace period and being clear on the cost of credit. It is important for the government to start a credit guarantee scheme and help Kenya facilitate cross-border credit facilities. For the SMEs, it would be advisable to keep proper accounting records, legalize their businesses and learn about credit terms before borrowing. | |
| dc.identifier.uri | https://hdl.handle.net/20.500.12311/3357 | |
| dc.language.iso | en | |
| dc.publisher | Uganda Christian University | |
| dc.title | Credit accessibility and financial performance of SMEs in Eastern division of Busia municipality |